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Trading with eToro #FinanceFriday

I’ve been trading with eToro for the past few months and I’m very aware that over 70% of investors lose money trading CFDs (contracts for difference). I started making a small profit, in dollar terms yesterday but I’m still making a loss when I take into account the exchange rate. Trading with eToro isn’t a ‘get rich quick’ scheme. It is interesting and I do get live stock  and commodity prices. My investment is modest and so I’m only trading stocks at the moment. I bought Microsoft this week and so far I’m in profit. Of course, it costs money to trade and the costs are hard to assess. Unlike other trading platforms that charge a fee, eToro is commission-free but you lose money on the spread between the buy and sell prices. eToro only shows one price which I think is the mid-price.

trading with eToro

The Spreads

At the time of writing the price quoted for Microsoft is 223.29. I tried to sell and was quoted 223.24 and to buy 223.45. Those prices are of course, in USD. Those spreads are lower than I’m used to on the London Stock market and there is no commission to pay. I do find it better to check my portfolio using my phone and the eToro app because I can see if individual stocks are gaining or losing on the day, that isn’t shown if I access their website using my laptop.

Follow other traders

eToro allows you to follow other traders who might be more experienced and even match their investments. They might be more expert or they might not be! My portfolio at the moment is one I put together during this pandemic and so takes into account the high risks associated with certain sectors of both the UK and US economies.

Stocks

The stocks that I’m invested in so far, which are actually CFDs are Microsoft, Amazon, Nvidia and AMD which I think will soon benefit from some stimulus in the US. The UK stocks are Astrazeneca, Barclay’s, GlaxoSmithKline, HSBC (HSBA.L), Land Securities (LAND.L), Standard Chartered (STAN.L), Unilever and Polymetal International. It is a portfolio that relies heavily on both economies recovering after the pandemic is over. I’ve avoided the leisure sector and airlines. Other companies you might consider are the food manufacturers and retailers. My shares in Premier Foods are still doing well.

Portfolio

My portfolio held in a more traditional way through a share dealing account with the Halifax is looking healthier now with only two holdings in the AIM market. Solo Oil did a name change and is now known as Scirocco Energy. I think their reorganisation might come good eventually. The same sentiment applies to Immupharma which needs a little luck too. I have to wait and see what happens with the UK economy to see if the rest of my portfolio makes me some money. The bright spots at the moment are Premier Foods and Barclays is giving me a return too.

Trading with eToro

Trading with eToro is quite easy but please do not leverage because that can lose you a lot of money! Remember that over 70% of investors lose money investing in CFDs. You really need to learn fast and be very cautious. Remember too that I only write about my personal experiences, I don’t give advice! Investors are fearful at the moment so there are opportunities but also pitfalls.

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