Price: Minimum Deposit $200
Founders: Yoni Assia, Ronen Assia, and David Ring
Bare Naked Scam rating: 5 Thumbs Up
How Does eToro work?
Before we move on to discuss on eToro and how it works, I just want to make sure that you are aware of the risk involved when investing or trading.
There is no guarantee to your success, and you may risk losing all your investment monies. So long you are aware of the risk involved, we are good to go.
The very existence of eToro is to connect investors/traders (whether novice or expert) around the world into one place, and that place is eToro.
The amazing thing about eToro is its understanding of the problems faced by many novice investors/traders (For easy reference, “investors/traders” are herein known as “Traders”).
Investment and trading is a very wide topic, there are news feed every single minute or seconds and the market changes drastically, it is hard for you to monitor such market movements especially if you have other commitments like a full-time job.
This is where eToro is extremely helpful, it allows you to copy the trading action of other Traders.
Yes, everybody is saying that you should always be prudent and diligent when making your own investment or trades, but I feel that it creates more harm if you invest or trade blindly.
In eToro, if you do not wish to take the time and analyse each and every investment (we know it is almost impossible), you can do your due diligence on other Traders.
Source out the best Trader(s) who fits your criteria, and who has/have a long and stable track record, communicate with them and get to know a little bit more on their strategy. Basically, it is like finding a portfolio manager, but the good thing is you do not need to pay a single cent to them. To me, this is simply amazing!
These expert Traders may have lots of experience, and most likely know more than you in terms of investing or trading.
By following them, you basically leverage onto their knowledge and experience.
If you follow their trades closely and study their trading movement, you may be able to gain some knowledge and in future, and you might even do your own trades and people might follow you. That is where you become the “Expert” Trader.
Sourcing the Right “Portfolio Manager”
As I have mentioned above, you can copy another Trader. If you do not have the luxury of time to follow the markets closely, but you would still like to get a piece of the action, it is suggestible to find the right Trader to copy. In this video below, it will show you how exactly to find a good Trader to copy:
The “KEY” to finding a good Trader is “CONSISTENCY”. I am sure you would be interested to copy a Trader if he/she has constantly beaten the market right? If you found one, please let me know too, I would love to copy his/her trades.
When you have a question whether to BUY or SELL an investment…
Investment and trading is a subjective topic. Normally, when you have a question with regards to an investment or trading, who would you look for? An Investment Advisor? A stock broker?
Engaging an Investment advisor is costly, and normally a stock broker can’t give good advice because they do not trade themselves. So how do you get your question answered?
With eToro, you can post your questions to the “News Feed” and other Traders will give you their advice and opinions. eToro works just like a community, other Traders are willing to share their points of view, and it is up to you whether you want to heed their advice or not.
Afraid of trading REAL money at this moment?
It is fully understandable when you are new to trading and do not have the confidence to execute trades. It is a scary thing when you first started. Hence, to build up your confidence, you can trade with virtual money.
eToro provides you with the environment to learn how to trade by using a “Virtual Portfolio”. It works exactly like the “Real Portfolio”, but the only difference is that it trades with “Fake” money. In this way, you can execute whatever trades you want without the worry of losing real money.
However, if you really want to be successful with trading, I suggest that you take the “Virtual Portfolio” seriously, and treat it as though you are trading with real money.
What are the commission rates and spreads in eToro?
Because eToro is regulated, they are not allowed to charge an extravagant commission/spread on each trade. Check out the table below that discloses the typical commission spreads for each currencies:
If you are not sure what a “Pip” is, in Forex term, it is called “Percentage In Point” and it is a smallest price change an exchange rate pair (e.g. EUR/USD). An increase or decrease in Pips represents a profit or loss in the trade. For instance, if you are trading on Euro/US Dollar, and you realised a profitable trade of 20 Pips, your actual profit will be 17 Pips, and 3 Pips goes to the broker (eToro). This is a common practice in the trading market and you shouldn’t be alarmed by it.
What can you trade in eToro?
There are 30 Exchange-Traded Fund (ETF), thousands of listed stocks, 12 Indices, 5 commodities, and 31 currency exchanges. Though the stock exchanges are limited to the New York Stock Exchange (NYSE) and the London Stock Exchange (LSE), I feel that there are sufficient stocks for us to dive into.
Invite your friends and make up to $1,000
I’m not kidding, this $1,000 is cold hard cash which you can either cash out or use it for your trades. As long as you refer 10 friends who created and funded an account, you will make that money. The best thing is, not only you will make money, your friends will also get a initial $200 deposit into their trading account. That’s awesome right?
Is it hard to get money out of eToro?
It is easy to withdraw money from your eToro account. This is unlike many other brokers which will withhold your money for as long as they want. When you make a withdrawal request to them, they will pay money directly to your bank account within 5 working days. Most importantly, because eToro is regulated, they have to adhere to the Anti-Money Laundering (AML) regulations. Money have to be deposited to a bank account under the same name as your trading account, any third-party withdrawal will not be allowed.
For your information, the fees for withdrawal is as follow: