Contents
eToro is an excellent broker for those who want to purchase Zcash from USA
Why do we recommend it?
- It takes techniques and moves from successful investors so you can emulate them
- Admits short-selling
- User-friendly and straightforward
- Leverage is allowed
- There are tons of products you can invest in
Main site: www.etoro.com/zcash
In case you are considering it, eToro is probably the best option to buy Zcash from USA.
This platform is known for making “social trading” a trend. Social trading is an ingenious form of investing in which traders can emulate the moves of other investors who have been making profits for years.
eToro has solutions for you, especially if you are still a novice user in trading, because it puts your investment on autopilot by repeating strategies from those who have been doing it for years. Also, in case you are an investor, the platform pays for your knowledge.
Besides, this platform is completely intuitive, ideal for a user who wants to start in the Zcash universe, without ending up overwhelmed with tons of numbers and information.
Is eToro trustworthy for purchasing Zcash?
Many independent tests have been applied to eToro to validate its reliability in the treatment of data from previous users. Every time, it has been confirmed that eToro is very meticulous with the information.
eToro follows all the strict policies of the European Union, legislation in which it is found. Its head office is in Cyprus, and it is approved by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 of the debts from its clients, including those from USA.
eToro is backed by the European Financial Instruments Market or MiFID, and by the Financial Conduct Authority or FCA in the United States of America. You should also know that it has a trajectory of fifteen years, with more than 20 million users around the world. So, yes, it is a safe broker.
Finally, their excellent customer service is also worth mentioning. You can contact them by phone or use their online chat.
Payment methods on eToro
When it comes to payment on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, type an amount, and choose your payment method. You can pay with PayPal, bank transfer, credit card, Skrill, or Neteller.
Remember that for security policies, you need to be the owner of the account or the credit card.
You can start with a $ 200 deposit, and there is a limited maximum for unverified accounts. Thus, if you intend to operate with large amounts, you should contact Support to verify your account.
eToro accepts 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.
Futures Vs CFD
If you want to know, next you have some major differences between CFDs and Futures:
- Who is the counterparty? With Futures, the counterparty is another trader. In CDFs, it’s the broker (eToro)
- Expiry date Futures have a determined expiration, while CFDs don’t have expiration date
- Markets available for trading Futures include fewer options to trade. With CFDs you can trade in several different markets.
- Minimum investment amount Costs for Futures are higher than costs for CFDs.
- Is it possible to leverage? With Futures, it isn’t possible; while with CFDs it is.
If you still don't know what “leverage” is, we'll describe it briefly: it is the ability to use a higher amount than you actually have. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say that you are confident that Zcash will raise its price, and you want to “go long”. You have $ 1,000, but you actually can invest more and make more money.
There's the possibility of asking for a loan at your bank, but it is a process that takes time, and by the moment you receive the money, Zcash might be already so expensive that trading wouldn't be convenient anymore.
Using leverage, you can obtain that amount of money really easily. It's 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 how much leverage to use as in the screenshot:
Within other markets, the ability to leverage is greater. This is because leverage is most common in short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 are a “loan” from eToro).
- Then, turns out that Zcash does rises, as you thought, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- Once the $ 1k from leverage is returned, 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 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But watch out: if all goes as you intended and the asset increases, you will make profits. However, if the price falls, you will also lose more money than you invested.
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 using leverage it is fundamental to take into account Take Profit and Stop Loss.
Take Profit is the automatic sell order that is above the entry price: you buy Zcash at $ 100 and you ask eToro to close your position as soon as the price reaches $ 120. It is very helpful to avoid being blinded by greed: we would all take a 20% profit when making the investment, but when you reach that 20% it is easy to want higher profits and put yourself at risk of losing money. It's like you got assured in advance that you won't be irresponsible.
Stop Loss is even more necessary, especially if you trade with leverage, since a reduced loss with leverage can be fatal for your wallet. Consider that eToro will recommend a limit for Stop Loss, but it is better to place it lower than the platform suggests.
What is an ETF?
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 at any moment in the market, but offer much more variety and considerably lower rates.
ETFs
Have you heard about Exchange-traded funds or ETFs? They are passively managed funds, known for combining the advantages of stocks and mutual funds: they can be traded at any moment in the market, but include a much wider diversity of assets and considerably lower rates.
About Index Funds
This is the best option for people who can invest in the long term, mostly for those who are starting to trade, because it is inexpensive, diversified, and safer.
Unlike a lot of people think, benchmark returns are very difficult to beat and very few fund managers achieve that, apart from some specific cases.
In practice, if a fund manager achieves to beat the benchmark, it is only for a short time or on a specific occasion. Or perhaps they would charge very high fees and indexing would be a better decision anyway (with minimal commissions).
Index funds offer these two advantages: they usually beat active managers in the long term, and the fees are so much lower.
Commodity market
The main attraction of trading with commodities is that prices are more stable than those of other financial assets. In fact, their stability is what makes most investors trade with commodities when facing possible inflation or market volatility. Still, the cost of commodities is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Consider that the only intended profit from the investment in raw materials will be the hypothetical capital gain after selling them back: unlike shares, these don't pay dividends.
Commodities are usually categorized into two types: first, we have hard raw materials, which are precious metals (gold, silver, copper, and platinum), industrial metals, and oil; in second place are soft raw materials, which are agricultural goods like coffee, rice, soy, or sugar.
What are Contracts for Difference?
It is possible that you have found the acronym CFD now and then if you entered eToro before. We will come back to it, but you should know first that CFDs on eToro are only possible if you go short.
We will also refer to terms such as going short and leverage, in case you are interested in day trading cryptocurrency or more advanced practices.
The advantage of eToro is that it allows you not only to bet if you are “in the black”, but with CFDs you can also bet “in red”. For instance, you believe that the Zcash will fall, so you obviously think “if it is going to depreciate (go down in price), I'll just wait and bet when it has gone down”. Nevertheless, if you really think that it's going down, why not making some profits out of that?
The operation known as “going short” will allow you to do that. It works, roughly, like this:
- You obtain from a loan 100 units of Zcash, which cost $ 5,000 (these numbers are imaginary)
- You sell them at their current price, $ 5,000
- The price is reduced, as you calculated, and the unit of Zcash goes from $ 50 to $ 30
- You purchase the 100 units again, but at $ 3,000
- You pay back the 100 units
- The difference is yours, so, you will have earned $ 2000
It all sounds more complex than it really is. Just keep in mind that by trading in Zcash on eToro, with CFDs you can make a profit if you anticipate downs in the price.
How to use eToro
As we have mentioned among the positive aspects of eToro, the best thing about this platform is its simplicity: anyone can invest without having to read endless explanations.
You won't have any issues with the interface if you have used any other social network, like Whatsapp or Facebook.
We will talk about the registration process and the different tabs you will find on the page.
First, you will have to fill in your personal data.
Before you end up with the sign-up process, you will also have to answer some questions about your previous trade experience.
However, it is not like you are answering a test. It is only a way of finding out how much knowledge you have and what type of financial instruments they can suggest. For example, if you have never invested before, they will not recommend that you invest in futures.
Let's get to know the different sections of the platform.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. Just click the tab and you will be able to set it. This is helpful in case you want to purchase a security that is falling but you believe it will decrease even more.
In “News Feed”, traders interact and share 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
- Raw materials
- Currencies
- Index funds
The concept “social trading” makes sense within “People”: there, you can copy the trading strategies of any user you choose with just one click.
Using the search box, you can find the investors that best suit your interests: by risk level, types of financial instruments, average earnings… Just indicate the amount you want to invest and eToro itself will replicate the movements of the investor you chose, in proportion. “In proportion” means that if you have $ 1000 and the trader puts 10% in an asset, eToro will invest also 10% of your funds (in this case $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
In some cases, you might prefer copying to CopyPortfolios than to other users, 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 … You think that a certain sector will prosper anytime soon? Then you will surely find a CopyPortfolio about it.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, like buying and holding or day trading, for naming just a few.
If you don't have much experience in investment, my suggestion is something in between: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.
For instance, if you purchase a cryptocurrency at $ 15, then it increases to $ 25 and falls again to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Hence, you will obtain a good profit.
I know it's tempting to look to sell when the price is at its peak, right before corrections, but unless you're clairvoyant, that's impossible. The mentioned method is much more down-to-earth and, well applied, it can work very well for you.
And when you have more experience, you can take your first steps with advanced investment strategies, such as short-selling or using leverage.
How does a demo account work?
If you do not have much experience investing, the possibility to operate in “demo” mode will be helpful. You only need to set the “virtual” option and you will be able to trade with an imaginary balance.
This can be a great way of gaining experience and confidence 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 can trade with a variety of financial instruments, not only with Zcash.
The first attempt is not usually that good. But don't worry, because you can ask eToro to replenish the virtual $ 100k to your account.
Take into account that you should always be cautious when investing, and using a virtual portfolio might have the opposite effect. It is not the same to operate with your own money than with fake funds, which you can lose without a problem.
And of course, if you want to invest in the medium or long-term, with earnings almost guaranteed just by replicating an index, it doesn't make sense that you invest in the virtual mode and wait for years. On the other hand, short and medium-term operations are perfect to try out with the demo mode.