Is eToro still the best for copy trading?
Thanks to the rise of eToro, the art of social trading (aka copy trading) became one of the most popular investing methods used by both amateur and seasoned investors.
Copy trading is an investment technique that allows investors to observe the behaviors of other traders and duplicate their actions. The biggest benefit to copy trading is being able to invest with little to no knowledge of the market by finding high-performing traders. This is especially necessary when 98% of investor capital is still held in the traditional stock market because they are unfamiliar with the booming crypto market.
eToro may have popularized copy trading however, there were many limitations and controversies on eToro. In Jan 2021, eToro violated user agreement by closing their users’ leveraged positions during a high volatility market without informing users with sufficient time, despite users taking steps to prevent their positions from being closed. They faced another controversy again by enforcing a stop-loss on users who bought Gamestop ($GME) shares.
Because of these shortfalls with eToro and centralized control, Alpha Impact was born. We have presented a comparison of eToro, so you can what we did to improve user experience with copy trading.
eToro
eToro is the leading social trading platform that offers an array of tools to invest in the capital markets including a social trading feature. Founded in 2007 in Israel, users can create a portfolio with cryptocurrencies, stocks, commodities, ETFs, and more with no commission.
Pros
✅ Highly regulated broker (FCA, CySEC, CIF, MiFID, AFSL and ASIC)
✅ Provides multiple types of assets to trade
✅ User friendly
Cons
❌ Higher than average spreads
❌ High non-trading fees ($10/month inactivity fee, $5 withdrawal fee, conversion fees)
❌ Only 16 cryptocurrencies available for trading
❌ Only 1 base currency
❌ Custodial, invested funds are held in custody by platform
❌ Platform has reported lags during high volatility markets
❌ Bad reviews on customer support
❌ Required stop-loss mechanism
❌ No desktop platform
❌ Controversy around closing leveraged positions without informing users
❌ Controversy around one-sidely changing terms of service during GameStop ($GME) short squeeze which made many users lose money
Alpha Impact
Alpha Impact is a DeFi-enabled social trading platform that lets users retain funds in their exchange accounts. Traders can monetize their analytical skills, and investors can copy the best trades without intensive research and knowledge. Built by two banking veterans with experience in the crypto and traditional financial services industries, the founders’ philosophy is that investing in cryptocurrencies needs to become safer and better understood in order to gain mass adoption.
Pros
✅ Allow Options trading, margin trading, and spot trading*
✅ Highly vetted traders to copy
✅ Top 100 cryptocurrencies available for trading, a growing list of cryptocurrency assets available
✅ Proprietary risk management tools*
✅ Selective trade execution, user retains control
✅ Non-custodial, invested funds not removed from the exchange
✅ Executes trades from your exchange*
✅ Twitter integration
✅ Newsfeed for followers to get trader’s status updates and broadcasts
✅ #DeFi capabilities
✅ User friendly
✅ Specializes in Crypto copy trading
Cons
❌ No mobile app
❌ Not all features are available yet
- Some of these features are still in development.
