eToro is a relatively young trading platform that focuses on cryptocurrency exchange as well as a feature known as “social trading.”
The Financial Conduct Authority (FCA) regulates eToro, an Israeli-based brokerage firm best known for its cryptocurrency trading platform.
Its interface was originally designed to manage currency exchange, but it has lately been retooled to manage the dangerous market of cryptocurrency trading.
However, we should probably include this risk warning: cryptocurrency trading is exceedingly dangerous.
In fact, when trading CFDs on eToro, around 75% of investor accounts lose money. As a result, eToro is definitely a better alternative for those who have some prior experience with currency markets and are familiar with cryptocurrencies.
Stocks, commodities, and other derivative assets such as contracts and discrepancies are also available to UK investors.
eToro Overview
The key aspect of eToro is its “social trading” functionality. This function allows you to effectively imitate the market moves of the platform’s most highly rated traders.
You can find highly rated traders with a track record of good results and mimic their portfolio spreads in order to profit from their knowledge.
The tool allows you to make real-time adjustments to your investment strategy.
Keep in mind that eToro is presently only permitted to do bitcoin trading in the United States. They do expect to diversify their asset portfolio in other locations by the end of the year or early next year.
If you live in the United Kingdom, you can trade stocks, commodities, FX, CFDs, indices, ETFs, and cryptocurrencies among nine asset classes.
eToro also provides a cool virtual trading option that allows you to open a trial account and try out the platform before committing to real money trading. The demo account is a practise account that allows you to familiarise yourself with the site.
With its emphasis on crypto and social trading, eToro has a distinct focus. They recently released crypto wallets that allow you to buy/sell cryptos, convert them, and use them to pay for goods and services just like a conventional wallet.
Overview of Trading 212
Trading 212 is a trading platform based in London that attempts to make trading more accessible to the general public.
Trading 212 is created for beginners to help them have a better understanding of the investing world and gain experience.
The firm was created in 2006 and offers forex, currencies, gold, commodities, cryptos, stocks, and other asset classes such as bonds and ETFs for trading. Trading212 was granted a UK licence in 2013 and is regulated by the Financial Conduct Authority (FCA).
Trading 212 features a lot of unusual asset classes compared to many other trading platforms for novices. Whereas most novice platforms focus solely on stocks and ETFs, Trading 212 offers access to a wider range of assets, including commodities and currencies.
Selections from the world’s most popular exchanges, including the NYSE, NASDAQ, Euronext, and London Stock Exchange, are among its trading assets. Trading 212 offers over 4,000 commission-free stocks and ETFs, as well as fractional asset trading.
Trading 212 offers tax-advantaged accounts such as ISAs and tax-free trading up to a specific amount for UK investors. You can even have your dividends reinvested automatically.
Trading 212’s UI is one of its outstanding characteristics.
You can acquire a thorough overview of an asset’s trading and return history by clicking on the listing while searching for it. If you want a more sophisticated perspective, you can superimpose technical indicators like moving averages and the like.
On the right-hand side of the trading wizard is a valuable column full of information films and tips about investing.
If you’re still not persuaded, you may open a Trading 212 demo account to get a feel for the platform.
Trading 212’s demo account, like eToro’s, is essentially a simulation in which you play with fictitious currency to see how your investments would have fared. When it comes to trading, all you need is £1 to get started.
Trading212 also provides a large library of educational resources focusing on investing themes if you want to learn a little more about it.
You may read articles and view films on a variety of topics, as well as get a more in-depth look at entire industries or sectors.
eToro vs Trading212
Ease of Use
Trading212 completely outperforms eToro when it comes to ease of use.
After all, Trading212 is supposed to be very beginner-friendly, whereas eToro focuses on a certain niche that only experienced investors should dive headfirst into.
Trading212 stands out because of its incredibly user-friendly layout and abundance of information.
Every stock listing has a module that displays detailed historical data and market movements over the asset’s entire historical chronology, and you can use simple technical indicators to gain more information.
You can also check through the app’s instructional tools if you get confused or need to brush up on your investing principles.
That isn’t to argue that the eToro app isn’t user-friendly; just the contrary. For what it does, eToro has a fantastic app interface.
It’s just that, from a layman’s standpoint, most consumers will be able to pick up and run with Trading212’s software far faster than they will with eToro.
eToro is all about crypto trading and crypto CFDs, both of which are notoriously difficult financial vehicles.
Investments that are available
Both platforms appear to be equally matched in terms of the kind of assets that can be traded.
eToro is primarily focused on cryptocurrency investing, but it also offers a wide range of other asset classes in which you can trade commission-free (at least if you live in the United Kingdom). For the time being, US investors can only invest in cryptocurrency.
Trading212 defies the trend by offering a beginner-friendly platform with a diverse choice of so-called “unconventional” assets such as commodities and currency, which are typically not available on beginner-friendly platforms.
Trading212, on the other hand, takes the cake when it comes to the sheer amount of assets offered.
It offers approximately 4,000 stocks and ETFs that are traded on some of the world’s most prestigious exchanges. eToro, on the other hand, only has equities from roughly 250 global firms and funds from roughly 10 indices available.
This isn’t inherently a negative aspect of eToro because it is built for a very specific purpose: crypto investing and copy trading.
Trading212, on the other hand, should be your primary pick if you want to have as many investing options as possible.
Charges
Both eToro (see our complete review) and Trading212 provide commission-free trades on equities and ETFs. However, eToro imposes a “spread fee” on crypto trades, which essentially equates to an additional capital gains tax when everything is added together.
eToro also charges “overnight” costs for cryptos held in leverage, which works out to be a form of interest.
To get started, eToro also requires a £200 minimum deposit, but Trading212 allows you to get started with as little as £1.
Trading212 does not impose any fees for trading, withdrawals, or deposits. Currency conversion fees do apply to CFD accounts, though.
Finally, there are some expenses associated with commodity and indices margin requirements. They do not, however, charge any trading fees or inactivity penalties for ISAs. If your account has been dormant for four months, eToro levies a £10 per month inactivity fee.
So, when it comes to which platform offers the lowest fees, Trading212 comes out on top.
Regular day trades are commission-free, and there are no inactivity costs, as well as no fees on crypto trades, making the platform a wonderful asset (pun intended).
Encouragement and Education
Both eToro and Trading212 have a big library of trading and investment videos and articles.
Even better, you can browse the materials even if you don’t have a trading account with either site.
Trading212, on the other hand, provides access to a trading forum where you can engage with the community, ask questions, and receive investment advice. eToro does not appear to offer any comparable features.
More videos, webinars, and trading tutorials are available at Trading212 to assist you in developing a trading strategy.
In many ways, this is unsurprising because Trading212 is meant for newcomers who want to dip their toes into the market.
So, if you’re a seasoned investor, an instructional library probably isn’t at the top of your list of desired features.
Customer support is said to be excellent at both eToro and Trading212. One constant feature in both platforms’ testimonials is how friendly and competent the customer service people are.
It’s comforting to know that regardless of the platform you choose, you’ll have access to a knowledgeable and experienced support team.
So, which platform do we recommend: eToro or Trading 212?
It depends on what you’re looking for in a trading platform, but if all other factors are equal, we’d recommend Trading212.
Trading212 simply has a broader appeal and would be a better fit for the majority of those interested in investing. We like the site because of its simple layouts, abundant information, low minimum deposit, and unexpected diversity of asset classes and portfolio allocations.
That isn’t to argue that eToro is a horrible platform; it’s just that it may be too limiting and sophisticated for the typical investor to get started.
eToro’s key drawbacks are its complicated fee structure, limited investing options, and high risk profile.
As we previously stated, almost 75% of investor accounts on eToro lose money when trading CFDs. Even for a platform that specialised in crypto trading, there is a significant margin of loss.
So, unless you’re willing to take a big risk, we recommend staying away from eToro.
Final Thoughts
In today’s world, there are a plethora of online investing platforms to choose from, and it can be difficult to figure out which one is right for you.
If you’re a new investor, you should seek a platform that simplifies some of the more complicated aspects of investing, such as fee structures and transaction execution.
When it comes to eToro versus Trading212, both platforms have their benefits and drawbacks, but Trading212 is definitely the better option for the ordinary investor.