Contents
eToro is an excellent brokerage for those who want to purchase Binance Coin from Egypt
Pros:
- It is very easy to use
- Allows to learn from other investment strategies
- Allows you to short sell
- You can leverage
- Lets you invest in thousands of other products
Official homepage: www.etoro.com/binance-coin
eToro is probably the best option today to purchase Binance Coin from Egypt.
eToro is known for making “social trading” a trend, a revolutionary form of investing in which traders can repeat the moves of other investors who have been making earnings for a long time.
If you are a novice user or do not have much experience in investments, eToro is great for you, since it automatizes your investment by imitating moves from those who have been doing it for years. Oppositely, if you are an investor and decide to share your abilities with other traders, eToro rewards you with money.
It is also worth mentioning how accessible is the platform, ideal for new traders who are starting with Binance Coin.
Is eToro reliable for purchasing Binance Coin?
eToro has been tested by independent organizations once and again to verify its integrity in reporting previous performance statistics. The results have always confirmed that eToro is very precise with the figures.
The main office of eToro is in Cyprus, and the platform is certified by the Cyprus Securities Market Commission (known as CySEC), which covers debts up to € 20,000 from its clients, including those from Egypt. The platform complies, on the other hand, with all the strict requirements of the European Union.
In Europe, it is backed by the European Financial Instruments Market or MiFID, and in the USA it is under the control of the Financial Conduct Authority (FCA). Besides all these regulations, it should be mentioned that eToro has worked for fifteen years and that it has more than 20 million users, so we can rest assured that our funds are in good hands.
Finally, their customer service functions perfectly. You can use the online chat, and they also have a phone number available for assistance.
eToro deposit methods
When it comes to payment on eToro, there is not much to say, since it is pretty simple. Just click “Deposit funds”, type an amount, and choose the payment option you prefer. You can use PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
(Keep in mind that you should be the account or credit card owner, for security policies).
The minimum amount you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified. Therefore, in case you want to trade with larger sums, contact Support beforehand to verify your account.
Finally, know that you can make the transfer in any currency because eToro converts it to USD, although it charges a fee, so it is preferable to make the transfer directly in USD.
How are CFDs and futures different?
How are CFDs and Futures different?
- Counterparties
- Futures: operations are made with another investor or trader.
- CFDs: the counterparty is eToro, the brokerage. That means you do not “play” against or with another trader but the bank.
- Expiration date:
- Futures: there is a date of expiry. Once the contract expires, it is closed and can't be reopened.
- CFDs: on the contrary, there is no expiration date. It is possible to get back to a good position before you close.
- Variety:
- Futures: there are fewer options
- CFDs: they include lots of different assets, commodities and currencies
- Minimum investment amount:
- Futures: very high minimum investment
- CFDs: you can start with a small amount
- Trading costs and charges:
- Futures: costs are usually lower
- CFDs: costs are higher
- Leverage:
- Futures: it isn't possible to leverage
- CFDs: fully available
If you still don't know what “leverage” is, we'll describe it briefly: it is the possibility to invest a higher amount than you actually have. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Suppose now that you are sure that the price of Binance Coin is about to raise its price, thus you decide to take a long position.
You are absolutely sure that Binance Coin will go up, but you only have $ 1,000 available. Despite that, why miss the opportunity to make more money?
You could consider asking for a loan at your bank or other financial company, but it is a process that takes time, and when you receive the money, Binance Coin might be already so expensive (if your guess was right) that investing wouldn't be convenient anymore.
Leverage is just like a credit, but it is only a few clicks away! eToro allows you to operate with much more money than what you have on the platform's wallet. You will simply see the different options as in the image below:
Trading with other assets allows you to use higher leverage. Why? Because leverage is most common in short-term operations, 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).
- Then, turns out that Binance Coin does rises, as you thought, and now the cost 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 the net profit is $ 400, since the other $1,000 was yours initially.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is quite good.
Does it sound too wonderful? The thing is, it can also play against you. If everything goes as planned, you will earn profits in little time; but in the opposite case, you will also lose more really quickly.
Let's say that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. For that reason, when trading with leverage it is crucial to be familiar with two other concepts: Take Profit and Stop Loss.
Take Profit is a limit you can set when trading: you set the platform to sell your assets once they get to a point above the entry price. For instance, you can buy Binance Coin at $ 100 and ask eToro to close your position automatically when it reaches $ 120. It is very helpful to avoid being blinded by greed: a 20% profit is usually very good, but once you see it goes up, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you to trade more safely.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). For that reason, it is vital to establish a Stop Loss lower than that suggested by the broker.
What are ETFs?
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are traded in the market like stocks, during the day. However, their main benefit is that they offer more alternatives compared to stocks, and have lower fees.
Index Funds
If a long-term investment sounds like something you would do, and you won't need to take back your money in at least five years, index funds can be the best choice. This kind of investment is also suitable for beginners since the risks are much lower.
Contrary to common perception, it is very hard to beat the market (yes, you have surely heard of managers who achieve huge returns).
But putting aside some remarkable cases, not everything is as good as it sounds: when someone brags about having beaten the benchmark, it was probably for a limited time, or their charges are really high. Also, take into account that if something happened once, it doesn't mean necessarily that it will happen again in the future.
With index funds, you don't have to worry about that: they usually beat active managers in the long term, and the commissions are so much lower.
Foreign exchange
Foreign exchange trading or Forex consists, as the name says, in the trading of currencies. It is the conversion between two currencies, and the aim is, evidently, to obtain a benefit out of this.
For example, if you want to exchange the EUR/USD pair, you buy euros and pay with dollars, with the expectation that the first currency (the euro) will increase compared to the second (the dollar), to make a profit by selling it. Let's say you entered when the price of one euro is 1.10 USD and you leave when it reaches 1.15: that margin is yours once you sell again.
You may be thinking by now that this form of trading requires high investments, and you are not wrong, since variations are usually minimal, and often you will need to use high leverage (which sometimes can be too much of a risk). Our recommendation for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
You can exchange with the most common currency pairs on eToro. However, consider that this market works through contract for differences, so the underlying asset won't be yours.
Shares
Now let's talk about the most popular financial assets: stocks or shares. Stocks are fractions in which a corporation that chooses to go public is divided, and thanks to capitalism you may own a proportion of a company and have returns, but first, you should know where and how to invest your money.
We can group stocks into two different kinds: the ones that divide their earnings regularly among the shareholders, and those that don't. The former ones are great, obviously, but investing in the latter can also be a good idea since sometimes you can make even more money by selling the shares.
On eToro, if you choose a company that pay out dividends, you will receive them in your account, and you can withdraw those funds or invest them back. Our suggestion is, if you don't have financial urgencies, that you benefit from compound interest and reinvest it in the company itself.
Consider that on eToro you can use leverage to “dope” your trades, but in that case, you will not receive interest as the trade would be a CFD. For long-term investments, it is not advisable to use leverage: you can end up losing money, since you will not receive dividends and also you will have to pay commissions while your operation is open.
How does eToro work?
We said before that eToro is very friendly and intuitive. Anyone can start investing without previous experience or long explanations.
You won't have any problems with the interface if you are familiar with any other social network, like Facebook or Twitter.
We will explain the registration steps and the different tabs that you will see on the platform.
You will have to provide some personal data (like full name or address, for instance) when registering.
To complete your registration, you will have to answer some questions about your experience at investing.
But don't feel intimidated. They only intend to find out about your previous experience and knowledge to determine which instruments to recommend for you.
When you fill in all your information in your profile, you will stop seeing the “incomplete profile” message.
Let's see what the different sections of the platform are.
With the “Set Price Alerts” tool, you'll be able to program an alert when an asset is at a certain price. Just click the tab and you will be able to set it. This is ideal if you want to buy an asset that is falling but you believe it will decrease even more.
In “News Feed”, users interact and share valuable information.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we discussed in this guide, the trading instruments available on are:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Forex
- Index funds
The term “social trading” makes sense in the section “People”: there, you can duplicate the strategies of the best investors.
In this section, you can find those traders that you find more interesting. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. If you invest $ 1000 and the trader puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same asset, in this case, $ 200.
You will also find the CopyPortfolios divided into three main kinds: “Top Trader”, “Market” and “Partner”.
The advantage of copying to CopyPortfolios instead of individuals is that this way the risk will be more diversified. There are all kinds of portfolios that you can recognize easily and are classified by sectors. So, in case you suspect a specific industry, like gaming or drones, will prosper in the future, you should look for that specific portfolio.
Trading strategies
You can trade cryptocurrencies in many different ways: from purchasing and holding to day trading (taking advantage of price fluctuations).
My recommendation for those who are starting to trade is something in the middle: when you open your position, set a dynamic stop loss 15-20% below the maximum price, and let the magic happen.
Therefore, if for example you acquire a cryptocurrency at $ 10, it rises to $ 20 and then decreases to $ 12, your stop loss will take you out of the trade at $ 16-17 and you will make a pretty good profit.
Perhaps you are wondering: why not selling when the cost is at its maximum? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and give good results.
Later on, you will be able to apply more complex strategies, like short-selling or using leverage.
Demo account
In case you do not have much experience as an investor, you can start by practicing with a “demo” option. Setting a virtual account and operating with fictional money is very easy.
This option is ideal for those who want to put their talents to the test before playing for real money. With your virtual account, you will begin with a $ 100,000 balance (which of course, is fake) to do your operations, not only with Binance Coin, but you can also work with a diverse portfolio with a variety of assets.
The first attempt is not usually that good. But don't worry, because you can ask support to replenish the virtual $ 100k to your portfolio, and the second time you should do better.
Keep in mind that investing is mainly about being cautious, and perhaps a practice account can prevent you from controlling your impulses. It will never be the same as risking your own money.
And of course, if you want to invest in the medium or long-term, with profits almost assured just by replicating an index, it is absurd that you invest in the virtual mode and wait for years. On the contrary, short and medium-term trading is ideal to try out with the demo mode.