Contents
eToro, our favorite broker for purchasing EOS in India
Why do we recommend it?
- It is very easy to operate
- Allows to replicate investment strategies
- You can go short
- Leverage is allowed
- There are uncountable goods you can invest in
Main site: www.etoro.com/eos
In case you are considering it, eToro is probably the best way to buy EOS from India.
This platform is known for making “social trading” a trend, a revolutionary form of investing in which investors can replicate the techniques of other traders who have been generating income for years.
eToro has solutions for you, especially if you are still a novice user in trading. You can rest assured that you are making a smart investment since the site replicates those from subjects with a long profit record. Additionally, in case you do have experience in investment, the platform pays you for sharing it.
It is also very convenient how easy is to manage this platform, perfect for beginners who are taking their first steps with EOS.
Exchange-Traded Funds
What do you know about Exchange-traded funds? They are similar to index funds and are known for combining the advantages of stocks and mutual funds: they can be exchanged regularly at market price, but have much more investment possibilities and considerably lower fees.
Forex trading
Forex or currency trading allows obtaining profits by converting one currency for another.
If you decide to exchange euros and dollars, you speculate how many dollars it will take to buy a euro, with the expectation that the euro will increase compared to the dollar. Therefore, if you bought each euro for 1.15 USD and you sell them back when they are worth 1.20 USD, you'll be earning that difference.
Perhaps you already inferred this, but this type of trading requires a large capital, since fluctuations are typically low, or using a lot of leverage, which could be incautious. Our advice for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
Most currencies are available on eToro but consider that in Forex sales are always made through CFDs, which means the underlying asset won't be yours.
About Index Funds
If you want to invest in the long term, and you won't need to take back your money in at least five years, index funds can be the best choice. This type of investment is also great for beginners since the risks are lower. Besides, the variety is wider.
Contrary to what it may seem, very few investors can beat the benchmark (although you have probably heard of investors who obtain huge returns).
But putting aside some exceptional cases (like Warren Buffett's), all that glitters is not gold: if you hear of someone who has beaten the index, they have probably done so for a short period, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, if something happened once, it doesn't necessarily represent a regular behavior.
With index funds, you don't have to worry about that: they usually beat active managers in the long term, and the charges are lower than you imagine.
Commodities (raw materials)
Most people invest in raw materials due to their stability. While other assets tend to fluctuate more, commodity prices vary less and offer safety against inflation or market volatility. However, prices do depend on supply and demand in the market, so if an economic situation provokes greater demand for a certain good, the price will also go up.
Consider that, unlike shares, commodities don't pay dividends. Thus, the only prospective earnings would come from a sale of the asset.
There are two basic types of commodities: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals (like aluminum, iron, or zinc), and oil; while the latter are agricultural resources as sugar, coffee, corn, soy, among many others.
In case you still don't know what “leverage” is, we'll put it short. When trading, it's the capacity of multiplying your investment without putting extra money. That way, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say now that you are sure that the price of EOS is going to raise its price, thus you decide “going long”.
You are certain that EOS will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
There's the possibility of requesting a credit, but you must know that all the process takes time, and when you receive the money, EOS might be already so expensive (if your guess was right) that trading wouldn't be convenient anymore.
With leverage, you can obtain that amount really easily. It's like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro which will let you invest much more than you have on the platform's wallet. It is simple, before investing you will see the different options as in the image below:
When operating in different markets you can use more leverage. Why? Because leverage is regularly for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's explain how leverage works with the previous example:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was “borrowed” from eToro).
- Then, turns out that EOS does increases, as you assumed, and now the cost of your investment is $ 2,400 (20% more), so you decide to sell back because you want to play it safe.
- Once the $1,000 from leverage is returned, 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 trick is that the risk of losing out also increases. If everything goes according to plan and the price goes up, you will earn profits in little time; but in the opposite scenario, you will also lose more really quickly.
Let's imagine 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. That is why the terms “Take Profit” and “Stop Loss” are crucial when using leverage.
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 EOS at $ 100, you program eToro to close your operation when it reaches $ 120. That way, you make sure you won't change your mind and decide to wait a bit longer in case it keeps rising, which could be a mistake.
Stop Loss is even more necessary, particularly when trading with leverage, since a small loss could have a significant impact on your wallet. Take into account that eToro will recommend a limit for Stop Loss, but you should set it lower than the platform suggests.
Can you rely on eToro?
eToro is very careful with the information about past performances from users, and its integrity has been tested several times times by independent organizations.
The main headquarters of eToro is located in Cyprus, and therefore it is approved by the Cyprus Securities Market Commission (or CySEC), which covers debts up to € 20,000 from its clients, including those from India. On the other hand, eToro meets all the strict regulations of the European Union.
It is also backed by the European Financial Instruments Market or MiFID, and in the USA it responds to the Financial Conduct Authority (FCA). Besides all these regulations, you should know that eToro has worked for fifteen years, with more than 20 million users around the world, so we can be sure that our money is in good hands.
Finally, their customer service functions perfectly. They have a phone number for assistance, a ticketing system to track any claim, and a live chat.
How to deposit funds into your eToro account
Among the payment options available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is a very easy process. Just go to “Deposit funds”, set an amount and pick the payment method you prefer.
(Keep into consideration that you must be the account or credit card holder, for security reasons).
The minimum amount you can deposit is $ 200 and there is a limited amount if you are not verified, so if you want to trade with higher amounts, you should verify your account previously.
eToro allows deposits or transfers in any currency, but you will have to pay a fee for the conversion to USD. So it is better to use USD directly.
How do Contracts for Difference Function?
If you have entered eToro previously, you must have noticed that the initials CFD appear over and over. Before we come back to it, we must say that cryptocurrency operations on eToro are only CFDs if you are short-selling.
We will also refer to terms like going short and leverage, in case you are considering day trading cryptocurrency or other more advanced operations.
With CFDs you can operate on eToro even if you are not “in the black” or having a negative balance. For instance, you have the certitude that the EOS will go down, so probably you consider that it is better to wait until it does and then go in. However, if you really think that it's going down, why not making some profits out of it?
You can do by “going short”. Its operation, roughly, consists in the following:
- They lend you, let's say, 100 units of EOS, which cost $ 5,000 (these are completely fictional numbers)
- You sell the 100 units at $ 5,000
- The price falls, as you guessed, and the unit of EOS now costs $ 30 instead of $ 50
- You buy the 100 units again, but at $ 3,000
- Now you pay back the 100 units
- There: the $ 2000 difference is yours
Keep in mind that it sounds much more complicated than it really is: we can just say that by trading in EOS you can also earn money if you foretell it will fall.
How to use eToro
As we have referred among the positive aspects of eToro, the best thing about this online broker is its simplicity: anyone can use it without having to read endless guides.
You won't have any issues with the interface if you are familiar with any of the most common social networks, like Instagram or Facebook.
Now we will walk you through the registration process and the different sections of the eToro interface that you should know.
You will have to fill in some information requested when registering.
They will also ask you about your previous trade experience.
But don't feel like you are taking an exam. They only intend to find out how much you know and which financial instruments to recommend for you.
Let's get to know the fundamental sections 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 buy a security that is falling but you believe it will decrease more to a certain point.
In “News Feed”, traders interact and share opinions, tips, and other valuable information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the different financial instruments that are available on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Currencies
- Index funds
The term “social trading” comes to life in the section “People”: there, you can copy the strategies of any investor you choose with just one click. You'll be able to see all their profiles and performances.
In this section, you will be able to find those users that you find more interesting. You can search by risk level, trading market, profits or country, among other filters. When you choose an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you invest $ 1000 and the trader puts 20% of their funds in an asset, eToro will invest $ 200 of your funds in the same asset as well.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
In some cases, you might prefer copying to CopyPortfolios than to other traders, since you avoid putting all your eggs in one basket, or in other words, risk is more diversified. Besides, the different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper in the future? Then you will surely find a CopyPortfolio about it.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as day trading or buying and holding, for naming just a few.
My suggestion for those who are beginning to trade is something in the middle: when you open your position, set a dynamic stop loss 15-20% under the maximum price, and let the rest happen on its own.
For example, if you purchase a cryptocurrency when it is worth $ 15, it increases to $ 25 and falls again to $17, the stop-loss will close your position at $ 21 or $ 22. Therefore, you will obtain a good profit.
I know it might sound more appealing to sell when the cost is at its highest, right before corrections, but unless you're a fortuneteller, that's impossible. The above strategy is much more realistic and, well applied, it can work very well for you.
Later on, you will be able to apply more complex techniques, such as going short or using leverage.