Hello guys, and welcome. Today we’re going to talk about eToro, which is one of the leading trading platforms anywhere in the world. Over the last few years, investing has gone from making slow, steady returns over a long period to let’s follow Wallstreet bets into battle and hope we don’t lose all our money. Millennials and Gen Z have been taking on the professionals with the Gamestop Short Squeeze and the rise of doggy coins like DogeCoin & Shiba Inu, for example.
Through new, cheaper platforms, it’s easier than ever for retail investors to get into investing. Since everyone has had a lot of time on their hands more recently, the interest in investing has risen significantly. This social media-fuelled growth has pushed one particular broker into the foreground. eToro is one of the leading brokerages in the space offering everything from currencies, stocks, commodities, and crypto for investors in over 140 different countries. But What is eToro, what sets eToro apart from its competitors, and what is their story? Here’s How It Happened.
What is eToro?
Well, they’re a world-leading brokerage platform. Still, perhaps they’re more well known as the brokerage that people use for social trading, being able to copy other investing influencers whenever they place trades.
The idea is that new users join the platform and learn from the more experienced traders. They then copy successful investors on the forum, with eToro able to automate this. The investing influencers, or those who did copy, then earn perks like monthly payments of up to 2.5% of the yearly average amount of money invested by the copiers.
How Does eToro Work?
eToro was founded in 2007 by two brothers, Yoni & Roman Assia, alongside David Ring, but back then, it was known as Retail FX. Their view was that by offering a cheaper & simpler platform, eToro could win over younger, more tech-focused investors, and this is still true to this day, with most new users in their early 30s. They wanted to improve financial transparency in the market by making it much more accessible to make investments. Retail FX focused on graphic representations of financial instruments to make investing more accessible and fun.
What is eToro Copy Trading?
The team then launched Web Trader to help people trade financial instruments like currencies and commodities via CFDs. But the real change came in 2010 when the group found Open Book, the first online social trading platform. They knew they were onto a good thing when they won the Fin ovate Europe’s Best of Show in 2011.
Open Book meant that investors no longer had to learn, test, and change their strategies; instead, they could imitate other investors on the platform who had a track record of success in the markets. Not only could people copy, but they could also interact with successful investors, posting status updates on what was an investing social media platform.
By 2014, eToro took another step in the right direction, exposing its customers to Bitcoin through CFDs, and continued to expand its crypto coverage. When crypto hit the big time in 2017, eToro was thrust into the limelight as one of the few brokerages offering everything in one place. This success led to eToro receiving private funding of $100mn in 2018. They’re using that money to continue innovating, including creating crypto wallets, expanding to US markets, and investing in blockchain research.
Who Uses eToro?
As eToro has grown, so have to invest in influencers like Jay Edward Smith, the most copied trader on the platform with around 25,000 followers and over $5mn in assets under management. During the first quarter of 2021, eToro gained more than 3mn new users to pass 20mn global users by June of this year. It has come in an environment where financial investment has been democratized.
Millions have greater access to online resources and don’t care about losing money with meme investing. While this might cause a significant correction over the next few years, it’s suitable for eToro, which profits from the trade spreads. And as far as Yoni Assia is concerned, he fully believes that copy trading is a form of the sharing economy.
How Does Copy Trading Work On eToro?
So how does copy trading work eToro-wise? Once you’ve opened an account via the official website, you’ll quickly see it’s different from other crypto platforms.
Unlike crypto exchanges like Binance or Coinbase, everyone gets their profile, a news feed, and a wall, similar to Facebook – it works as a social trading platform and a place to buy and trade crypto.
So, if you search for a coin (or stock) by its ticker or ‘hashtag’ – for example, $BTC for Bitcoin – you’ll find experienced traders who give their thoughts on the markets. and the current price action (PA) and post charts with technical analysis (TA). You can copy them if they’re part of the famous investor program. Or several people.
So, whatever funds you set aside to copy trade with – either part of your portfolio. It’s up to you – it will use to replicate their swing trades automatically – their buys, sell, take profit orders, stop loss, leverage if they are CFD trading, etc.
In terms of how to enable copy trading on eToro? Add a trader to your watchlist and click the ‘copy’ button by their name. Also, visit the CopyTrader page on the eToro website. Some of the best traders to copy trade are ranked in terms of profit gains over the last 12 months and risk score.
eToro Copy Trading Fees
There are no additional fees to pay. You pay the regular spreads you would if you were trading by yourself instead of using the CopyTrader feature.
There’s a minimum deposit, i.e., minimum copy trading capital, of $200. And each trade has a minimum amount of $1. Trades are executed instantly in real-time.
If approved as a famous investor, you can be paid to trade and allow others to copy trade. Find out more on the eToro website.
eToro Pros & Cons
- IT Offers access to more than 30 cryptocurrencies.
- IT has a Low minimum to fund an account and begin investing.
- Social investing: Ability to match moves of famous traders.
- Service is not available in all states.
What is the downside to eToro?
eToro's non-trading fees are high as there are fees for withdrawal and inactivity.
Is eToro a good idea?
Yes, eToro crypto is a great choice for beginners.