Recently, I received an automated email from eToro asking for me to review their trading platform. I’ve been using the eToro platform for a few months and aside from a few bumps along the way, I have been relatively successful. So here’s my eToro review – the full low down including pros and cons.
You Cannot Buy Cryptocurrency on eToro
I need to make this clear – hence it is a heading.
If you are just starting out on your journey to investing in cryptocurrency, eToro is a great place to dip your toe in the water.
However, you are not actually buying the Cryptocurrency coin itself – you are simply trading on the ‘share price’ of the cryptocurrency.
This is very similar to investing in stocks and shares on the London Stock Exchange (LSE). You are in essence, speculating that the ‘share’ price of the cryptocurrency will go up and you will then have returned a profit.
For example, you may want to buy Ripple XRP cryptocurrency coins.
At time of writing, the ‘Buy’ price on eToro is $0.80. You deposit $1000 and buy XRP.
The ‘share’ price of XRP rises to $1 and you sell your ‘shares’. Subtracting the ‘spread (https://www.investopedia.com/terms/s/spread.asp) ’ and the transaction fees (around $25) from eToro, and you are left with a profit.
For beginners, I would say that this is in fact the biggest PRO in my eToro review.
Why you ask? Well, the process of setting up an account and starting to trade on eToro is very easy to understand – I’d say on a scale of 1 – 10, about a 7.
On the other hand – setting up an account on a cryptocurrency exchange, exchanging the currency and then downloading a e-wallet and sending the coin to the wallet takes a little more time and understanding.
So, if you are a novice or cryptocurrency enthusiast, eToro is definitely a good place to start.
eToro Review – What We Like About the Trading Platform
eToro is User Friendly
The eToro platform offers an abundance of cool tools and features to help the trading novice on their way to becoming a trading expert.
The main menu on the left-hand side is where you will usually navigate to when making an action on the eToro platform
In a quick overview, you are presented with:
- Watchlist – You can set this up so when you log in, you will see the currencies and companies that you are watching.
- Portfolio – Shows a page of your current investments (positions)
- News Feed – The social aspect of eToro is actually pretty cool. We just don’t recommend taking anyone posting comments too seriously.
- Trade Markets – You can invest not only in cryptocurrency, but other major currencies too as well as the technology and financial sector.
- Copy People – If you are a complete novice and would prefer to follow in the footsteps of active investors, you can in fact copy others. I’ve not tried this myself however it does look to be an interesting feature.
- Invest in Copyfunds – Instead of me trying to explain this section, take a look at this short presentation video from eToro’s founder Yoni Assia
And the rest of the links are fairly self explanatory.
From great looking trade graphs with extra tools that you can enable or disable (MACD, Parabolic, Fibonacci etc)
As a newbie, the social feature of eToro is actually quite helpful. You can get real time updates from over 6 million traders across the world.
At first, I found it helpful to read what others like me are saying about buying and selling. Links to the latest articles on the internet are posted from other investors which helps you to stay at the top of your game in terms of information gathering.
You can participate in the conversation if you want to but beware, you could find yourself losing hours of valuable trading time!
Easy to Deposit and Withdraw Funds
As mentioned above, it is relatively straightforward to open an account with eToro and deposit funds.
For newbie investors, it is handy to be able to deposit money using your bank card or credit card.
Most importantly, when it comes to withdrawing funds from your eToro account, that process was relatively painless too and I am pleased to report that the transaction took only 3 days for the withdrawal to appear in my bank account!
What we did not like about eToro
When you are investing in ‘shares’ on eToro – especially on cryptocurrencies, the spread (mentioned earlier) is rather high. So for example, If you wanted to buy Ripple XRP and the current buy price is $0.80, eToro will allow you to open a position at say $0.85.
Essentially, the difference of $0.05 goes into eToros’ back pocket.
That means that the minute you open your position and buy in, you are already in Loss. Hopefully, your share price will increase to $0.85 where you will be even.
eToro’s Stop Loss / Take Profit
When you place your order to buy in and open a position, you are able to adjust the stop loss and take profit amounts.
Essentially, the stop loss is you cut off point as to where you feel you would want to sell off if your shares took too much of a downturn.
This can be a good and a bad thing and I will explain my thoughts.
Cryptocurrency is a volatile market place – the pricing can shoot through the roof and fall through the floor. You can reach an all-time high (ATH) in one day and an all-time low (ATL) the next.
If you leave the SL and TP to their default, you may find that you go to sleep at night and the next morning, you position (share investments) have closed either to the fact that the share price reached the Stop Loss price or (better) the Take Profit price.
Many people have been caught out by not adjusting the SL and TP so just be aware if you do decide to invest that you are sure of these two amounts that you would be comfortable selling at.
UPDATE: I have just notice on the XRP trade that due to the volatile nature of this particular cryptocurrency, eToro have in fact disabled the SL and TP.
eToro is Limited on Cryptocurrency Choice
eToro currently only supports trading on 7 cryptocurrencies: Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, Dash and Ethereum Classic.
These are pretty much the current major players in the Cryptocurrency market however, if you are looking to get in early with Crypto forks and new start-ups you may find this frustrating.
If you do want to take the next step and buy actual cryptocurrency itself, have a read of our How to Buy Cardano ADA Cryptocurrency.
In summary of our eToro Review, We’d say:
• Easy to use
• Easy to deposit and withdraw funds
• Helpful community
• Cool tools to make your graphs look awesome
• Good communication from eToro
• Mobile friendly
• Not actually buying coins
• High spreads
• Tricky Stop Loss and Take Profit
• Limited cryptocurrency choice
All investments are subject to high market risk. This is an eToro Review. Decryptology are by no means offering financial or investment advice. If you do decide to invest in Cryptocurrency, please make sure you read all the terms and conditions of the respective exchanges and currencies. Cryptocurrency is a volatile market place. You may be at risk of losing your money just as much as you can gain. Invest responsibly.