Zulutrade VS eToro

The purpose of this article is to specifically compare the eToro vs ZuluTrade social trading networks, currently the most popular networks in terms of members. Before we continue we’d like to stress that we have no specific allegiance with either network and have similar amounts invested with eToro and with ZuluTrade. You can however also read our detailed eToro review and ZuluTrade review elsewhere on our website. For the purpose of this article we’ll break-down the comparison per section.

Sign-up Process

Both networks allow you to sign-up for a free demo account before you start investing with “real” money. The sign-up procedures are very straightforward and only once you decide to invest with real money are you required to provided a copy of your passport/id card and proof of residence. eToro acts as the broker as well, so once you’re signed up to their network your broker account is created as well. ZuluTrade also have their own integrated broker (AAAfx). However, ZuluTrade also allows you to use one of over 50 other brokers (click here to see the full ZuluTradebroker list). This means you can choose a broker based in your country and using your currency of preference. A limitation of eToro is that accounts can only be held in $USD.

Costs

Both eToro and ZuluTrade are totally free to join and none of these networks charge any account maintenance or success fees. The only cost with both networks is the broker spread when a trade gets executed in your live account. Because eToro acts as broker as well, that spread is pretty fixed. For EURUSD it’s about 2.5 to 3 pips. With ZuluTrade it varies a little more. If you use their own broker AAAfx it’s about 2 pips for EURUSD trades. If you use another broker, you may get better spreads, though you have to take into account the pip commission per trade the broker charges you for using ZuluTrade and hence you’ll end up at about 2 to 3 pips as well. If we also include the slippage per trade(i.e. difference between the price you get and the trader you follow got) at ZuluTrade (with eToro it’s negligible) we’d say that overall your total spread costs (and hence total costs) between both networks are very similar.

Performance

This is obviously the $1 million dollar question: “Which of the networks, eToro or ZuluTrade, will make me the most money?”. Unfortunately there’s no straightforward answer to this question as it very much depends on the quality of the traders you select to copy and the risk you’re willing to take.

With regards to the quality of the traders, both networks have some good traders which have been profitable over time as well as some rogue traders that lost 100% of their account value. View the latest ZuluTrade traders list and ranking here or find the current eToro ranked traders list here.

Overall with eToro we notice that the traders are more longer term traders. They have to start trading with their own money (though once they get copiers they can trade with the bonus money they get) and tend to leave positions open over a longer duration of time. Because the trades in your eToro account are executed proportionally and you can only invest 20% maximum per single trader, your total account gains and losses will normally be smaller than with ZuluTrade.

Because people can become traders on ZuluTrade using demo accounts and several use trading robots (which automatically execute trades) there tends to be a higher amount of risky traders on ZuluTrade. However the choice of traders is much higher and some also use “real money” accounts. Traders on ZuluTrade also only get their commissions paid in months they’re profitable, so their incentive is to be consistent. In addition, the amount you risk is ultimately up to you depending on how much you invest per trade. In theory you can double your account in 1 day, though you’re also as likely to lose that money in 1 day if that’s the risk you take.

With regards to performance, if you’re looking for exceptional results and are willing to take the risk associated with it then ZuluTrade would be the better network because they allow you to leverage your capital more and take more risk per trader. If you want a more managed approach which automatically limits the risk you can take then eToro would be the better solution.

Support

Both eToro and ZuluTrade offer web chat, e-mail and telephone support. eToro provides a bit more educational information on their website, including an active blog, though most of this is targeted at the people who trade themselves. eToro also provide dedicated account managers for customers who invest over $20,000.

Summary

It’s difficult to call one of these networks better than the other. As social trading networks go, both ZuluTrade and eToro are probably the most advanced and popular offerings on the market and each will appeal to certain investors. eToro is very much targeted at novice investors with an easy to use interface and network level risk management. It are however the simplicity and limitations of eToro in terms of trader research features and risk taking opportunities which will make ZuluTrade more appealing to the more experienced investors. The fact that eToro only manages accounts in $ USD may also make ZuluTrade more popular with people who want to invest in other currencies such as Euros, GB pounds, Australian dollars or Japanase Yen.

In any case, both social trading networks offer free demo accounts, so the easiest way to find out which one is more suitable for you is to try a 
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