Is eToro Good for Beginners?

Koody
Koody
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October 28, 2022
· 3 min read
Is eToro Good for Beginners?
Is eToro Good for Beginners?

Is eToro Good for Beginners?

Yes, eToro is good for beginners. eToro has a variety of instruments, trading opportunities and unique offerings that make it ideal for beginners.

Beginners can invest in more than 3,000 assets, including 0% commission stocks, ETFs, cryptocurrencies, crypto-trading pairs, indices, commodities, currencies and CFDs. It is crucial to highlight here that US ETFs are only available as CFDs to eToro UK customers.

Beginners can also choose from a variety of ways to invest, such as smart portfolios, social trading and copy trading.

Smart portfolios are a ready-made basket of investments and are ideal for those who do not want to deal with the hassle of choosing individual stocks and other assets.

Social trading enables over 20+ million users around the world to communicate and share thoughts, knowledge and ideas about the financial markets on the eToro platform.

CopyTrader allows beginners and other investors to copy the trades of top-performing traders on the eToro platform.

As always, please remember that when you invest money, your capital is at risk.

Click here to learn more about eToro UK.

Is eToro Safe for Beginners?

Yes, eToro is safe for beginners. eToro is as safe for beginners as any other regulated stock trading platform in the UK. It is authorised and regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA). Have a look at its permissions on the FCA register

The authorities put these regulations in place to protect everyday investors from investment scams and abuse. However, you should keep in mind that regardless of these regulations, all investments still carry an element of risk, and you could lose some or all the money you invest.

On eToro, your funds are kept secured in tier 1 banks, and all personal information is protected under SSL encryption. 

Your money is also protected by the Financial Services Compensation Scheme (FSCS) up to a maximum of £85,000. This means you might be able to get your money back from the FSCS up to £85,000 if eToro goes bust. Please note that the FSCS does not cover losses arising from the performance of any of your investments.

eToro does have some risky investment products, such as Contract for Difference (CFD), which are not ideal for beginner investors. eToro goes the extra mile to ensure that users can tell if the product they are about to trade is a CFD before committing to it.

eToro CFD trade screenshot
eToro's CFD trade notice

Beginners should be wary of CFDs and instead look to invest in the underlying assets of each investment they purchase. When you invest in the underlying stocks on eToro, for example, you do not pay a trading commission.

eToro Commission Free Notice
eToro's underlying asset trade notice

CFDs, on the other hand, are very risky trading instruments that involve taking a loan from the trading platform with just one click of a button.

If you must invest in CFDs, we are duty-bound to let you know that 79% of retail investors lose money when trading CFDs on eToro. You should consider whether you can afford to take the high risk of losing your money before going ahead.

Click here to learn more about trading on eToro UK.

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Koody is a financial services marketplace on a mission to help millennials make smart financial decisions. We provide the tools, support and education that millennials need to take control of their finances.
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