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Cryptocurrency trading attracts billions of dollars on a daily basis. Most of the trading involves people buying Bitcoins using real cash or using Bitcoins to purchase other cryptocurrencies. However, the crypto trading environment is also changing. A new crop of trading platform is allowing people to trade with cryptocurrencies without actually holding them.
Ideally, you purchase a cryptocurrency like bitcoins and you are allocated with a platform where you can sell some of it or buy more as price movements take shape. But unlike any other type of trading, you do not store the coins. Such is the type of trading offered by eToro, one of the most popular exchanges of its kind.
What is eToro?
eToro is a social trading CFD platform launched in 2007. It is one of the leading platforms on the global scene with at least 5 million traders. It has its headquarters in Cyprus, United Kingdom, and Israel. It offers services such as online forex trading; CFDs, financial spread betting, and copy trading. It is regulated by ASIC, CySEC, MiFID, CFTC, and FCA, and has taken home several awards. eToro is one of the leading platforms based on social trading. Social trading gives Forex traders who practice online trade an opportunity to retrieve information brought together by other retail and then making use of this combined knowledge and experience to trade via their own accounts. Traders connect each other to discuss trading strategies. With the aid of the eToro’s patented CopyTrader, it automatically copies the performance of their trading portfolio.
All countries can make use of this platform except- USA, Japan Canada, Belgium, Iran, Turkey, Korea, Brazil, Sudan, and Cuba.
Etoro is regulated by the Financial conduct authority located in the United Kingdom (FRN: 583263) and the CySEC (License: 109/10). With the aid of tier-1 banks, eToro uses a segregated bank account to store all clients’ funds. Without having eToro as leverage, you won’t be secured by any investor protection if you use a cryptocurrency for long. Trading with leverage involves the use of the CFD. This feature is great as you can select the level of leverage you desire for each trade. Its leverage levels are
eToro is one of the first brokers to go into crypto trading. With eToro crypto trading, you can go short and long in cryptos. Picking long crypto trading entails purchasing an instrument that follows the selected coin’s price. This instrument is neither a CFD nor a coin. Not being a CFD instrument MEANS that your crypto positions do not have an investor protection while not being a coin means it cannot be transferred to your wallet.
When you purchase eToro’s crypto copy fund, you possess crypto CFDs which are secured by the investor protection funds.
Compared to other CFD brokers, eToro accepts various types of coin. eToro cryptos include Bitcoin, Bitcoin cash, Ethereum, Ethereum classic, Litecoin, Ripple, and Dash; the only accepted base currency at eToro is the USD
eToroBitcoin charges no fee for trading but generates lots of income from overnight fees (roll over the fee for both short and long positions are $0 and $6 respectively. For first time deposits, the minimum amount required ranges from $50 to $1000 which is largely dependent on your location. It charges inactivity fees and withdrawal fees depending on your payment method. For CFD shares, eToro doesn’t charge commissions.There is also an invitation Bonus offered to users who successfully invite friends. They pay about $200.
eToro accounts and verification
Creating an account on this platform is fairly simple and can be done within a day. Details required for registration includes first name; last name, username, email address, password and phone number. After submitting these details, all you need is to agree to their terms and conditions and you are good to go.You can also sign in with your Facebook or Gmail account.
Beginners are given a free demo account after registering. This is used for practice, to have a taste of what investing is all about, so as to get used to the platform. eToro has an easy interface coupled with lots of instruments and tools for easy trading.
eToro functions to effectively innovate people’s investment. Asides from it’s traditional trading, it offers two distinct innovations: CopyTrades and CopyFunds.
This involves selecting who you wish to copy. At first, you can see pictures of users, but there is more information about these users such as their performance on a monthly or yearly basis. You can also view their portfolio. An eToro metric system is also available and there are a whole lot of other statistics which includes average holding time, profile description, trades per week, news feed and comments, and performance on charts. One major drawback of this feature is that just a part of your position cannot be closed.
These are funds based on CFD. In this feature, you don’t follow a trader like in CopyTrader, you just invest in an eToro traders portfolio (parallel investments in multiple successful traders) or in a theme (investing in cryptocurrencies or portfolio of big banks). With this feature, you can check asset distribution, performance and read fund’s investment strategy. One major drawback here is the high minimum investment requirement of $5000 for its daily clients.
Is eToro Safe?
eToro’s design is great, but its account login is not good enough. Its login system is just a one-step username and password method. This makes login very easy, but issues on eToro safety become a question. It has no sign in alerts for SMS or other features which could make it look more secure. This could be painful when you’ve placed a large sum at eToro.
Trader’s complaints can be forwarded to an eToro representative via phone (the account manager or a call center) or live chat. To local numbers in the United Kingdom, New Zealand, and Cyprus, telephone support is toll-free, and for quick responses, questions can be sent through their email. It involves different languages because this platform has offices all over the world. However, as at now, its customer support is a let-down because to get replies from calls, you have to wait for long. Even for emails, you’ll have to wait for several days even to as long as two weeks to get an answer which doesn’t solve your problem
How To Use eToro?
eToro trading has taken a different path, relative to that of the ZuluTrade. ZuluTrade functions as a Copy Trading company then later incorporated the social functionality feature. eToro, on the other hand, is a pure social Trading company, and to improve its functions, added the copy trading feature. eToro is considered the best platform for social trading which gives an opportunity for traders to gain more knowledge and ideas while interacting with each other. The investor, with the aid of the open book, finds himself in a social network focused on aspects of trading, finance, and investment. Investors might likely feel abandoned with this broker if its interactive feature was absent which is very common among other brokers immediately your trading account is opened.
Steps Involved in trading with eToro
Join eToro’s trading network
Joining eToro is very easy and free. You can make use of your Google account, Facebook account or with details such as your phone number, email, username and password.
Make a deposit
It’s not necessary you make deposits straight away but you must have a minimum of $100 if you intend to copy someone. It is advisable to start with $300 which gives you the opportunity of copying 3 traders. Deposits can be made through credit cards of any other preferred type of payment like PayPal, WebMoney, Skrill and Neteller. Deposits can be made through currencies such as EUR, USD, AUD, GBP, CAD, and JPY
Get some understanding in using the Platform
- Portfolio- This section is used to monitor your performance and view your open trades.
- Markets- This is where you trade and to make research on various markets such as Forex, Indices, EFTs, Stocks and commodities.
- Newsfeed- This is what informs you of all activities, and traders you following.
- People- This allows you to filter people to copy based on some unique criteria they possess
- Watchlist- This section allows you to add markets or people, to know more about them.
In a Nutshell
Etoro used to be a highly reviewed trading platform, but since September 2017, traders having been giving mixed reviews. This is due to the high demand for cryptocurrencies. On the bright side, it is good for social trading as well as for crypto CFDs. It has lots of interesting and innovative features and very pleasurable to use. Its non-trading fees are mid-range coupled with its competitive trading fees. It also has its drawbacks: The Customer service is not effective; the platform does not function on several occasions. Generally, we recommend that eToro be used for social trading.
Thank you for reading! Please feel at liberty to visit us often for more information on how to become a crypto expert.