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Is eToro Good for Day Trading - Let's Find Out

Updated: Apr 30

The author Slavica Grabovac of the article:" Is eToro Good for Day Trading - Let's Find Out".

Publication date: 26.10.2023

This post may contain affiliate links, which means I may receive a small commission, at no cost to you, if you make a purchase through a link

Day trading involves the rapid buying and selling of securities, often occurring within a single day or even seconds. The Financial Industry Regulatory Authority (FINRA) characterizes a day trade as buying and selling (or vice versa) the same security (such as a stock or ETF) within the same trading day. This practice is prevalent in stock markets and the foreign exchange (forex) market, where currency trading occurs.

What's more, eToro is an online multi-asset platform that gives traders and investors access to more than 3,000 different financial assets. These include stocks, cryptocurrencies, ETFs, indices, currencies and commodities.

 eToro: an online multi-asset platform

1. Is day trading possible on eToro?

Yes, eToro allows day trading, and many traders use the platform for this purpose. A day trader is any customer who executes 4 or more security day trades within 5 consecutive business days.

At eToro, they have put rules to prevent pattern day trading. In the app, when you make the third day trade, they let you know that you’re hitting your limit for that 5-day period. If you make a fourth day trade too soon, you won't be able to do most trades until the next day.

2. Pattern Day Trading and eToro app

A Pattern Day Trading (PDT) account is one that has executed more than 3 day trades in a rolling 5 business day period. To continue day trading in a PDT account, it must start the trading day with a value of $25,000 or higher.

If a PDT account day trades with less than $25,000, it incurs a 90-day trading restriction. To avoid this violation, you have several options. Such as new positions overnight, converting the account to a cash account, or maintaining a minimum account value of $25,000 for day trading.

3. Is eToro good for beginners?

eToro is a user-friendly platform, perfect for those new to day trading. Copy trading, a unique feature, allows beginners to mimic expert strategies effortlessly. Apart from that, the platform's low minimum deposit makes it accessible to traders with various budget sizes (especially for beginners with a low budget).

4. eToro fees

There are 5 types of fees on eToro:

  • Conversion fee: apply to non-USD deposits and withdrawals.

  • Spread: variance between the purchase and sale prices of a specific asset.

  • Overnight fee: also called rollover fee and refers to the payment for holding a CFD position overnight.

  • Withdrawal fee: A $5 USD fee applies to all withdrawal requests.

  • Inactivity fee: Imposed after 12 months without login activity.

eToro offers comparatively affordable trading fees in contrast to those of its rivals. However, users need to be careful because of currency conversion and withdrawal charges.

eToro fees

source: BrookerChoser, Gyula Lencsés

Is eToro Good for Day Trading?

Regarding all of the above, we can say that eToro is a good platform for day trading. In particular, it is an established platform regulated in numerous jurisdictions with implemented “responsible trading policy”. eToro’s unique blend of tools like copy trading, wide asset range including crypto trading, and a user-friendly mobile app makes it a popular choice for many traders.

On the other hand, this platform benefits mostly US citizens because stock, ETF, and cryptocurrency trading are available only in 47 U.S. states. What’s more, fees may differ depending on customers location.

Before diving in, consider your trading style and goals. Ultimately, the suitability of eToro for day trading depends on your individual needs.

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