There is a common myth among market participants that “A financial market is an arena for experienced traders.” Many renowned brokerage firms have successfully broken this myth. They have come up with advanced and easy-to-use trading platforms and features to magnify the trading standard of neophytes. It certainly includes firms like T1markets and HFTrading. But does eToro fall in this list? Is it a safe firm? Let’s find out.
About eToro
eToro was established in the year 2007. It is one of the oldest brokerage firms and has been rendering financial services for 13 years, but still, it does not hold banking licence and is not registered with any of the stock exchanges. Moreover, the broker’s website is complex and hard to go through in a single time for novice traders. The broker’s website says that 328,265,325 users have opened trade on eToro but, there are no facts to back this data.
History
The brokerage firm established in the year 2007 (13 years till date). Though being a relatively old brokerage firm, we see that several novice ventures such as Global TradeATF and T1markets provide larger trading opinions and advanced features than eToro.
Account Opening
The process of account opening with the broker is complex and asks for some sensitive and personal information from the trader which they might not feel comfortable providing. The firm takes several days for document verification. Hence, this entire process is time-consuming and irritates traders.
Minimum deposit
There is no information related to minimum deposit on the website; neither have they mentioned that their deposit fee varies with the country/market.
As per the information collected from various authentic sources, the broker’s minimum deposit is as high as $200. Here also, there are several exceptions:
- For residents of the United States and Australia, the minimum deposit is $50. Which is relatively high.
- For you residing in Hong Kong, Russia, China, Macau, and Taiwan, the minimum deposit amount is $500 which is five times that taken by some renowned brokerage firms such as ROinvesting and 101investing.
- For bank transfers, the minimum deposit amount is as high as $500.
Trading fees
The complex financial derivatives and forex trading fees are higher as compared to other brokerage firms. Also, non-trading fees are higher, which include high inactivity fees and withdrawal fee of $5.
Trading platforms
The broker has been operating in the market since long as mentioned above. Still, it has limited trading platforms. It does not provide MetaTrader 4 and Meta Trader 5, which other competitive firms, including HFTrading, T1markets, and Global TradeATF offer. Moreover, the platforms it provides have certain drawbacks which are discussed below.
Web Trading Platforms
The advanced features of Web Trader might lure you, but, the reality is that they are complex and problematic for both experienced and novice traders. You require a deep knowledge of how to use these tools and features but the broker does not offer free tutorial and videos for the same and charges a higher amount to avail its educational portal. The other major drawback of this web-based platform is limited customizability for workspace and chart.
Mobile Trading Platforms
The main drawback of eToro mobile trading platform is that it does not have the face or touch login which overshadows all its other features. It is because many experienced and renowned firms offer these advanced features to ease the login process.
Is eToro a Scam or safe?
eToro is not registered on any stock exchange and does not reveal its annual report on its official websites. Moreover, it also does not have any bank parent.
Thus, it raises the question on the authenticity of the brokerage firm and compels us to declare that it is not a safe venture to invest with. Think twice before investing with the firm or else you may lose your hard-earned money. The overall features on it are expensive and non-conducive for a trader. Thus, when you trade on it, the peril is the only thing you get in return.
Bad Deposit and Withdrawal Systems
The withdrawal of funds takes more than 5 business days to proceed. Also, the entire process is complex and requires an ‘n’ number of formalities. Moreover, it provides limited methods for funds deposit and withdrawal leaving some of the major ones. So, not all traders can trade with the broker in that case.
Customer Support Service
eToro offers a customer support centre where clients can fill tickets for any queries. But, the team is inefficient and response time is greater than 1 minute for the telephone. Its future requires some improvement, on major drawbacks such as:
- Phone support can be improved
- No 24/7 support
- Live chat is offline quite frequent
Various drawbacks of eToro
The major drawbacks of eToto include:
1) Service offered in only 41 U.S. states
2) While eToro has equity and forex trading available in other countries, the United States clients are limited to cryptocurrency trades
3) Process of withdrawal is slow
4) Slow user verification process
5) Meta Trader 4 and MetaTrader 5 not available
6) Minimum deposit is high
7) High non-trading fee
8) Customer support requires improvement
The Bottom Line
The broker is undoubtedly the oldest brokerage firm, but it requires many upgrades in its trading platforms, features and services. It does not provide MetaTrader 4 and MetaTrader 5 which almost every new financial service provider offers. Thus, it is high time that brokers should work on its major drawbacks to stand in the neck-to-neck competition with various top firms such as HFTrading, Global TradeATF, 101investing, and Primefin.
