What Is the Difference Between Forex and CFD Trading on eToro?

Written by Nick Zelver

Reviewed by Mike Druttman

You can trade both forex and CFDs on eToro. But they’re not the same thing. They each play by different rules and knowing which one suits your strategy can make all the difference.

Forex Trading on eToro

Forex trading is all about currency pairs: EUR/USD, GBP/JPY, USD/ZAR, and others. You're placing your investment on how one currency will perform against another.

But here’s the twist: on eToro, you’re not actually buying the currencies. You’re trading CFDs (Contracts for Difference), which means you’re speculating on price movements without taking ownership.

Quick rundown

• Currency Pairs: You get access to majors, minors, and some pretty exotic combos.
• Leverage: eToro lets you use leverage to stretch your buying power.
• Market Hours: The forex market is open 24 hours a day, five days a week. This is ideal if you’re in a different time zone or just like trading late.

CFD Trading on eToro

CFDs go way beyond currencies. Think stocks, indices, gold, crypto. If it moves, you can probably trade it as a CFD.

What to know

• Asset Variety: You’re not limited to forex. You can trade Apple, oil, gold, the S&P 500, and more.
• Leverage: Just like forex, CFDs can be traded with leverage. But remember, it cuts both ways.
• Short Selling: Expecting a price drop? CFDs let you open a short position and profit if the market moves down.

At-a-Glance Comparison

Basically what I'm saying here is that both use CFDs under the hood, but forex trading zeroes in on currency pairs, while CFD trading covers a wider universe of financial markets.

So what's the right choice? We'll, that all depends on what you’re trying to do. Looking to trade the dollar? Go forex. Want to spread your strategy across tech stocks and gold? CFDs are your game.

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. 51% 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.

This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.

Copy Trading does not amount to investment advice.  The value of your investments may go up or down.  Your capital is at risk.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which hasbeen prepared by our partner utilizing publicly available non-entity specific information about eToro.