eToro Forex Trading Platform
199 Archbishop Makarios III Avenue
P.O. Box 50613
CY-3608 Limassol (Cyprus)
Phone: + 357 25 025046
Email - support@etoro.com
Website - www.etoro-forex.com
Overall Rating:3 of 4
Level: Beginner forex traders
Forex traders seeking a user-friendly trading experience or an educational tool to understand or introduce forex trading concepts will appreciate eToro’s simplicity and video game-like interface. U.S. based traders can practice their trading with “virtual money,” and practice trading on weekends when the forex market is closed. This is made possible by eToro’s database of historic forex prices, which is also used to drive “Back in time mode” trading competitions. Competitions run continuously with prizes of up to $10,000. eToro offers 24/7 live support as well.
Getting started: 4 of 4
Downloading and installing the platform is easy and takes just a couple minutes with a broadband Internet connection. System requirements are virtually irrelevant due to eToro's simplicity. Users are prompted to trade with either real money or practice money. Virtual money traders then register with an e-mail address. Live account trading is not yet available to U.S. based traders.
Basics: 4 of 4
The eToro platform runs on only one screen, half-sized, yet there's plenty of room for features and trading information. The upper portion of the screen features five buttons at the top, four of which are for the various trading modes, referred to as games, the fifth opens a trading log. The lower portion of the screen features current rates, a record of open trades and the trader’s account balance. A tutorial is available and you need Macromedia Flash Player to view it. eToro also includes a chat feature, allowing traders to exchange ideas, strategies and anything else in either public or private mode. It's an international community and the platform is available in multiple languages.
Features: 3 of 4
Three of the four eToro trading modes are conceptually similar. They are Globe Trader, Forex Match and Forex Marathon. Globe Trader mode consists of a plain flat map of the world, with the flags of various currencies’ countries. To place a trade, traders first select the currency pair that they would like to trade. Globe Trader, Forex Match and Forex Marathon all have a long-only trading orientation. Instead of dealing with currency pairs that must either be bought or sold, traders need only think in terms of the appreciation of one currency versus another and set up the currency pair accordingly. In the trading box at the bottom of the screen, the currency on the left is designated the “buy” currency and the currency on the right is designated the “against” (sell) currency. For example, a trader wishing to buy the euro versus the dollar would simply set the buy currency to the euro and the against currency to the dollar. But if the trader thinks that the euro will depreciate versus the dollar, instead of selling the EUR/USD (as they would on a traditional forex platform) they would change the “buy” currency to the dollar, the “against” currency to the euro and then execute the order as a purchase of the dollar versus the euro.
After setting up the currency pair, traders then select the size of the position on the “Open Trade” button and confirm the trade by clicking “OK” on the trade confirmation box.
Like Globe Trader, Forex Match and Forex Marathon also feature the long-only trading orientation and the same methods for selection of currency pairs and position size. But unlike Globe Trader, they use personification and action scenes to track trading positions. This highly unusual approach entails presenting various currencies symbolically on the screen as culturally appropriate characters compete against one another. The symbolic competition is presented as being between the trader and whomever is on the other side of their trade (though of course this is strictly symbolic, as the trading is anonymous). As a trader's position gains or loses in the market, the characters’ positions on the screen relative to one another advance and retreat as if the trade were a personal conflict. In Forex Match, the currencies are portrayed as faces and the competition is a tug-of-war set in an urban area. Forex Marathon consists of a foot race in an urban setting.
The fourth and final trading mode is Dollar Trend. This dollar-centric mode simply takes a position on whether the dollar will rise or fall in value relative to other currencies. To take a position, traders select what currencies they expect the dollar to move against and then select the size of their position. An interesting characteristic of Dollar Trend is the ability of traders to trade the dollar against not only individual currencies, but also baskets of currencies. So eToro has a spot forex answer to the U.S. dollar index futures contract. The Trading Log offers a detailed, yet uncluttered record of trades presented in a readable spreadsheet format.
Although beginner forex traders will appreciate eToro’s intuitive design and ease of use, advanced traders and those who use sophisticated analysis may be less than impressed with the platform’s simplicity and lack of analysis tools. While this is a legitimate grievance, those traders who find fault with eToro’s lack of sophisticated technical indicators should bear in mind that the forerunner of all modern technical analysis is tape reading, an art that requires nothing more than simple price data. So in a way, eToro provides traders with opportunities for technical study after all, giving them an online platform with which they can nostalgically practice old-school 19th-century market analysis in a modern and engaging video game-like setting. Nevertheless, the quaintness of roughing it isn’t for everyone. But for those traders who can do without a lot of bells and whistles, eToro may be a good fit.
Summary
Although eToro takes a very different approach to forex trading, it’s an alternative for traders who lack knowledge of forex and/or prefer a simpler trading platform, provided of course the traders are willing to accept the tradeoff of less sophistication.
David Twyford is a former member of the Mid-America Commodity Exchange and former commodity futures broker. He can be reached via his website: www.davidtwyford.com.
