ETORO : BROKER REVIEW

Etoro Review

Overall Rating

4.8/5

Rated #20 of
Recommended FX Brokers

Min. Deposit

USD 1000

Regulators

CySec, FCA 

Trading Desk

No Trading Desk

Crypto

Yes

Total Pairs

47

Islamic Account

Yes

Trading Fees

Low

Account Activation Time

24 Hours

Forex Trading Africa annually reviews forex brokers regarded as the best in the world who accept South African traders. We provide valuable information on the platforms, analysis and tools as well as pricing for you to base your decision on when choosing the right broker for your trading needs.

To trade forex in South Africa, you need to open an account with a regulated broker. Forex is traded over-the-counter through a network of brokers and financial institutions as opposed to a centralized exchange. Forex is a risky instrument to trade. You can minimize the risk by trading through a regulated forex broker who you can trust.

ETORO OVERVIEW

eToro is a multi-asset, international retail broker that offers clients access to a multitude of financial assets and a hugely popular copy trading platform and community. All trading is done via eToro’s innovative trading platform which comes with cutting-edge trading tools and features.

The Israeli-based company is best known as the world’s leading social copy trading broker. eToro’s CopyTrader system and CopyPortfolios investment strategies are key features that make their platform one of the leaders in the fintech revolution. Etoro’s strength as a copy trading broker is driven by the fact that its user base numbers over 10 million traders located around the world.

Founded in 2007 originally as RetailFX, eToro is regulated by several top-tier authorities, including the preeminent FCA in the UK, CySEC in Cyprus and ASIC in Australia. eToro accepts traders in South Africa and is considered reliable, regulation-compliant and safe to use by South African forex, CFDs and copy traders.

eToro clients have access to more than 2 000 financial instruments via eToro’s trading platform, including forex, cryptocurrencies, stocks, ETFs, indices and commodities. The broker’s own products, CopyTrader and CopyPortfolios, allows traders to learn from each other, share live trading information and capitalise on collective trading power.

The fintech company was founded as a financial trading technology developer and pioneered groundbreaking social copy trading technology. In 2010, eToro released its revolutionary OpenBook social investment platform along with its CopyTrading feature. Today, eToro has over 13 million registered clients in over 170 countries.

eToro is slightly pricey for trading forex and CFDs when compared to other international brokers. However, retail traders don’t choose eToro because it offers the best spreads and lowest fees. They mostly choose eToro for its outstanding social copy trading capabilities and innovative proprietary trading platforms.

ETORO FAST FACTS

Founded

2007

Founded by

Yoni Assia

Ronen Assia

David Ring

Based in

Tel Aviv, Israel

Regulation and license

FCA        Financial Conduct Authority, United Kingdom

CySEC    Cyprus Securities and Exchange Commission, Cyprus

ASIC       Australian Securities and Investment Commission, Australia

Does eToro accept forex traders in South Africa?

Yes

Products

Forex

Stocks

Cryptocurrencies

Commodities

ETFs

Indices

eToro is the best forex broker for

eToro has the largest social copy trading network in the world. Even though eToro is a multi-asset retail broker and suitable for beginner, intermediate and advance forex and CFDs traders, the broker wins hands down as a superior trading environment for social copy traders.

One of eToro’s key differentiators is the fact that it created a massive community of traders and investors, as opposed to solitary trading online. eToro’s bustling online social network of traders interact, discuss ideas and share their trading decisions and strategies on its social news feed.

Trading platform

Virtual Trading (Demo)

eToro proprietory platform

CopyTrader

WebTrader

eToro trading model

Market maker using Straight Through Processing (STP) and No Dealing Desk (NDD) practices

 

Web-based trading platform

Yes, an easy-to-use, intuitive proprietory platform

eToro is not a MetaTrader broker and does not offer cTrader.

Mobile trading app

Yes

Minimum deposit

Minimum deposit US$200 (R3 100)* on Standard account

* Conversion rate at January 2020

 

Leverage

The following maximum leverage amounts are defined by the European Securities and Markets Authority (ESMA), and apply to eToro retail clients:

  • x30 for major currency pairs (such as EUR/USD)
  • x20 for non-major currency pairs (such as EUR/NZD), Gold and major indices
  • x10 for commodities other than Gold and non-major equity indices
  • x5 for CFD stocks and ETFs
  • x2 for cryptocurrency

Spreads, commission and fees

There is no charge to open an account with eToro and registered users automatically receive a US$ 100 000 demo account for free.

eToro does not charge management, rollover or ticketing fees and stock investment is commission-free.

Withdrawals incur a low fee of $5 and there are no clearance fees.

eToro charges various spreads and fees for some trades and withdrawals.

Spreads as low as 1 pip for EUR/USD and USD/JPY.

Scalping

Not allowed

How to deposit funds in an eToro account

Bank transfer

Credit/debit cards

Electronic wallets

PayPal

NeTeller

Skrill

Rapid Transfer

iDeal

Klarna

How to withdraw funds from an eToro account

Customers may withdraw funds from their eToro account at any time. Funds can be withdrawn up to the value of the balance of your eToro account, minus the amount of margin used.

Funds are withdrawn using the same method and sent to the same account that was used for your deposit. Payment will be made in the following order of priority:

  • credit card
  • PayPal
  • bank transfer

eToro withdrawal requests are subject to a withdrawal processing fee. You will see the actual withdrawal fee in the Cashier after you have entered the withdrawal amount; at this point you can still call a halt to the request.

Client base

Approximately 13 million registered clients (2020)

Customer support

Multilingual 24-hour, Monday to Friday

Live phone support operates in several locations on a toll-free number

Live chat available on the eToro mobile app

 

IS ETORO SAFE TO USE?

eToro is a well-established fintech company with a solid reputation as a stable, regulation-compliant and safe retail broker to use for forex, CFDs and social copy trading.

The company has been in business since 2007 and has one of the largest trading community networks in the world. It is regulated by several top-tier authorities, including the preeminent FCA in the United Kingdom.

The Markets in Financial Directive (MiFID) allows eToro to operate as a regulated entity throughout the European Union.

 

Deposit insurance

eToro offers free insurance of up to 1 million EUR/GBP/AUD, depending on the regulated entity.

EToro has purchased an insurance policy form Lloyd’s of London which will cover claims of eligible clients suffering from losses in the unlikely event eToro becomes insolvent or in the event of misconduct. Terms and conditions apply.

Note: Cryptocurrency trading (non-CFDs) is not covered by this insurance.

Segregation of funds

All eToro client funds are held in segregated client bank accounts at regulated banks.

All retail client money is distributed across major banks and regularly assessed against eToro’s risk criteria.

Negative balance protection

eToro offers negative balance protection. On rare occasions in which market conditions cause a client’s equity to go into the negative, eToro will absorb the loss and reset the client’s equity to zero as if it is a standard retail account.

Overall Rating

4.8/5

Rated #20 of
Recommended FX Brokers

Min. Deposit

USD 1000

Regulators

CySec, FCA 

Trading Desk

No Trading Desk

Crypto

Yes

Total Pairs

47

Islamic Account

Yes

Trading Fees

Low

Account Activation Time

24 Hours

WHAT DOES ETORO OFFER ITS CLIENTS?

 

Leverage

Each instrument has maximum leverage limitations which are guided by industry regulations, as well as eToro’s own efforts to promote responsible trading and mitigate the risks of trading with high leverage.

  • x30 for major currency pairs (such as EUR/USD)
  • x20 for non-major currency pairs (such as EUR/NZD), Gold and major indices
  • x10 for commodities other than Gold and non-major equity indices
  • x5 for CFD stocks and ETFs
  • x2 for cryptocurrency

Competitive spreads and fees

Spreads charged by eToro are slightly higher than what you would pay at other brokers but this isn’t a problem because the slippage is extremely low.

Opening an account on eToro is free.

No management or ticketing fees are charged.

No rollover fee charged.

Stock investment has no commission.

eToro charges various spreads and fees for some trades and withdrawals; view what fees you paid as well as aggregated fees for different periods in your Portfolio page.

Withdrawals incur a fee of $5 and there are no clearance fees.

CFD positions that stay open overnight incur a small fee, relative to the value of the position. It is essentially an interest payment to cover the cost of the leverage that you use overnight.

Weekend fees are overnight fees that are charged for keeping positions open over the weekend. Therefore, a weekend fee is triple the overnight fee. Weekend fees are charged either on Wednesday or Friday, depending on the asset.

Commission-free stock and ETF trading

eToro offers commission-free stock and ETF trading. eToro launched their 0% Commission Stocks service in 2013 and continues to add to the wide selection of stocks that clients can trade or invest in on the global stock market.

Usually, brokers charge a commission fee when clients buy or sell stock, ETFs and other investment products. The price ranges anywhere from $1 to $50. Commission-free stock and ETF trading through eToro gives the retail broker a strong competitive edge.

Zero-commission means that no broker fee is charged when you open or close a position. It does not apply to short or leveraged positions. Other fees may apply.

Derivative trading instruments

eToro offers multiple derivative trading instruments for trading CFDs for currency pairs, stocks, commodities, indices and ETFs.

A derivative is a contract between two or more parties where the value of the underlying asset is agreed upon and settled when the contract is closed. Parties do not take ownership of the financial asset, they merely speculate on price changes.

eToro trade markets

Forex 60 plus : majors, minors and exotics
Stocks CFDs Such as Apple, Tesla, Google, Facebook and Amazon
Indices Such as GER30, NDQ100, DJ30, SPX500 and FRA40
Commodity CFDs Such as oil, precious metals, natural gas and agricultural food stuff
ETF CFDs Such as SPY, VXXB, TLT, HMMJ and QQQ
Cryptocurrencies Such as Bitcoin, Bitcoin Cash, Ethereum, Ripple, Dash and Litecoin

 

eToro proprietory trading platform

eToro offers clients a proprietory trading platform and app. It is does not offer MetaTrader 4 or MetaTrader 5.

eToro’s Visual FX trading platform is easy-to-use, has an intuitive interface, it’s rich in graphics and offers clients a number of innovative trading features. eToro is renowned for pioneering financial technology innovations which make their proprietory trading platform unique.

All traders on eToro trade manually. Fully-automated trading systems such as MetaTrader 4 and MetaTrader 5 are not permitted at eToro. Therefore, when you copy another trader on eToro, you can be sure they are placing each trade manually.

eToro’s manual trading practice is an important aspect of its social copy trading platform. Other social trading platforms permit both manual trading as well as automated strategies and may aggregate the performance of its expert traders.

eToro mobile app

eToro launched its mobile app in 2012. The latest version supports WebTrader and OpenBook. The app is user-friendly, rich in graphics and available for iOS and Android Smartphones.

WebTrader

eToro launched WebTrader in 2007. It was developed to make online trading easier to manage for anyone, anywhere in the world.

WebTrader is a Web interface that copies and packages your submission on your desktop in a secure fashion, transmits the submission in a fully-encrypted message to the FDA and then removes any traces of its presence from your PC.

The current version is the eToro WebTrader 2.0. It integrates the innovative eToro OpenBook and CopyTrader software that allows you to search for traders to follow and automatically copy their trades into your own account.

OpenBook™

eToro launched OpenBook in 2010. It was the world’s first social trading platform and was designed to allow anyone in the world to join the fintech revolution by copying other successful traders using the innovative CopyTrader™ feature.

OpenBook attracted global attention and eToro received the prestigious Finovate Europe Best of Show Award in 2011.

CopyTrader™

eToro’s CopyTrader platform is the broker’s most popular feature. The software allows you to view what real traders are doing in real-time and copy their trading automatically. Basically, when the professional’s trade, you trade.

CopyTrader is an excellent tool for beginner forex traders as it allows you to learn the basics from the experts or otherwise, saves you time from monitoring the markets and opening and closing positions.

To encourage top traders to get copied, eToro created the Popular Investor Programme.

CopyPortfolios

CopyPortfolios is a feature that is unique to eToro. Formerly known as CopyFunds, the thematic investment product bundles Top Traders or various financial assets under a predetermined market strategy.

The machine-learning software that drives CopyPortfolios should generate maximum return on trades. Basically, it’s like having thousands of expert traders working for you. CopyPortfolios is designed to minimize long-term risk and promote growth opportunities by creating diversified investments.

You can invest in two types of CopyPortfolios:

  • Top Trader Portfolios which offer the best performing and most sustainable trades on eToro
  • Market Portfolios which bundle together CFD stocks, commodities or ETFs under one chosen market strategy

eToro Popular Investment Programme

eToro offers a Popular Investment Programme (PIP) which offers eligible clients different benefits. These range form spread rebates to a monthly payment and a management fee for traders who reach elite status.

The Popular Investment Programme is for advanced traders who allow other traders and investors to copy their trading strategies. Basically, Popular Investors get paid to get copied.

eToro’s Popular Investment Programme was developed to support the CopyTrader platform. The PIP platform enables successful investors to build up their trading business by sharing their expertise and expanding their assets under management (AUM) on the eToro proprietary trading platform.

eToro demo account

When you open an active account with eToro, you automatically receive a free $100 000 demo account that can be used to build a virtual portfolio to practice and experiment with CFDs trading or social copy trading. The market prices are real and appear in real-time.

There is zero risk trading forex with an eToro demo account because you use ‘fake’ money to open positions. It’s a great way for beginner traders to develop their trading strategy without the risk of losing their own money.

eToro Mobile Wallet app

eToro offers a Mobile Wallet app which allows cryptocurrency investors to hold the underlying cryptoasset in a secure location. The app uses a multi-signature scheme to ensure your valuable cryptocurrencies are held under the tightest security.

eToro Earnings Reports Calendar

eToro publishes upcoming earnings reports from major publicly-listed corporations. The Earnings Calendar lists upcoming earnings reports that are scheduled to be released. The entries are ordered by market cap, the financial instrument, sector and expected release date.

Earnings reports play a massive role in trading as financial statements have the ability to drive stock prices up or down. A company’s market value may fluctuate considerably around the time of the earnings report is published. Knowing when the report is scheduled to be released, gives traders and investors an early heads up of possible price changes.

eToro Club

eToro Club offers VIP accounts with five tiers. The benefits vary depending on the type of club membership you sign up for.

Silver Exclusive access to eToro’s in-depth market webcasts, a dedicated Customer Success Agent to enhance your Club member experience and access to exclusive data- based Copy Portfolios. Silver members will also be eligible to receive an eToro debit card.
Gold Receive the same offers as the Silver tier as well as access to live webcasts, market analysis updates and a dedicated account manager.
Platinum Receive the same, plus additional benefits; no withdrawal fees, free subscription to The Wall Street Journal, access to the Delta PRO app with unlimited exchange and wallet connections, real-time prices, and automatic sync across devices; and eToro Trading Central signals platform which helps form confident, timely and educated investment decisions.
Platinum Plus Receive the full range of offers and services from the previous tiers, plus one-on-one Zoom meetings with their dedicated Account Manager, exclusive access to special sporting and cultural events and much more.
Diamond Receive all of the above, plus access to a Financial Times subscription, exemption on exchange fees and one-on-one Zoom meetings with their dedicated Account Manager. Diamond members are also invited to participate in eToro’s prestigious Diamond events which take place in different locations around the world.

Research

eToro provides quality daily market updates and analysis as well as a broad range of social copy trading platforms. Content in video and written format is published on a regular basis, including Daily Market Reviews.

 

Education

eToro produces a great selection of educational podcasts, videos and webinars. Webinars and training videos offer clients valuable industry tips on trading strategies and market insights. These are designed to improve clients’ trading knowledge and help them hone their trading strategies.

eToro Trading Academy

Clients can register for free online or classroom courses hosted by the eToro Trading Academy. Professional traders and in-house educators provide a wealth of information to eToro clients on how to trade forex and CFDs as well as social copy trading.

The eToro trading course is split as follows:

  • the financial markets
  • types of traders
  • key trading terms and examples
  • how to trade different financial instruments
  • Q&A session

 

Islamic account

eToro offers an Islamic account in accordance with Sharia law. The benefits of an Islamic account are:

  • no interest on settlement for more than 24 hours
  • consistent zero-rollover interest

TYPES OF ETORO CLIENTS

Retail clients The minimum deposit is USD 50

Retail clients have access to all available financial instruments via eToro’s proprietary trading platform and can either trade manually or via CopyTrader.

Leverage is restricted for Retail clients but they do receive certain protections such as coverage by the Investor Compensation Fund and recourse to the Financial Ombudsman Service.

Retail clients receive negative balance protection and margin closeout restrictions.

Professional clients

 

These clients have successfully passed a test to determine their suitability to qualify as Professional Client.

Professional clients waive certain ESMA protections such as the Investor Compensation Fund and recourse to the Financial Ombudsman Service.

Professional clients are offered higher leverage which is associated with higher risk.

IN SUMMARY

eToro is a well-established online retail forex broker with a solid reputation for being reliable, innovative and regulation compliant. The global broker is regulated by several top-tier authorities, including the preeminent FCA in the UK. eToro accepts South African clients and is considered safe to use for forex, CFDs and social copy trading.

eToro is regarded as the best broker for social copy trading and has the largest online community of copy traders in the world. The broker has created a number of groundbreaking trading tools and continues to be a leader in the fintech revolution.

eToro is also the best broker for beginner traders, primarily because of its innovative CopyTrader platform. Learning to trade while studying and copying how the professional’s trade is the best way to hone your own trading strategies.

The global broker publishes in-depth market analysis and educational articles, videos and podcasts as well as invites you to join the eToro Club and eToro Trading Academy to partner with you on your forex and copy trading journey as a beginner trader.

FOREX TRADING AFRICA DISCLAIMER

Trading foreign currencies on margin carries a high level of risk and it may not be suitable for all traders and investors. Forex is a highly leveraged financial instrument and these high-risk stakes can result in you losing a substantial amount of money. Consider your appetite for risk before trading forex using real money on a live account.

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