eToro was founded in 2007 in Limassol Cyprus by brothers and co-founders Jonathan and Ronen Assia. eToro initially rose to prominence due to its unconventional and patented visual trading platform which presented online currency trading (forex) as a series of games. Initially eToro’s financial trading platform was a download only product incorporating colorful trading visualizations which conceptualized the trading process as a race between currencies and a visual tug of war amongst others.The trade visualizations helped popularize eToro and identified the company as offering simplified financial trading to an audience of primarily novice financial traders. The company subsequently expanded its product offering by launching a professional trader’s application “Expert Mode” and a web based trading platform “WebTrader”.In 2010 eToro was the recipient of the MoneyAM online finance award for best active trading platform and the World Finance award for most innovative trading platform.
In 2007 eToro received $1.7 million in initial funding from a consortium of investors to fund its ongoing operations and development plans. It followed this up in 2009 with a second round of funding which delivered $6.3 million and a third funding round in 2010 which delivered a further $2.4 million. Throughout this period the company has continued to expand and now records numerous overseas offices.
eToro is a financial trading company providing personal online financial services in forex, commodities and stock indices.
Founded in 2007 it is one of the world’s largest online financial trading communities. eToro is active in over 160 countries worldwide.
As eToro is primarily a platform and software provider it is not itself a financial broker rather it connects its customers with third party brokerage services provided by the following brokers: RetailFX, IC Markets and FX Solutions.
Services and Features
eToro provides online financial trading in currencies – the 7 major currency pairs and crosses – commodities – gold, silver, oil – and indices online to retail customers around the world. eToro’s products are offered via its broker partners who are licensed and regulated to offer foreign exchange trading in their home markets. In addition to providing direct access to financial trading brokers eToro has widely publicized its online financial trading community which it claims to be the world’s largest. eToro offers online financial trading in 15 languages
eToro offers financial trading on small forex lot sizes, whereas traditional forex trading lots are valued at $100,000 and mini lots at $10,000 eToro offers trading on micro lots of $1,000 in addition to both mini and standard lots. eToro’s leverage provision of up to 400 times places it among the numerous financial trading companies which have received criticism for their use of highly leveraged trading. These leverage levels are far beyond the maximum permitted under the new US Commodity Futures Trading Commission (CFTC) restrictions which stipulate a maximum leverage of 50 times for major currency transactions conducted by accredited brokers. eToro has recently taken steps to try and modify this through the introduction of a voluntary code of practice called “Responsible Trading” which encourages traders to voluntarily restrict their use of high leverage levels.
eToro has introduced various community features in the financial trading process. The eToro trading platform provides access to a traders messaging system which enables traders to communicate directly with one another, in addition to a “traders insight” tool which displays the direction of trade in which the majority of eToro’s 100 leading traders are trading. In addition eToro offers regular trading challenges where its traders can compete for cash prizes.
1. Low Minimum Account Opening and Trading Amounts.
eToro offer traders the opportunity to trade their practice accounts for free. This is very important if you are new to Forex, or you would like to develop confidence and new trading strategies.
Traders can start trading live with just $50 and progress up from there.
2. Low spreads.
This means effectively, how much it will cost to trade. If you are trading frequently the spread will soon start adding up, which is why it needs to be as low as possible.
With eToro the spread goes down to just 2 pips on the EUR/USD pair, which is extremely good.
3.Instant Execution Of Orders.
This is vitally important some Brokers will re-quote meaning that you cannot get into or out of trades at the price you request, especially during fast moving markets.
This is often a consequence of liquidity, because many brokers don't have enough trading volume to ensure they can always buy at every price. However, eToro is one of the largest online brokers. This means that the liquidity they can give is very reliable. They also use a high quality, usable platform to back it up.
4.The Opportunity for Good Education and Training.
eToro has a great training program with tutorials and training guides. It's very easy to develop a full understanding of the technical and fundamental aspects that affect the prices of currency.
Also in July eToro started 'OpenBook', which is essentially a social trading network. It means traders can follow the trades or exerts and other traders in the network in real time, as they happen.
It's a brilliant idea, and there is nothing else currently like it in the industry. Traders can use the professional charting and graphing tools, or up to the second financial news and data to develop strategies, in conjunction with communicating and watching other experienced traders through the OpenBook network.
The platform they use is also designed to be very intuitive. It's easy to get to grips with for newcomers with video walk throughs, and it's also set up to make it fun and fool proof. In fact eToro actually won the World Finance Award for the 'Most Innovative Trading Platform 2010'.
For those with more experience, there is the expert mode which has the same level of functionality but without the 'game' aspect.
5. Leverage
Another key area and this eToro review wouldn't be complete without it. However, Traders should be careful with leverage, as it means you are trading with borrowed money and losses or gains are very much exaggerated. At eToro the leverage starts at 5:1 and goes up to 400:1.
You can also trade at eToro all day everyday 24/7, with the customer service team available at all times for problems and issues.
Money can be deposited by card, wire or with paypal and withdrawals are hassle free.
They have worked hard to create a real community feeling for all traders from novice to professional.
There is a big forum to bounce ideas off or share other trading experiences, as well as trading competitions and also a private call function for advice from their expert traders.
On the negative side you have to download the software platform to trade, sometimes a web based platform can be more convenient.
However, this is a minor point and overall I am very happy to trade with eToro and recommend them as a broker.
