A Beginner's Guide To Investing With Etoro

Investing in stocks can be a daunting prospect for beginners, but eToro offers an intuitive and easy-to-use platform to help you get started. Before you begin, it's important to understand what the stock market is and how it works. Stocks are a type of security that gives holders a share of ownership in a company, and they are traded on stock exchanges such as the New York Stock Exchange, the NASDAQ, the London Stock Exchange, and the Australian Securities Exchange. These organisations have rules and regulations in place to ensure the market operates efficiently and fairly.

To invest in stocks on eToro, you'll first need to open an account, which can be done quickly using your smartphone and sign-in management from Apple, Facebook, or Google. You'll then need to verify your identity, choose your funding method, and start investing. eToro offers several unique features to support your investing journey, including CopyTrader, which allows you to follow and copy more experienced investors, and a virtual account to practice with before you risk your own funds.

Opening an eToro account

To open an eToro account, you can use your smartphone and sign in through Apple, Facebook, or Google. Alternatively, you can sign up through the eToro website. Either way, you will need to provide personal and financial information, including:

• Your government-issued ID or passport number
• Your bank account information
• Your preferred frequency of trading
• Your professional status
• Your level of knowledge of capital markets
• Your financial liquidity
• Your acceptable levels of risk
• Your investment goals

You will also need to verify your identity with two-factor authentication and confirm your residence with a utility bill from the last three months.

The whole process is relatively quick and straightforward, but it is important to carefully review the Terms & Conditions and privacy policy before submitting your information.

Account verification

To verify your account, you will need to upload proof of identity (POI) and proof of address (POA). Your POI can be a valid (unexpired) US passport, driver's license, or state ID. The document must clearly show your full name, date of birth, a clear photograph, issue date, and expiry date.

Your POA document should contain your full name, address, and issue date (no older than 3 months). The name or logo of the issuer should also be clearly visible. This can be a credit card statement, utility bill, house rental agreement, letter from your employer, or a letter from your local municipality.

You can use the eToro app to upload your documents directly to the platform. The verification process may take up to several days, and you will be notified once it is complete. You can also check your verification status on the platform, as verified accounts will have a green checkmark next to the username on the user's profile.

In the event that your documents are rejected, eToro will send an email explaining what you need to provide.

Making your first deposit

To make your first deposit, you will first need to register for an account. This can be done quickly with the help of your smartphone and sign-in management from Apple, Facebook, or Google. Once you’ve verified your identity with two-factor authentication, you can log in to the platform. You will still need to verify your account through email or text before funding the account.

Copy other traders and investors

To get started, you can use the Copy Discover page to search for the kind of investor you want to copy. Once you've found an investor you like, you can allocate how much money you want to copy them with, and then click "Copy". This will duplicate their positions automatically in real time and in direct proportion. For example, if a copier allocates $1,000 to copy a trader and the trader uses 10% of their balance to buy a particular stock, a $100 purchase of that stock will be made in the copier's account automatically.

You can start or stop copying a user at any time, and you may also set a stop loss for the copy, add or remove funds, or pause the copy. Trades are typically executed in less than a second from the instant the copied trader executes their own trades.

There is no additional charge for copying another trader or traders. You will still be charged spreads on the trading and/or transaction fees where applicable. The minimum amount required to copy a trader is $200, and there is a minimum amount for each copied position of $1.

It's important to note that copy trading does not amount to investment advice, and the value of your investments may go up or down. Your capital is at risk.

Start trading or investing manually

Once you are comfortable with the platform and have gained sufficient knowledge about the financial instruments you want to invest in, you can start trading or investing manually on eToro. Here are the steps to follow:

Step 1: Sign up for an eToro account

The first step is to sign up for an eToro account, which only takes a few minutes. You can expedite the process by having your personal and financial information ready. Personal information includes your name, date of birth, address, and phone number. For financial information, you will need to provide your preferred frequency of trading and bank account information.

Step 2: Verify your identity

Verification is a crucial step to ensure the safety of your account. eToro will try to verify your identity via text message to your smartphone. After this, you can complete questionnaires about your trading knowledge, purpose for trading, and risk tolerance.

Step 3: Fund your account

Once your account is verified, you can add money by linking a bank account. The fastest way to do this is by using the Plaid service for secure bank transfers. The minimum deposit is as low as $10 in the US and UK, while other countries may require a minimum of $50.

Step 4: Research and select investments

EToro offers a wide range of investment options, including stocks, options, CFDs, and cryptocurrencies. The platform provides resources such as price charts, company stats, analyst ratings, and a social media feed to help you research and make informed investment decisions.

Step 5: Start investing

After selecting the "Trade" button, a dialog box will appear where you can specify the details of your trade, including trade size, use of leverage, stop loss, and take profit orders. Carefully review each option before initiating the trade. You can also use the CopyTrader feature to allocate funds to follow and duplicate the trades of another trader.

Frequently asked questions