eToro Is Why Im Broke

50 Words on – Why you can go Broke with eToro?

First of all you should be aware of the fact that eToro is mainly a social trading platform – the largest in the world probably – so if you are expecting to find a “classic” broker, you will be somewhat disappointed. The trading platform is overshadowed by social networking as the latter is their main focus. That being said, there is no downloadable version of a trading platform, just a web-based one, which lacks in certain areas but makes up when it comes to socializing.

 

How to Avoid Going Broke With eToro

  • eToro is all about socializing and copying other people’s trades. Be careful who you copy! Read the tips below.
  • When you choose to copy a trader, do not be fooled by big numbers achieved in a short period of time. Instead, look for traders with constant profit, stretched over a long period of time
  • Copy traders who use small to medium position sizes. You don’t want to risk 20% of your entire account on a trade.
  • Look for traders who use relatively tight stop losses and a good Risk to Reward ratio (at least 1:1)
  • Try to follow people who trade for a living. That way you know they are doing their best to achieve positive results.
  • Look for disciplined traders. If you see people are breaking their own trading rules, maybe it’s time to stop copying them.
  • Spread your risk by following more than one trader. Everybody has bad days, bad weeks or even bad months and you don’t want your entire investment to be tied to that person’s performance.
  • Read the Terms and Conditions thoroughly, don’t just click “I agree” because you are in a hurry.

 

 

The Good, the Bad and the Ugly Speak

You Trade, I Copy, We Make Money You Trade, I Copy, We Make Money

Established in 2007 in Tel-Aviv, eToro was at first a financial investing platform and later in 2010 it became a truly social platform, continuing to improve ever since. Their OpenBook and its Copy – Trading feature are what sets eToro apart from other brokers and although many have tried to provide a high level social trading service, eToro is several steps ahead… it’s the Facebook of social trading. According to them, they “empower over 2.75 million users in more than 140 countries worldwide”, while Wikipedia informs us that by the end of 2013 eToro reportedly had over 3 million accounts, making them a giant among brokers. Most of their success was made possible by a professional approach… after all, I don’t believe they used sweet talk to get 3 million people to join their platform.

eToro is regulated by CySEC in Europe and authorized by the Financial Conduct Authority in the United Kingdom and has won a multitude of awards throughout the years. To enumerate all of them would be almost boring but to see I’m not just throwing words, follow the link at the bottom [1]. As for trading conditions, they are as good as any, but keep in mind that eToro’s main goal is to be the best at social trading and their platform is somewhat simple. However, this can be a good thing if you are not looking for extremely advanced trading tools. Overall eToro offers a solid trading environment and if social trading is your thing, look no further because you’ve just found probably the best broker there is as far as trader interaction goes.

 

Oh… Pricey, Don’t You Think? Oh… Pricey, Don’t You Think?

The lowest spread offered by eToro is 2 pips and this is for USD/JPY, all others are more expensive to trade (EUR/USD is 3 pips and GBP/USD is 4 pips). These spreads can increase as they are not guaranteed and are dependent on market conditions, a situation encountered with almost all brokers, but still something to be aware of. Although the spreads are not extremely wide, I would like to see them improve in the near future, because such a high-profile broker should excel on all aspects. There’s another fee I don’t like: the conversion fee. If your bank account is in other currency than USD, when you deposit or withdraw, you will be charged 100 pips or 250 pips (depending on your bank account’s currency). I don’t really understand (nor do I agree with) a fee paid in pips… from what I know a pip can have different values so I think eToro should explain this better.

 

Conspiracy Theory… Conspiracy Theory…

I still haven’t found a broker without complaints on the Internet but when I do, I will probably believe something is fishy. You can’t be loved by everyone and eToro is no exception, but please read user rafat’s comment, quoted from Forex Peace Army and tell me your opinion: “i will discribe them as short as they fooled and scammed my and i have one prove thats is desputed 50usd from them with help of paypal and i can post it if needed” [2]. So, according to this guy, one of the most prolific brokers on this planet, together with one of the biggest e-wallet service providers on the planet came together and conspired against him with the purpose of stealing 50 bucks… What?! He says he has proof and he can post it if needed. Yea, that’s one I’d like to see.

Another guy complains because he is obligated to withdraw funds via the same method he deposited, but actually this is common practice so I don’t really see why all the fuss was necessary. As far as positive user reviews, there’s plenty of that to go around: Collin from the United Kingdom says he’s been with eToro for almost a year and that he is enjoys the simplicity of the platform as well as the copy trading system [2]. Bottom line, the Ugly side of eToro is not so ugly that you can’t stand looking at it and yes, there are complaints but nothing major or never seen before.

 

 

Editor’s Note – Is eToro a Scam?

I’ll tell you this: if 3 million people have been scammed and they don’t even know about it (if they did, I assume they would have closed their accounts), then eToro deserves the Oscar of scams. Sure, a lot of people call them frauds or scams but then again, a lot of people live in a fairy tale or in a movie where everybody is hunting their stop losses and the biggest corporations of the world are out to get their 50 bucks.

 

Bottom Line – Would I Trade with eToro? As a Leader

Copy trading and social trading are simply not my cup of tea. As a social trading experience, eToro is probably the biggest name in the world, and I would probably trade only as a “leader”, not as a “follower”. However, if I were looking for a networking experience, eToro would probably be one of the first places I’d start, so if you’re looking for a head start in your trading career, Etoro might just be the right place for you.

 

References

  1. eToro Awards
  2. FPA on EToro

 

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