Is eToro a scam?

Or the fastest way I ever lost $50. Actually “only” $25…

But first of all the I’ll answer the question posed in the title of this entry: no. eToro is not a scam. However it’s very easy to lose money if you’re not careful. And unfortunately I wasn’t that careful.

And now on to the story. I discovered eToro accidentally and I’ve spent quite a few days on the demo account to familiarize myself with the system before commiting to deposit. Unfortunately there are some differences when you’re dealing with a real account. Differences I didn’t know about until after I actually made the deposit. If you read around about Forex trading systems, there are warnings everywhere to only invest money that you afford to lose. And I heeded them, although the $50 required as the minimum amount to be deposited is at the top of my “I can gamble that” threshold. On the demo I wasn’t actually trading currencies but commodities, more specifically gold and as it was going very low I thought hey, I can’t go wrong with this, it has to climb back to a “normal” rate sometime and that could earn a bit of money. I could even set a “take profit” limit and have the computer work for me…

This is where I went wrong. You see, on the demo account they give you 2000 virtual dollars to play around with (and you can request more by contacting customer care) and this gives you the ability to use low leverages. To be short: leverage gives you the ability to “move” a large sum of money by using a small amount of money. So I made my deposit and clicked the commodities tab only to find out that the minimum amount of money I should have had to be able to start one trade with gold was $200. Nasty. Clicking back to the Forex tab I received another blow: with $50 deposited one could only initiate two trades and these trades are incredibly risky as you’re using a 400x leverage. You can indeed win big with this leverage but it’s a lot more likely that you’ll lose big. You see when you initiate a trade there’s a “stop loss” defined and with a 400x leverage it all becomes very sensitive. What I mean is that if the exchange rate suddenly moves by a few thousandths of a unit, you’re not there to close your trade in time and your trade’s stop loss is tipped you lose all the money you invested in the trade. Even if the rate later returns, your money is gone. Lower leverages give you less profit but the currency can fluctuate quite a lot without risking too much. But lower leverages require more money. With 400x trades you’re practically playing an action game watching the 1 minute charts, keeping a close eye on the slightest modifications in the exchange rate and hitting the close trade button at the right time.

And this is where another downside of eToro comes into play. While the interface is butter smooth in demo mode but there are serious lags when switching to real money trading. And it’s not my imagination, many others are also complaining about this around the web. And these lags can cost.

I stopped when my balance went under $25 and I couldn’t initiate another trade. Now we’ll see if my withdrawal request will actually yield because the process sort of started out on the wrong foot as I requested the withdrawal to be made via PayPal yesterday and today they’ve sent me an e-mail requesting my bank account details and stating that I’ve requested the money by wire transfer. I politely replied that they’re wrong, and even their interface confirms this. (I’ll keep you posted on how this all progresses – watch this post for updates.)

I wrote this post to give others a chance to learn from my mistakes before commiting to deposit. Hopefully…

«
»

25 Responses to “Is eToro a scam?”

  1. Steve  on October 25th, 2009

    I actually had one of the best experiences with E-toro, If your new to the Forex Trading you might now like it as much as i do. But it’s helped out ALOT.

    Nohthings perfect but i’m pretty sure if you know what you are doing you’ll find e-toro is at least one of the best. If your new to forex trading. do some google’n about the industry first and get your feet wet and then try the e-toro demo so you have a better understanding of how everything works.

    I see too many people bashing good programs not knowing what they are talking about. Another good one is FAP Turbo but… like everything else it’s not perfect!

  2. afatninja  on December 9th, 2009

    etoro is the worst site ive used, they are ignorant people who allow one nation to take over its chat room and verbally and racist abuse other members, and when you complain, they ban you not them. Do not use this site they are not to be trusted. there are many better sites out there.

  3. cava  on January 11th, 2010

    What are the ‘better sites out there’

  4. Andrei  on January 31st, 2010

    I asked my broker about this.
    He said: I do not recomand to enter there. You can loose your money very fast! But,… look I have some recommended stocks that you can try. So, I listed to him… I do not regret this!
    Well, good luck anyway!

  5. Juno  on February 3rd, 2010

    First things first.

    In the case of leverage the only difference is that if you loose you can loose slow or fast same way as if you win.
    So if the rate of loosing is the same if you start making profit at x10 you will also be making profit at x400 but much more profit, same goes for loosing.

    I recommend you to star with the demo account use and learn forex for a month maybe two then go for real trade account.

    To Andrei:
    Of course your broker said that we wants a share of the cake.

  6. mokashi  on March 7th, 2010

    Fuck eToro
    They have program which grabs money to their account and finally u will lose.
    You will never win

  7. Omniforex Reiew  on March 8th, 2010

    Using eToro alone. you can make losses. what is required is a forex strategy and accurate fx signals.
    This way you are guaranteed to make profits consistently.

  8. optionrider  on July 11th, 2010

    They are a joke. If you want to trade forex, not gamble, manage your risk. You shouldn’t risk more than 5% of your account per trade (if you have $1000 on your account your maximum risk per all open positions shouldn’t be more than $50). EToro is probably a bucket shop as they’re based in Israel, have their corporate headquarters in Cyprus (where business regulations are hardly existent) and their FTC “legitimacy” doesn’t mean too much as spot currency markets aren’t regulated in the US and all over the world. One of the best firms where you can open an account with less than $50,000 is Dukascopy in Switzerland (they also have offices in the US and other countries), but for accounts below the 50,000 USD threshold your commission rates will be exorbitant by forex standards albeit you’ll have access to one of the best professional trading platforms in the industry. They are not regulated by US laws and you still can hedge your bets by opening offsetting positions to lock your losses or profits (plus transaction and carry costs). And, last but not least, if you’re set up with them (which is quite a lengthy and meticulous process) transfers of your profits is fast and easy. My withdrawal requests sent by e-mail, often over $50,000, are processed and completed within 24 to 36 hours and the only fees are charged by my bank for receiving the wires.

  9. ForexWise  on December 26th, 2010

    Hello,
    Successful trading is about sustaining profitability over a period of time and not about gaining or loosing individual trades. Basically, you can earn significant returns if you allow yourself to see the larger picture. However, traders often make terrible mistakes while trading. This takes place when a trader is unsuccessful with a trade they were certain would be a winner. As a result a trader has negative feelings of failure and plan revenge against their broker. Traders must accept the risk of each trade before they enter their position. By removing emotional ties to your trades you will only then see repeatable results and realize that your broker may have nothing to do with your misfortunes.

    Happy Trading!

  10. optionrider  on December 28th, 2010

    My post was about the broker, not trading. I do manage my risks and assess quality of particular brokers. I also have an account with Interactive Brokers and believe that although they are the best for high volume day and swing trading of equities, ETFs and options, they are one of the lousiest Forex brokers (I mean legitimate brokers, not bucket shops like e-toro) and their charting software is a joke (I use third party charts for my equity and options trading).

  11. Shakhawat  on May 26th, 2011

    Is E toro is realy works from bangladesh?

  12. Shakhawat  on May 26th, 2011

    Is E toro is realy works from bangladesh?
    What is the Withdraw process from bangladesh?

    Is E toro PPC / PTC / Bux websites?

  13. optionrider  on May 26th, 2011

    No, from Israel and Cyprus (the server is in Israel).

  14. Eligold  on August 21st, 2011

    I do not like etoro because it uses the greed of newbees. Forex is no place to make quick buck. If you play with high leverages, believe me you suck big. There are many many points in forex trading to consider such as trends, fibos, indicators, news.. etc etc. However with etoro, newbees think they can make money easily without doing any homework. And they suck big time. Let me give u one example and you will see what I mean. One of my newbee friend opened an real account with etoro. He was trading even withouth using charts. he only checked the prices window where u can only see the rates goes up or down. Can u believe it? He lost all the money. Forex is no play and no gamble. It is as serious as a business or investing in stock. You need to be equipped with lots of knowledge and experience. To mee etoro looks like a big online casino. Avoid like pleague.

  15. optionrider  on August 21st, 2011

    I know a guy from North Vancouver, BC, Canada, who’s actually made a lot of money (over $27,000) and he couldn’t get his profits from them for months, and I even don’t know if he did, as I lost all contacts with him a few months ago. BTW, e-Toro is an Israeli-based, Cyprus-incorporated on-line gambling operation. They accept your credit card and take your money, but they run you through the hoops if you want to get back even your initial deposit. And I do agree: Forex is a serious business and you’d better know what you’re doing and start following global politics and economics, and have at least some basic knowledge of macroeconomics.

  16. Booog  on September 1st, 2011

    Hey people,

    After reading a few comments… I still don’t know whether is it safe to trade and how to trade.

    And there are so many online trading websites. Which should I trust? i really don’t know. (-_-)”

  17. Booog  on September 1st, 2011

    and how you guys know the server is from Israel?

  18. optionrider  on September 1st, 2011

    The IP address

  19. hulyo  on November 12th, 2011

    etoro is based in Israel. Good luck to get money back from them. They make it very difficult and frustrating.

  20. optionrider  on November 12th, 2011

    Do your homework before you come up with any money. Any trading is a SERIOUS BUSINESS. Only a tiny fraction of on-line Forex brokers are legitimate. Most are bucket-shops.

  21. kman  on November 22nd, 2011

    I have been reading all the comments here and I am a newbie but I would like to get into forex trading. Are there any sites where I can get good,usefull information,maybe some coaching videos ? also I see alot of people here appear not to like e-toro is there any site you would recommend in place of them ?

    I know it takes times and practice and you have to do your homework. so any advice ?

  22. optionrider  on November 22nd, 2011

    kman,here’s the link to the best of the best unless you live in the US. http://bit.ly/uxcTmD CHOOSE ONLY THOSE WHO ARE BANKS AND OFFER MAXIMUM LEVERAGE UP TO 100%, NO MORE (OTHERWISE GO TO THE NEAREST CASINO). MY SUGGESTION IS DUKASCOPY. If you live in the US, try to go to a bank-owned or reputable independent broker. I would suggest Interactive Brokers http://bit.ly/tJZdWd , but be prepared to deal with a very confusing accounting system and almost non-existent customer service during US stock market hours (long waiting time before you phone call is answered, but their customer service reps are very well-trained and almost always can adequately address your problems). They offer leverage up to 40% and have a decent trade execution platform.

  23. kman  on November 22nd, 2011

    Thanks option trader. I was looking at this site

    http://bit.ly/tJ5dke

    and their learning center. What about all these online trainig courses that cost like $500 to 5oo pounds or euros are there any legit ones that you know of and are they worth it ? I live outside the US by the way

  24. doujin  on December 17th, 2011

    Try this my friends.. https://www.exness.com/a/37099

    in etoro i lose 2k but here i won more than 7k already. with 100$ starting ^__^

  25. optionrider  on December 17th, 2011

    Would be cautious with Russian-based brokers.


Leave a Reply