eToro Account Features
To create the social trading environment, eToro allows traders to watch and copy leading traders on its proprietary electronic platform. The idea of social trading is to use ‘crowd-wisdom’ to get a better understanding of online trading strategy, with the aim of increasing investment returns to less experienced traders in the eToro community. Significantly, eToro claims that copied trades have had an 80% success rate since the launch of eToro social trading.
eToro is available in 13 languages and invites clients to open a straightforward trading account and then decide on whether they want to use the virtual portfolio to practice without risking real money or to activate a live trading account by making a minimum deposit of $50. Notably, the minimum size of a transaction after leverage is 1,000 units in either the virtual or real money portfolio. We were impressed by the possibility of switching between the virtual and real money portfolio at will, allowing traders to apply what they learn as they go along, to real money trading situations.
Risk Free Virtual Portfolio – eToro Demo Account
The free practice account at eToro is incorporated into the standard trading account as the Virtual Portfolio. The button is located next to the Live Portfolio tab when you register an account. The virtual/practice account replicates live trading in real market conditions. Indeed, the only difference is that traders are given virtual money by eToro to use for practice and any profits are not withdrawable. The practice account includes the powerful copy trading feature, so that clients can learn how to build a people-based portfolio and follow their trading activity. Significantly, experimenting with the virtual portfolio gives traders the same experience as they would have from live trading without withdrawing eventual profits. Notably, this includes copy trading, as well as access to all the financial instruments and trading tools.
Spreads and Leverage
The limitations on leverage vary at eToro depending on the type of financial instrument traded. Nevertheless, the minimum transaction size after leverage is 1,000 units. Leverage for Forex trading is between 1:50 and 1:400. The maximum for Stocks is 1:10, for Commodities and Indices 1:100 and for ETFs 1:5. eToro gets its revenue from the spread on each position, which is the difference between the Ask and the Bid price. At eToro, the spreads are from 2 pips.
The eToro Trading Academy is a comprehensive education centre providing easy-to-understand information for becoming a financial trader. There are free video tutorials, webinars and plenty of articles to help traders irrespective of whether they have experience or are just starting out.