This review will compare FXTM, a market leader in emerging and frontier markets, against eToro, a pure-play social trading broker. The former, owned by Mauritius-based Exinity Group, is home to over 3,000,000 traders from 180 countries, while Cyprus-based eToro claims above 11,000,000 accounts. Both brokers offer clients a secure trading environment, but FXTM maintains a superior trading platform versus the broader asset selection at eToro. From a cost perspective, FXTM takes the crown, while eToro remains one of the more expensive choices. The educational section offers significantly more value at FXTM. Over 80.0% of traders operate their portfolio at a loss at FXTM, whereas traders at eToro will fare better at 75.0%.
- Features and Platforms
- Available Markets
- Typical Spreads and Fees
- Security and Trust
- FXTM vs. eToro - Verdict
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Headquarters | Mauritius | Israel |
Regulators | CMA, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FCA, FSA |
Tier 1 Regulator(s)? | N/A | |
Owned by Public Company? | ||
Year Established | 2011 | 2007 |
Execution Type(s) | ECN/STP, Market Maker | Market Maker |
Minimum Deposit | $200 | $50 - $10,000 |
Negative Balance Protection | N/A | |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | Proprietary platform |
Average Trading Cost EUR/USD | 0.1 pips | N/A |
Average Trading Cost GBP/USD | 0.2 pips | 2.2 pips |
Average Trading Cost WTI Crude Oil | $0.09 | $0.05 |
Average Trading Cost Gold | $0.18 | $0.45 |
Retail Loss Rate | 77.00% | 74% |
Minimum Raw Spreads | 0.0 Pips | 0.8 pips |
Minimum Standard Spreads | 1.5 pips | 1.3 pips |
Minimum Commission for Forex | $0.80 - $4.00 per round lot | $0.00 |
Islamic Account | ||
Signals | ||
US Persons Accepted? | ||
Managed Accounts | ||
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Features and Platforms
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MT4 | ||
MT5 | ||
MT4/MT5 Add-Ons | ||
cTrader | ||
Proprietary Platform | ||
Automated Trading | ||
Social/Copy Trading | ||
DOM? | ||
Guaranteed Stop Loss | ||
Scalping | ||
Hedging | ||
One-Click Trading | ||
OCO Orders | ||
Interest on Margin | ||
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FXTM
Traders may choose between the MT4 and MT5 trading platforms, available as a desktop client, webtrader, and mobile version. With FXTM focused on emerging and frontier markets, where trading from mobile devices remains dominant, this broker developed its proprietary FXTM Trader. The MT4/MT5 trading environment receives an upgrade from six custom indicators and the FXTM Pivot Points Strategy tool, while free VPS hosting exists for qualifying traders.
High-frequency traders can lower the already competitive cost structure through the FXTM Loyalty Program. The educational section combines videos, written content, eBooks, and webinars into a valuable service for new traders due to its genuine approach to educating new clients. Adding another value-added service is in-house research, where a mix of videos and articles present trading ideas and market commentary.
eToro
CopyTrader and CopyPortfolios form the core at eToro, where traders may only trade on the proprietary trading platform, available as a webtrader and mobile version. The absence of the MT4 trading platform and support for automated trading solutions is notable, but pure social traders will benefit from a highly active community. Manual traders can navigate the extensive equity-focused asset selection with the assistance of third-party analytics provider TipRanks, where over 15,000 analysts cover markets.
The ProCharts charting package enhances the analytics capabilities at eToro, and qualified signal providers qualify for the Popular Investor Program. The program compensates qualified traders with up to 1.5% of allocated annual assets under management. In-house research and education play a secondary role, as evidenced by the lack of quality as compared to other well-established competitors. At eToro, the focus remains on the trading community, which is a primary asset at this broker. Besides trading CFDs, eToro also buys and holds certain physical assets for clients, and while commission-free trading exists, there are strict limitations to it.
Available Markets
Traders at FXTM can trade 63 currency pairs, eight commodities, four cryptocurrencies, 175 US and European equity CFDs, 11 index CFDs, and 347 US stocks for direct share dealing. eToro maintains 47 currency pairs, 13 commodities, 17 cryptocurrencies, over 2,000 equity CFDs, 13 index CFDs, and 145 ETFs. While FXTM grants a quality selection suitable for most traders, eToro provides significantly more trading opportunities.
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Currency Pairs | ||
Cryptocurrencies | ||
Commodities | ||
Crude Oil | ||
Gold | ||
Metals | ||
Equity Indices | ||
Stocks (non-CFDs) | ||
Bonds | ||
ETFs | ||
Options | ||
Futures | ||
Synthetics | ||
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Typical Spreads and Fees
FXTM deploys a hybrid market maker/ECN execution model. The former grants commission-free spreads of 1.3 pips in the Standard account, and 0.0 pips in the Pro account, for a minimum deposit of $25,000. The Pro account gives active traders a minimum spread of 0.1 pips for a commission between $4 and $20 per $1,000,000 in nominal trading value. eToro advertises commission-free trading, applicable to unleveraged buy positions only, but compensates with excessive mark-ups, typical for market makers, with the EUR/USD at 1.0 pips, and equity spreads significantly above competitors, plus a 0.9% commission charge.
Swap rates on leveraged overnight positions apply at both brokers. Equity and index CFDs are impacted by corporate actions such as dividends, splits, and mergers; both FXTM and eToro pass them on to affected portfolios. FXTM does not levy withdrawal costs versus a $5 flat fee at eToro, and third-party levies apply at both, dependent on the payment processor. Inactive accounts carry a $5 monthly charge at FXTM, while eToro has it set at $10. eToro additionally maintains a currency conversion fee. The cost structure at FXTM is significantly more trader-friendly, having a direct positive impact on trading strategies.
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Average Trading Cost EUR/USD | 0.1 pips | N/A |
Average Trading Cost GBP/USD | 0.2 pips | 2.2 pips |
Average Trading Cost WTI Crude Oil | $0.09 | $0.05 |
Average Trading Cost Gold | $0.18 | $0.45 |
Average Trading Cost Bitcoin | N/A | $574 |
Minimum Raw Spreads | 0.0 Pips | 0.8 pips |
Minimum Standard Spreads | 1.5 pips | 1.3 pips |
Minimum Commission for Forex | $0.80 - $4.00 per round lot | $0.00 |
Deposit Fee | ||
Withdrawal Fee | ||
Inactivity Fee | $5 monthly after 6 months | $10 monthly after 12 monthd |
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Security and Trust
FXTM owner Exinity Limited operates out of Mauritius under the oversight of the Financial Services Commission (FSC), and all international clients will trade from there. Expanding the security framework is the membership with the Hong Kong-based Financial Commission which provides dispute protection of up to €20,000 per case, on par with EU-regulated brokers. It also holds a license with the Financial Sector Conduct Authority (FSCA) of South Africa. ForexTime UK Limited and ForexTime Limited cater to UK and EEA traders, respectively, under the authorization of the Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC). UK portfolios offer maximum protection of £85,000 from the Financial Services Compensation Scheme (FSCS), and the Cypriot Investor Compensation Fund (CIF) grants €20,000. Overall, FXTM maintains a spotless regulatory record.
The Cyprus Securities and Exchange Commission (CySEC), the UK Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC) comprise the eToro regulatory framework. As such, most international traders will operate under the uncompetitive framework outlined by MiFID II and enforced by the European Securities and Markets Authority (ESMA). eToro also expanded its cryptocurrency operations into the US, where it maintains registration as a Money Services Business with the Financial Crimes Enforcement Network (FinCEN).
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Country of the Regulator | Cyprus, Kenya, Mauritius, United Kingdom, South Africa | Australia, Cyprus, Seychelles, United Kingdom |
Name of the Regulator | CMA, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FCA, FSA |
Regulatory License Number | 185/12, 777911, C113012295, 135, 46614 | 491139, 109/10, 583263, SD076 |
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FXTM Vs. eToro – Verdict
FXTM is one of the best-known and most-respected brokers in the industry; it established itself as an expert for emerging and frontier markets. It maintains a high degree of transparency, exceptional execution statistics, and a very competitive pricing environment in its ECN accounts. Research and education complement the core trading environment, where a maximum leverage of 1:2000 appeals to all types of traders. eToro focuses on social trading and its community, where pure social traders, who can ignore elevated costs, will find a suitable offer. The asset selection is excellent, but the absence of the MT4 trading platform and support for automated trading solutions is notable. Despite the smaller asset selection, most traders will determine the overall trading environment at FXTM to be significantly more competitive.
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