Etoro Review 2022

In this eToro review we will get to know all the features of a broker that has been operating in many countries around the world since 2007, including Germany of course.

You will have already read how safe and reliable eToro is for online investing, thanks to its certification by the Cypriot regulator (CySEC).

Etoro Rating: Summary

Advantages

  • eToro has revolutionised the world of brokers with social trading, which allows you to copy the decisions of experienced traders (CopyTrader): This means that anyone can invest at a high level, regardless of their time or skill.
  • CopyPortfolios (formerly called Copy Funds), on the other hand, allow you to replicate the trades of entire investment funds rather than those of a single trader.
  • The eToro platform is easy to use. Opening an account is also very easy.

Disadvantages

  • The support service is not the best.
  • The withdrawal fee of $5.
  • The support service is not the best.

eToro rating: Reliability and security

Rating: 5/5★★★★★ – Reliable to the last: The certifications are more than deserved.

eToro is regulated by CySEC and therefore operates in Germany in a completely legal and controlled manner.

This is certainly a good start, but is it enough?

Certification by a European regulatory authority (Amf, FCA, Consob, CySEC) is mandatory in order to operate absolutely legally in Europe. This makes it possible to distinguish brokers that are subject to constant control from those that operate illegally and should therefore be sorted out without hesitation.

Contrary to popular belief, certifications are important, but they are not sufficient to determine the quality of a broker.

The only way to understand whether a company is trustworthy or not is to use the services they offer: Our job is to test online brokers, and we have indeed tested practically all of them.

During the several hours we traded with real money at eToro, we never had any problems and we therefore rate the broker as safe and trustworthy.

etoro rating: deposit and withdrawal

Rating: 5/5 ★★★★★ – Deposits and withdrawals are instant and you have many options to choose from. However, there is a fee for withdrawals and a fee for the euro-dollar exchange.

Etoro has many options to choose from. However, there is a fee for withdrawals and a euro-dollar exchange fee.

Depositing and withdrawing funds from your account is very easy.

Deposits

Deposit methods are varied and you are sure to find the one that is most convenient for you; the most commonly used include:

  • Credit/Debit card (Visa, Mastercard, Maestro).
  • PayPal
  • Rapid
  • Bank transfer
  • Sofort
  • Skrill and Neteller

Whichever payment option you choose, remember that the card you use must be in your name, as the account holder must also be the owner of the funds.

The minimum deposit at eToro is $50, but we will discuss this in more detail later.

There is no deposit fee, however eToro only uses US dollars and will automatically convert your Euros to USD once you make the deposit (this is done by the broker), with a small fee (tenths rate) for the currency exchange.

We have tested all the deposit methods listed above and they have always been successful.

Withdrawals

There is a minimum amount of €30 that can be withdrawn at any time.

Please note that eToro prefers to credit the funds to the same card you used to deposit, but if this is not possible you will be asked to provide an alternative payment method.

Once you have decided to withdraw your deposits, eToro takes one business day to perform all the necessary security checks. Then your bank or PayPal – or others, depending on the withdrawal method – must complete the process.
On average, we received our money within 3-5 business days (PayPal and Skrill are faster, while banks generally take longer, up to a maximum of 8 days).

Finally, eToro charges a $5 withdrawal fee: this is reasonable, but we are not thrilled with it.

etoro Rating: Commissions

Rating: 4.5/5 ★★★★☆ – The trading commissions are low overall, considering the general quality of the broker.

In the world of online brokers, there are three types of commissions:

  • Trading commissions: These can be either genuine direct buy and sell commissions (paid when a position is opened and closed) or spreads. The spread is the broker’s profit when he buys an asset at a certain price and sells it again at a premium of a few cents. You can think of the broker as a trader who buys at wholesale and then resells the asset at a slightly higher price, in exchange for the service provided
  • Overnight funding: this cost is incurred when you hold a leveraged position (via CFDs; leverage is a multiplier of investment performance) in your portfolio for more than one day. The latter means that you borrow money from the broker at a certain interest rate for the trade
  • Standard fees: such as withdrawal fees or inactivity fees.

eToro’s costs are not the lowest, but this is not surprising: a trader chooses eToro not because of the commissions, but because of the quality and the opportunities that social trading offers, i.e. to become part of a community of active and intelligent investors.

However, it must be said that eToro’s overall costs have dropped significantly as the commission on withdrawals has dropped from $25 to just $5!

Let’s now take a closer look at these types of commissions.

Trading commissions

eToro has low trading costs: it does not charge commissions and the profit comes solely from the spread.

The spread is variable and on the official website you will find all the minimum spreads; for your convenience we list the spreads of some of the main assets.

The spread at eToro is 0.09% for stocks and ETFs: so if you invest $1,000 in stocks, the broker earns 9 cents spread.

To build investor loyalty, eToro has stated in full transparency that it will apply a fixed spread (cost) of 1% on all cryptoassets traded (the spread is triggered both when the position is opened and closed), which compares favourably with market competitors.

As for forex trading, the spread varies from currency to currency, for example:

  • EUR/USD: 0.9 pips
  • GBP/USD: 2 pips
  • USD/CAD: 1.3 pips

Even for commodities, the spread varies from case to case, for example:

  • Oil: 5 pips
  • Silver: 5 pips
  • Gold: 45 pips

Overnight financing

The broker charges overnight funding if you hold a leveraged position for more than one day. The interest rate charged by eToro is average and is always displayed at the bottom of the page when you open a trade.

If you invest $500 in Apple with a leverage of X2, the overnight fee is 24 cents on weekdays and 76 cents on weekends.

Standard commissions

eToro’s standard commissions are not high. The most annoying is the aforementioned $5 withdrawal fee.

There is also an inactivity fee, which we don’t think is problematic: If you don’t log into your account for a year and still have funds, you are charged $10 per month. Just log back in to stop the payment or, even better, don’t forget your money on eToro for a whole year.

eToro review: Platform – Webtrader and Openbook

Rating: 5/5 ★★★★★- The platform is easy and pleasant to use.

We continue our review of eToro by looking at the trading platform.

Originally, in 2007, this platform was called eToro WebTrader and revolutionised the FinTech world by making online trading accessible to everyone.

Later, eToro recognised the power of social trading and created a facility called eToro OpenBook, which allowed clients to connect with other investors.

In 2015, the company merged eToro WebTrader and eToro OpenBook into one platform, allowing people to take advantage of the whole package directly from the website without having to download anything.

In 2017, with the cryptocurrency boom, the trading platform had a few problems as the demand and number of users were really too high: The broker overcame the problems brilliantly. Nowadays, the platform works flawlessly.

To date, we consider eToro’s platform to be the most advanced available.

Ease of use

Ease of use is one of eToro’s strengths. In fact, the company has done a great job combining attractive graphics with a considerable amount of available features. For example: take profit and stop loss are very easy to set (we will see how later); opening or closing a position is a matter of seconds.

You can master the platform within a day.

Login and security

The eToro login has an optional two-step identification system that ensures security without sacrificing convenience and ease of access.

Search function

The search function also works well: type in the name of a company or a product and you will find exactly what you are looking for.

eToro Rating: Mobile App

Rating: 4.5/5 ★★★★☆ – Simple and intuitive app.

The eToro mobile app is available for both iPhone and Android. It is very well made and has the same functionality as the website.

It is also very well rated by thousands of people who have tried it, as you can see in the respective stores.

eToro Rating: Markets and Products

Rating: 5/5 ★★★★★ – Many assets and CFDs to trade with. One of the few brokers that offers the ability to buy and own stocks, ETFs and cryptocurrencies. The only one that seriously implements social trading via copy traders and copy portfolios.

CFD and underlying assets

At eToro you can invest via contracts for difference (CFDs), which allow you to trade the stock market in two ways:

Bet on rising prices: you make profits when the price of the asset you have invested in rises.
Bet on falling prices: This is the exact opposite, i.e. you make a profit when the price of the asset in question falls.
When you trade CFDs on an asset (e.g. Amazon shares), you don’t buy it directly (you don’t own AMZN shares), but you bet on the price going up or down.

This is very convenient because you can make money on both rising and falling prices.

However, in case you don’t want to use CFDs, eToro is one of the few online brokers that also offers the option to buy the actual (underlying) asset: In other words, you can buy stocks, ETFs and cryptocurrencies without using leverage (an operating performance multiplier). Simply set the level to X1. Conversely, set the CFD with levers X2 and X5, and the result of the investment is multiplied by the corresponding multiples (exactly 2 and 5).

Just like in a social network, you can look at the profiles of these investors, but you will find more than just pictures: You can examine each trader’s performance on an annual or monthly basis and find out about their recent trades.

In addition, eToro categorises traders according to their risk profile: a trader with aggressive positions has a higher risk.

In short, there are various statistics that help you choose which trades to track.

For this eToro feature, the minimum investment is $200 while the maximum is $500,000. You can also copy up to 100 traders at a time.

CopyTrader works great and enables everyone to trade regardless of their stock market knowledge.

Therefore, our opinions about CopyTrader are extremely positive: it is a fantastic tool that makes the financial life of inexperienced investors much easier.

Moreover, if you become a good and profitable trader over time, you can be a trader who is copied by others, i.e. a popular investor, with all the benefits that entails: One wonders what traders get out of sharing their trades with the public.

The answer is simple: eToro compensates popular investors. This means that your profit would double if you are or become an experienced trader.

Copyportfolios

While CopyTrader allows you to copy individual investors, CopyPortfolios (or Smart Portfolios) allow you to replicate investment funds, for example:

  • ‘themed’ funds. There are portfolios that contain the biggest technology companies such as Google, Apple, Amazon and Facebook, and those dedicated to the energy or tourism sectors. A practical example is the CryptoPortfolio, which consists of the most important cryptocurrencies.
  • Funds formed by the best traders on eToro, with performance varying according to the traders’ own performance.

You can find the returns of eToro portfolios directly on the platform; what you need is listed in the “Statistics” section on the reference page of each portfolio.

It may sound complicated, but once you’re in, you’ll understand everything in a matter of minutes.

eToro Rating: Analysis Tools

Rating: 4/5 ★★★★☆ – Sufficient technical analysis tools. Good fundamental analysis tools and recommendations.

The technical and fundamental analysis tools, analyst recommendations and news section are very good for defining successful trading strategies.

For some stocks you will find analyst recommendations (buy/sell/hold), hedge fund forecasts and the average price target. Unfortunately, these are only available for the most popular and important stocks.

The same applies to the fundamental analysis data: in addition to a general financial report, eToro reports variables such as price-earnings ratio, dividend-price ratio and earnings per share.

The charts are nicely designed and help you with technical analysis with a variety of available indicators.

The news section is manageable, but not bad.

eToro Rating: Customer Support

Rating: 3.5/5 ★★★☆☆ – Recently introduced telephone customer service. The email support works well.

The review could not be complete without a careful examination of the customer support, which unfortunately is not very good.

  • eToro’s contact details include a telephone reference.
  • However, you can also communicate with the broker via the ticket system (i.e. email) or live chat.

When we tried to contact them, we received a response within a few minutes to three hours.

The answers are usually comprehensive and relevant, and the entire support service is entirely in German.

In this respect, we think this is one of the aspects eToro should focus on more.

Fortunately, the broker shows good intuition considering the improvements of the last few years.

eToro Rating: Teaching Matrial

Rating: 3.5/5 ★★★☆☆ – Instructional videos for beginners about financial markets of average quality.

There are videos on the platform (eToro Trading Academy) that explain the basics of investing and financial markets. There are also web conferences (online webinars) you can attend and articles and guides to read.

To learn how to use the platform, you can use a demo account, which is a free account with all the features of the real account, through which you can learn how to use the trading platform in every way.

eToro rating: minimum deposit and demo account

Rating: 5/5 ★★★★★ – Free and unlimited demo account. Minimum deposit of $50.

Demo account

eToro’s demo account is free of charge and allows you to trade with virtual money (you get $100,000 virtual) so you can gain experience with the platform and trading strategies without risking your capital.

Opening a demo account with eToro is free and allows you to enjoy a real simulation of what you can do with your real account.

Minimum deposit

To actually trade the stock market, you need to switch to the real account by making a minimum deposit of $50: note that this is not a payment to eToro, but a deposit into your account that will be used exclusively for trading.

Note that you will need to verify your account and upload photos of your documents to the platform. All this is mandatory as eToro has to undergo various checks and comply with anti-money laundering and terrorist financing laws.

In any case, you can deal with depositing later, because the first step is undoubtedly to open a demo account, which is free, secure and immediately usable.

Is eToro a scam?

Let’s move on to the last paragraph of the review and ask ourselves the most important question for anyone who wants to start trading online on this platform:

Does eToro not pay? Is it a scam?

You can be sure: eToro is not a scam and will not simply make your money disappear.

“How to spot a scam right away: online trading scams “

The company was one of the first online brokers ever: it was founded in 2007 and today offers its services to 20 million users worldwide every day.

It makes no sense to be suspicious of eToro, as the company’s profits and expansion over the past 15 years are due to the seriousness with which it operates and the uniqueness of its offering.

So the real question to answer is: Is eToro the right broker for us?

In our opinion, eToro is the perfect broker for those who want to take advantage of social trading:

  • It is definitely a good choice for inexperienced traders who are willing to invest like the experts.
  • It is highly recommended for those who decide to trade the stock market with their own money but have little time or energy to learn how it works and therefore delegate the strategies to a professional
  • It is very beneficial for experienced traders as they receive compensation if they are copied by a sufficient number of investors.
  • There is no doubt that eToro is a top broker and accordingly they pay for quality.

If you prefer good service to modest savings, you will do very well with eToro.

Warning

eToro is a multi-asset platform that offers investing in stocks and cryptoassets as well as trading in CFDs.

  • Please note that CFDs are complex instruments and carry a high risk of losing money quickly due to the leverage effect.
  • Leverage. 68% of retail investor accounts lose money trading CFDs with this provider. You should weigh up whether you understand how CFDs work and whether you can afford the high risk of losing your money.

Past performance is not indicative of future results. The trading history shown is less than 5 complete years and may not be sufficient to base an investment decision on.

Copy Trading is a portfolio management service offered by eToro (Europe) Ltd, which is authorised by the Cyprus Securities and Exchange Commission and regulated by the Cyprus Securities and Exchange Commission.

Crypto investments are offered by eToro (Europe) Ltd. and are not suitable for all investors. Your capital is exposed to risk. For clients from Germany, custody of crypto assets is offered by eToro Germany GmbH.

eToro USA LLC does not offer CFDs and makes no representations and assumes no liability for the accuracy or completeness of the content of this publication, which was prepared by our partner using publicly available, non-company specific information.