Guide to using eToro
What is eToro
eToro is a multi-asset social trading and brokerage platform that allows users to trade a wide range of financial instruments including stocks, currencies, commodities and cryptocurrencies.
It also has a feature that allows users to copy products from other reputable vendors on the platform. The platform is available in over 140 countries and is regulated by many financial regulators, including the FCA in the UK.
The history of eToro
eToro was elected in 2007 by brothers Yoni and Ronen Assia and David Ring in Tel Aviv, Israel. The company initially focused on a forex trading platform and contracts for difference (CFDs), but has since expanded to include many other types of financial instruments.
In 2010, eToro launched OpenBook social trading, allowing you to use the closings and strategies of other traders on the platform and automatically copy their closings. This feature has fueled eToro’s rapid growth and has led to what the company has dubbed the “social trading network” or “social investment network”.
In 2011, eToro released a mobile trading app, one of the first companies to preinstall a mobile trading console. In the following years, eToro continued to expand its operations by adding new tools, features and functionality.
In 2018, eToro acquired crypto wallet provider Firmo to acquire crypto-related services, and added stock trading in 2020.
Can eToro be trusted
The eToro platform is secured with SSL encryption and two-factor authentication to protect users’ personal and financial information. In addition, eToro is a member of the Investor Compensation Fund, which provides an extra layer of protection for client funds in the event of a company default.
However, as with any financial investment, there is always the risk of losing money. It is important to note that past performance is not an indicator of future performance, and financial markets are inherently risky. Before investing money, it is important to research it carefully and understand the risks associated with it.
It should also be noted that social trading, although profitable, also comes with certain risks. Since you are copying other traders, you are also accepting their risk and you should always do your own research and due diligence before following other people’s trades.
Does eToro charge a fee
Yes, eToro charges for its services. Commissions vary depending on the type of financial instrument traded, the size of the trade and the frequency of transactions.
For stock trading, eToro charges a spread of 0.5% on the buy and sell price of the stock. For cryptocurrency trading, eToro charges a difference of 1% on the price of buying and selling cryptocurrencies. For Forex and Commodity trading, eToro charges a fixed spread on the bid and ask prices of the instrument.
In addition to the spread, eToro also charges an overnight fee for positions held overnight, also known as an overnight funding fee. This commission varies depending on the instrument and direction of trading (long or short) and is charged daily.
In addition, eToro charges withdrawal fees. This fee varies depending on the withdrawal method. For example, a credit card withdrawal fee is 3.5% of the withdrawal amount, and a wire transfer withdrawal fee is $25.
It’s important to note that these fees may change over time and it’s always recommended to check the fees on eToro’s website or in their terms and conditions before placing any trade.
Can I exchange currency using eToro
Yes, eToro allows users to trade currency pairs (also known as forex) on its platform. The platform offers a wide range of currency pairs to trade, including major, minor and exotic currency pairs, such as EUR/USD, GBP/USD, USD/JPY, and others.
Users can trade currency pairs by opening a “Buy” or “Sell” position on the chosen currency pair, just like with other financial instruments available on the platform. The buy and sell prices are determined by the market and are subject to a spread, which is the difference between the buy and sell price, and a overnight fee, which is applied for positions held overnight.
eToro also allows users to copy the trades of other successful traders on the platform who are trading currency pairs. This feature, known as “CopyTrading” allows traders to copy the strategies and trades of other traders, potentially benefitting from their knowledge and experience.
It’s important to note that trading currencies (forex) can be risky and it’s always recommended to thoroughly research and understand the risks involved before investing any money.
Here is a step-by-step guide to using eToro to trade financial instruments:
- Registration: To start using eToro, you need to create an account by providing some basic personal information and completing the verification process. You can register on the eToro website.
- Fund your account: Once your account is created, you will need to deposit funds using a debit or credit card, bank transfer, or electronic wallet, such as PayPal.
- Browse and select financial instruments: eToro offers a wide range of financial instruments for trading, including stocks, currencies, commodities and cryptocurrencies. Search for available instruments, select the one you want to trade and click “Buy” or “Buy”.
- Place Trade: Once you have selected the instrument, you can place a trade by selecting the Buy or Sell option. You can also set a stop loss and take the profit level to automatically close a trade at a certain level.
- Track your trades: Once you place a trade, you can track it on your eToro account. You can see your open positions, account balance and trading history.
- CopyTrading: A unique feature of EToro is the ability to copy trades of other successful traders on the platform. You can search for merchants by name, activity and other criteria and use the Copy button to start copying their merchandise.
- Withdrawals: If you wish to withdraw your earnings or initial investment, you can request a withdrawal through the platform.
Importantly, eToro offers a range of educational tools and resources to help traders improve their knowledge and make more informed trading decisions. Make sure you take advantage of these tools and always do your own research and due diligence before placing any business.
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