Contents
eToro is an excellent broker for those who want to buy Ripple from India
Some of its advantages are:
- There are uncountable goods you can invest in
- eToro offers leverage
- User-friendly and straightforward
- It uses techniques and moves from experienced traders so you can copy them
- Admits short-trading
Go to the official page: www.etoro.com/ripple
You should absolutely consider eToro in case you are interested in buying Ripple from India.
“Social trading”, a relatively new investment method that consists in replicating techniques and moves from other experienced investors, has become trendy thanks to eToro.
eToro is very useful if you don't have much experience in trading, since it automatizes your investment by replicating moves from those who have been doing it for years and making profits. Additionally, in case you are an investor, the platform pays for your knowledge.
Besides, the interface of the platform is so uncomplicated, ideal for a user who wants to start in the Ripple world, without getting crazy with tons of graphs and numbers.
Can you trust eToro?
eToro has been tested by independent organizations once and again to verify its reliability in reporting performance statistics from previous users. And it has been confirmed every time that eToro is rigorous with the figures.
The main office of eToro is in Cyprus, and the platform is certified by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 from its client's debts. The platform complies, on the other hand, with all the strict regulations of the European Union.
It is also backed by the European Financial Instruments Market (MiFID), and in the USA it responds to the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has more than 20 million users all over the world, and it has been operating for fifteen years. To sum up, we can be certain that our finances are safe.
It is also important to mention the great customer service. You can use the online chat, and they also have a phone number available for assistance.
How to deposit funds on eToro
Within the payment methods that you will find on eToro are: bank transfer, PayPal, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Neteller, and Skrill. Depositing money on eToro is so simple: go to “Deposit funds”, type a number and select a payment method from the previous ones.
Consider that for security policies, you must be the owner of the account or the credit card.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. Thus, if your intention is to deposit higher amounts, you will need to verify your account previously.
eToro accepts deposits in any currency, but charges a fee for making the conversion to USD. So it is better to use USD from the beginning.
Do you know the term “leverage”? Just in case, we'll put it simply:
trading lets you invest higher figures than what you really have. For instance, if you have $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Suppose now that you are sure that the price of Ripple is going to raise its price, therefore you choose to take a long position.
You are certain that Ripple will rise, and you have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
There's the possibility of asking for a credit at your bank, but it is a process that takes time, and by the moment you finally get the money, Ripple might be already so expensive that trading wouldn't be convenient anymore.
Thanks to leverage, you can obtain that amount of money just by clicking your mouse. It's just like a loan, but much better: from eToro itself. You can get financing to invest much more money than you actually have on the platform. Before trading, you will find the leverage options as in the screenshot:
Trading with other assets allows you to use even more leverage. The reason is that leverage is most common in short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was “borrowed” from eToro).
- A few days later, Ripple does rises, as you thought, and now the price of your investment is $ 2,400 (20% more), so you decide to sell back.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
It may sound too good to be true. The thing is, it can also play against you. If everything goes according to plan and the price goes up, you will earn profits in little time; but in the opposite case, you will also lose more really fast.
For example: if instead of increasing by 20%, the price falls by 10%, you won't lose $ 10, but twice (the leverage) that figure, that would be $ 20. That is why to operate with leverage it is essential to take into account Take Profit and Stop Loss.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you purchased Ripple at $ 100, you request eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps rising, which could make you lose it all.
Stop Loss is even more important, especially if you use leverage, because a small loss with leverage can be fatal for your wallet. Always remember to establish a Stop Loss lower than that suggested by eToro.
About ETFs
What do you know about Exchange-traded funds? They are passively managed funds, known for combining the benefits of stocks and mutual funds, because they can be traded regularly at market price, but include a much wider diversity of assets and the fees are significantly lower.
ETFs
What do you know about Exchange-traded funds? They are similar to index funds and are known for merging the benefits of stocks and mutual funds: they can be traded regularly at market price, but include a much wider diversity of assets and the rates are significantly lower.
Index Funds
This is the best option for people who can invest in the long term, especially for those who are starting to trade, because it is inexpensive, diversified, and the risk is lower.
Perhaps you have a different idea, but it is very hard to beat the market (yes, you have surely heard of investors who obtain huge profits).
But except for Warren Buffett and a couple more, all that glitters is not gold: if you hear of someone who has beaten the market, they have probably done so for a short period, or charges so many commissions that it ends up being better for you to index (whit minimal commissions). Besides, past performances do not ensure a future one.
With index funds, you won't be concerned about that: most of the time, they beat active managers in the long term, and the rates are minimal.
About Contracts for Difference
You probably have seen the initials CFD all the time if you entered eToro before. Before we come back to this, you must know that CFDs on eToro are only possible if you are short-selling.
We will also refer to concepts like short-selling and leverage, in case you are considering day trading cryptocurrency or other more advanced practices.
The good thing about eToro is that it allows you to bet both “in the black” and “in negative”. In a hypothetical case: you believe that the Ripple will go down, so perhaps you consider that it is better to refrain from getting in until it actually falls. However, if it really goes down, it is possible to make some profits out of that.
The practice known as “going short” will allow you to do that. It works, pretty much, this way:
- You ask for a loan of, let's say, 100 units of Ripple, which cost $ 5,000 at the moment (obviously, these figures are made imaginary)
- You sell the 100 units at $ 5,000
- The Ripple goes from $ 50 to $ 30 (as you thought, it devaluates)
- Again, you purchase the 100 units, but at the current value, $ 3,000
- Then you pay back the 100 units
- The rest is yours, so, you will have earned $ 2000
Consider that it is much easier than it sounds: we can summarize this whole operation by saying that by trading in Ripple you can also make money if you predict the downs.
eToro Interface
We said before that eToro is very easy to manage. Anyone can start using it without previous experience or long explanations.
If you are familiar with any of the most popular social networks today, you can perfectly manage eToro's interface.
We will explain, roughly, the registration process and the different sections that you will see.
First of all, you will have to fill in all the information that eToro asks for: first and last name, address…
To complete your registration, you will have to answer some questions about your experience as an investor.
But don't worry: it is not an exam. It is only a way of finding out how much knowledge you have and what type of financial instruments they can recommend. For example, if you have never invested before, they will not suggest that you invest in futures.
As soon as you are registered and have completed your profile, the “incomplete profile” bar will disappear.
Let's review the different functions of the page.
With the “Set Price Alerts” tool, you'll be able to program an alert when a security is at a certain price. This is perfect if you want to purchase an asset that is falling but you believe it will decrease even more.
“News Feed” is the more “social” section. There, users can interact and share their knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we discussed in this guide, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Raw materials
- Forex
- Index funds
In “People”, you will find the profiles of eToro users and their performances. This is where you can copy the movements of your preferred investors.
Through the search engine, you can find the investors that best suit your interests: by risk level, types of financial assets, average earnings… Just indicate the amount you want to invest and eToro itself will be in charge of replicating the movements of the selected investor, in proportion. “In proportion” means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will also invest $ 100 of your balance in the same company.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
Sometimes you might prefer copying to CopyPortfolios than to individuals, because you avoid putting all your eggs in one basket. There are all kinds of portfolios that you can identify easily and are divided by sectors. So, in case you think a specific industry, like gaming or oil, has good chances to succeed, you should look for that specific portfolio.
Investment strategies
You can operate cryptocurrencies in many different ways: for example, you can buy and hold, or you can day trade using volatility of the market in your favor.
If you don't have much experience trading, I recommend something in between: when you open your position, set a dynamic stop loss 15-20% below the maximum price, and forget about the operation.
This means that if, for instance, you purchase a cryptocurrency at $ 10, it reaches $ 20, and after that it falls to $ 12, your position will be closed at $ 16-17 and you will have earned a considerable profit.
It may sound way better to sell when the price is at its peak, but unless you're a fortuneteller, that will never be possible. The mentioned method is much more realistic and, well applied, it can work very well.
And when you have gained more experience, you can take your first steps with advanced trading techniques, such as short-selling or using leverage.
How does a virtual portfolio work?
For those who still don't have much experience in investing, a demo account can be useful. You just need to set the virtual mode and you can start trading with “fake” funds.
This can be a great way of practicing before starting to trade with real money. The platform will give you an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you will be able to operate with all the different assets available on eToro, not only with Ripple.
The first attempt is not usually that good. But don't worry, since you can ask support to replenish the virtual funds to your account.
But remember that investing is mostly about being cautious, and using a practice account can have the reverse effect. It is not the same to risk your real savings than to operate with virtual funds which loss does not suppose any drama.
Evidently, the demo mode is kind of absurd if you intend to invest in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years. Demo accounts may be useful for trying out short or medium-term operations.