Etoros' costs

w00519772

I am thinking about buying some bitcoin. I understand the risks and I am going to use the little money I have left at the end of the month. I have plenty savings as well, so I am not using all of my savings to bet on bitcoin. I just want to invest a very small amount to understand the mechanics of it.

I am trying to understand Etoros' fees as described here: https://www.etoro.com/en/customer-service/fees/. Coinbases' costs seem to be much simpler to understand.

To help me understand Etoros fees. Say I had £250 to buy today and I sold for £250 this time next week. What would the costs be and when would they be payable?

Also what is a pip? I understand it to be 0.001p but I could be wrong.

w00519772

Does anyone know if Etoro allow you to open account without a deposit initially? I would like to use the Virtual Protfolio facility initially to see how it works. Do you have to make a deposit.

Also do they support GBP accounts or are all their trading accounts in dollars?

Are there any inactivity fees?

jimjames

search etoro on here, previous threads and it may not be what it seems

Malthusian

I saw a post recently - can't remember where now - from someone who had made lots of pretend money investing in Bitcoin on [STRIKE]Etoro's virtual trader[/STRIKE]*, then deposited some real money and found it was almost impossible to speculate on Bitcoin because of the margin required, or something like that. They withdrew all their money, luckily for them, which meant they only lost about £15 in fees.

Virtual accounts or demo accounts, whether in CFDs, online poker or binary options, are a con. What happens is one of two things:

1) If the platform is genuine: either the investor's demo account will go up, or it will go down and then go up. As soon as the punter has a pretend profit, they think "wow, if I'd done this with real money, I'd've just made £100" (or whatever). At this point they invest real money.

The sensible thing to do at this point would be to keep using the demo account for, say, a year, and seeing if they can consistently replicate this success. But if they were sensible they wouldn't be experimenting with gambling on short-term market movements in the first place, and their brain is telling them that the longer they play with pretend money, the more gains they'll miss out on. (A year is still not enough, but no-one is going to play with lines on a graph for a full economic cycle, it's boring.)

So as soon as they see a pretend profit they invest real money. At this point the laws of economic physics take over, and although in the short term they might make further gains, in the long term all gamblers lose their shirt. The expected return of any trade is nil minus trading costs, and eventually trading costs and poor choices will reduce their pot towards zero until they cut their losses.

2) If the platform is a scam: The demo account will show fake trades that always go up. When the investor invests real money, they get switched onto fake trades that always go down. What is happening on the screen is immaterial because the money is already gone.

Both scenarios have the same outcome, the only difference is time and the ability of investors on genuine platforms to cut their losses.

Poker players will tell you that gambling with real money is totally different psychologically to gambling with matchsticks. They are of course right. However psychology is not the reason that people make money with demo accounts and lose money with real accounts. The real reason is simply because almost everyone will see a profit from short-term trading at some point. Imagine picking a random point on a sine wave and then following it. Either you go up, or you go down and then up. At whichever point you go up, you have pretend gains and you feel compelled to invest real money to turn that pretend money into real money.

Only a small minority will be so unlucky with their demo account they just lose and lose and lose (and of course if the platform account is a scam, there is zero chance of the demo account losing).

* *edit* Found it - it was Trading212, not eToro.

w00519772

Thanks. I have read a lot of reviews, which describe the customer service as shocking. I am specifically asking if it is possible to use the virtual portfolio to learn more about investing i.e. without:

1) Inactivity fees
2) Initial investment required

Is it possible to use Etoro without using any real money at all i.e. no initial investment at all.

Please don't reply explaining the high risk as I already understand.

Malthusian

Why not just pretend to buy and sell shares in an Excel spreadsheet and track them that way?

There are dozens of virtual portfolio services on offer (Morningstar, Citywire, the London Stock Exchange, etc etc - I can't recommend any in particular as I have no direct experience). If you can't work out whether you'd have to pay for one or not, then that is automatically reason enough to cross it off the list. Just move on to one of the free ones.

w00519772

Malthusian wrote: »

Why not just pretend to buy and sell shares in an Excel spreadsheet and track them that way?

There are dozens of virtual portfolio services on offer (Morningstar, Citywire, the London Stock Exchange, etc etc - I can't recommend any in particular as I have no direct experience). If you can't work out whether you'd have to pay for one or not, then that is automatically reason enough to cross it off the list. Just move on to one of the free ones.

+1 for "If you can't work out whether you'd have to pay for one or not, then that is automatically reason enough to cross it off the list and also for the alternatives."

w00519772

Say I wanted to monitor my pension funds using Google Finance. I need the symbols of my pension funds in order to do this, however I cannot find them. For example, what is the symbol of this fund? http://factsheets.financialexpress.net/frle/ADD9.PDF How did you find it?

Is it not searchable because it is a private Aviva fund?

Malthusian

Google Finance is very bad at unit trusts and life/pension funds. Most either aren't listed or don't provide price data. Try Morningstar or Trustnet.

w00519772

Malthusian wrote: »

Google Finance is very bad at unit trusts and life/pension funds. Most either aren't listed or don't provide price data. Try Morningstar or Trustnet.

Thanks. I will. How do I find the symbol of a fund? See the example code from my last post.

w00519772

Are there any others? They both seem to be very difficult to use. I have just spent four hours trying to enter funds (12) into Morning Star and I have lost them all now.

It is probably a days work to get them all in. Are there any sites that allow you to monitor fund performance by company e.g. Aviva etc.