I wrote a six month review of my trading journey previously. In it, I wrote about when and how I started trading on the stock market. I touched on eToro in the previous review, but it was a brief section because at that point, I had only been using eToro for a few months (Freetrade was the main platform I was using at the time).
This review focuses on my experience of trading on eToro since I decided to make it my main platform for both my own trading and teaching on my free 30 Day Trading Programme.
I signed up with eToro on the 22nd of August 2020. The date of writing this article is 22nd of February 2021- exactly six months after opening my account.
So, how has it gone?
What has my experience of the platform been like?
I initially felt quite intimidated by the eToro platform. There were flashes of red and green on the screen, which changed colours every few seconds (to indicate the price of a security (stocks, ETFs, cryptocurrency, etc.) going down or up). This gave the feeling of needing to execute trades with urgency, and truth to be told, it felt quite stressful.
Now, I don’t even notice the changing of the colours. I suppose it’s a bit like a big billboard outside your house. You’ll notice it the first day, but a few days later, you won’t even lift up your head to see what’s on the billboard.
The terminology was also different. Whereas Freetrade would use obvious terms like ‘buy’ and ‘sell’, eToro uses ‘open’ and close’. There were also words like ‘leverage’ and ‘CFD’, which was confusing at the beginning.
As a non-US customer, I also had to grapple with buying everything in dollars. So even though I’m based in the UK, when I bought UK stocks it’d still be executed in dollars.
eToro makes some seriously good tools available to investors, but I’ve not really used them much. The main tools I need are ones that tell me what the debt:equity ratio is for a company I am interested in and how much impermissible income a company may be dealing with. eToro does not provide this information at a glance, so I stick to the tried and tested tools I’ve always used. Beyond this, it’s a matter of researching the stock and for that I stick to Google and other sources of information.
Also, the UX (or user experience) is not seamless between the desktop version of eToro and the mobile version. The mobile version tries to offer pretty much everything the desktop version tries to offer, and understandably, it can feel overwhelming. But it’s good to have both a mobile and desktop version available.
There were also times where the eToro system wouldn’t let me login, but this was rare and in hindsight, only occurred during peak traffic.
Those were some of the things that required getting used to, but within a couple of weeks, I’d say I was quite fluent on the platform.
After getting used to the basic buying and selling functions, I started using other more advanced functions, such as setting an ‘order’ to execute trades. In everyday language, this simply means you tell eToro the price you’re happy to buy shares at, and when that price is reached the platform will automatically buy the shares for you. If the desired price isn’t reached, then nothing happens. This is great for a trader like me: someone looking to supplement their income without being glued to the screen all day. These types of more advanced functions were all-the-more appreciated considering Freetrade didn’t offer this functionality at all whilst I was most actively trading on their platform.
Another lovely tool I found on eToro was the statement facility. It’s possible to generate a statement for your desired date range. In case this doesn’t seem like a big deal, consider this: imagine being able to enter the date when you last paid your zakat and when your zakat is next due (i.e. one lunar year), wouldn’t that make your zakat calculations easier?
Some investors also like to copy professional traders, and the eToro service allows that. I haven’t signed up to become an approved eToro trader, but even then, eToro allows a small number of investors to copy my trades. I was pleasantly surprised to see that people had allocated more than $20,000 to copy my trades. Beyond this amount, a trader has to sign up with eToro as an approved trader, and follow strict rules aimed at minimising risk to ‘copiers’. This is currently incompatible with my trading strategy so I have not signed up to be considered as an approved trader (known as a ‘popular investor’ on eToro).
But the best thing has to be that eToro takes out the guesswork of how much a share might be purchased or sold for. You pay the price displayed on the screen – which is closer to what the more traditional platforms offer (though they hold the price for 15 seconds, which is better than how both Freetrade and eToro does it).
Overall, as a platform, it’s so much more sophisticated than Freetrade and I’m glad I invested the time to understand how it works.
There are many more features I could talk about – both good and bad, but I suspect what you really want to know is how much I’ve made…
What are the results?
So in my last six month trading update, I reported that my main trading platform was Freetrade and I managed an ROI of 53% on Freetrade. At the time, I was chuffed with that.
Well, I’ve only gone and done it again. I’ve surprised myself again. I’ve managed to beat my previous ROI on Freetrade. On the eToro platform, I’ve achieved an ROI of 68.89% in six months. Alhamdulillah.
If I can maintain this sort of ROI, then by the time the year is finished, my ROI will be around 138%.
I was receiving around 7% ROI on my property investments, which I was quite happy with. I’ve also invested in some other opportunities, and again, the ROI was around the 7% return mark. So anything over 10% would have been good for me before I started this trading journey.
Final thoughts
I could make the mistake of thinking that I’m some kind of amazing trader. But there are two reasons why I don’t make this mistake:
1) Our rizq is from Allah
2) I am doing something that anyone else could easily do. It just requires some time and effort…just like every endeavour in life.
On the point of rizq…the word 'rizq' is mentioned 123 times in the Quran and most of which essentially addresses how it comes from Allah the Exalted. It is He who determines what a person will obtain in this life. It is Allah who gives us happiness and Allah who sets the events for sadness. He is Allah Ar-Raziq and Ar-Razzaq, The Provider. This is described by Allah Himself in the Quran:
إِنَّ اللَّهَ هُوَ الرَّزَّاقُ ذُو الْقُوَّةِ الْمَتِينُ
“Indeed, it is Allah who is the (continual) Provider, the firm possessor of strength.”
(Surah Adh-Dhariyat, 51:58)
وَإِنَّ اللَّهَ لَهُوَ خَيْرُ الرَّازِقِينَ
And indeed, it is Allah who is the best of providers
(Surah Al-Hajj, 22:58)
The word ‘Razzaq’ is a hyperbolic or active expression of the word ‘Raziq’. Both words literally mean ‘The Provider’ but the former signifies a more profound meaning in the abundance of rizq that Allah provides His creation with and how His rizq reaches anybody and everybody it has been written for.
Ustaz Muhammad Luqman Hakim Bin Roslan explains rizq beautifully:
Allah has commanded for every capable individual to put in the right effort in search of provision despite it being pre-determined for everyone. This is also reflected in the way Allah has created birds and animals, their way of life, to survive and to procreate. The Prophet s.a.w. mentioned in a hadith:
لَوْ أَنَّكُمْ كُنْتُمْ تَوَكَّلُونَ عَلَى اللَّهِ حَقَّ تَوَكُّلِهِ لَرُزِقْتُمْ كَمَا يُرْزَقُ الطَّيْرُ تَغْدُو خِمَاصًا وَتَرُوحُ بِطَانًا
“If you were to rely upon Allah with the reliance He is due, you would be given provision like the birds. It goes forth hungry in the morning and returns with a full belly at dusk.”
(Sunan At-Tirmizi)
If you’d like to learn more about how to trade on the stock market, then my free 30 Day Trading Programme could be for you. In it, you’ll learn about the Islamic Principles of Investing, Basics of the Stock Market and Trading Online (using a trading platform).
Also, if yo're thinking of signing up to eToro, Please consider using our referral link. It'll help us keep the service free to use. In addition to website costs, we also absorb course costs (including sending books out, etc.) for which we do not ask any students to pay anything towards.
Risk warning:
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. eToro (UK) Ltd. is authorised and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.
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