Contents
eToro, our reccomended option for acquiring IOTA from USA
Some of its advantages are:
- You can learn from other investment tactics
- Accepts short-trading
- Really intuitive and straightforward
- You can leverage
- There are uncountable investment possibilities
Go to the official site: www.etoro.com/iota
eToro is the best option today to buy IOTA from USA.
This broker is known for making “social trading” a trend, an ingenious way of investing in which investors can replicate the techniques of other traders who have been making profits for years.
eToro has solutions for you, especially if you don't have much experience in trading, since it automatizes your investment by replicating moves from traders with a very long profit history. Additionally, in case you are an investor, the platform pays for your knowledge.
Another advantage is how manageable the platform is, which turns out perfect for new users that are learning all about IOTA.
About Contracts for Difference
If you browsed eToro before, you probably realized that the initials CFD appear frequently. Before we explain what this is, we must say that CFDs on eToro are only possible when you go short or select leverage higher than x2 (nevertheless, this is not even available on eToro).
For your information, and if you are considering day trading cryptocurrency or other operations, you will also find terms like short-selling and leverage.
eToro allows you to bet both “in the black” and “in negative”. Let's say that you are sure that the IOTA will fall, so perhaps you think that it is better to wait until it does and then go in. Nevertheless, if you really think that it's going down, why not making some profits?
You can do that by “going short”. Basically, it works like this:
- You obtain from a loan 100 units of IOTA, with a total value of $ 5,000 (these numbers are fictional)
- You make $ 5,000 by selling the 100 units
- The IOTA goes from $ 50 to $ 30 (as you calculated, the price decreases)
- You buy the 100 units again, but at $ 3,000
- You pay back the 100 units
- You keep the $ 2000 difference!
Take into account that it seems much more tricky than how eToro CFDs actually work: we can summarize this whole operation by saying that by trading in IOTA you can also earn money if you anticipate it will go down.
What's the difference between CFDs and futures?
Here is a brief comparison between Futures and CFDs, in case you want to know more:
- Counterparties
- Futures: operations are made with someone else, another investor.
- CFDs: the operations are not made with another individual, but the counterparty is the brokerage, in this case, eToro.
- Date of expiry:
- Futures: they expire. Once the contract expires, it is closed even if you have losses.
- CFDs: there is no expiration date. You can wait until you get in a good position before exiting.
- Trading options:
- Futures: there are fewer options for investment
- CFDs: a lot of variety, there is a wide diversity of CFDs
- Minimum investment amount:
- Futures: minimum investment is higher
- CFDs: you can start with a small amount
- Pricing and commissions:
- Futures: as you have to invest more, fees are lower
- CFDs: costs are higher
- Leverage:
- Futures: there is no leverage leverage
- CFDs: accessible leverage
BTW, do you know what leverage is? Just in case, we'll define it briefly:
another advantage of trading is that it lets you invest more money than what you really have. Let's say that you enter with $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.
Why using leverage and how to do it
Let's assume that you are sure that the price of IOTA is going to raise its price, thus you decide “going long”.
You are positive that IOTA will go up, and you have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
Possibly, you could ask your bank for a credit, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then obtain IOTA… Nevertheless, when you finish doing all that, probably IOTA would be already much higher, and it wouldn't be a good idea to invest then.
Thanks to leverage, you can obtain that amount with two clicks. It's like a loan, but much easier and quicker, and with the benefit that you will be getting it directly from eToro. You will simply see the different options as in the screenshot:
Trading with other assets allows you to use higher leverage. This is because cryptocurrencies regularly represent medium-long term investments. However, leverage is used mainly for short-term operations or day trading. That said, I'm going to explain better how leverage works.
If you have the $ 1,000 and choose leverage x2, you will be investing $ 2,000. eToro would be “loaning” you the extra $ 1,000.
A week later turns out that IOTA rises up and now the value of your investment is 20% higher, which means, you have $ 2,400 in IOTA. So, a wise decision is to sell them back now.
You will have to pay back the $ 1,000 of leverage and you will have made $ 400 (since the other $ 1,000 was your initial investment).
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
It may sound too good to be true. The thing is, you can also lose. If everything goes according to plan and the price goes up, you will earn more money in less time; however, if the value of the asset decreases, you will also lose more in less time.
Let's say that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. For that reason, 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 bought IOTA at $ 100, you can ask eToro to close when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps rising, which could be a mistake since the price could go down again.
On the other hand, when operating with leverage you should always use Stop Loss, because a small fall in the price of an asset can lead to a substantial loss. For that reason, it is essential to set a Stop Loss lower than that suggested by the platform.
Investment strategies
There are different methods or ways for crypto trading, such as day trading or buying and holding, for naming just a few.
My suggestion for those who are starting to invest is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) when you open your IOTA operation and wait for it to work on its own.
This means that if, for example, you buy a cryptocurrency at $ 10, it rises to $ 20, and after that it decreases to $ 12, your stop loss will take you out of the trade at $ 16-17 and you will obtain a pretty good profit.
I know it's tempting to look to sell when the cost is at its maximum, right before corrections, but that is simply not possible. The mentioned method is much more down-to-earth and it can give great results.
Later on, you will be able to apply more complex strategies, such as going short or using leverage.
How does a virtual portfolio work?
If 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.
A virtual account can be a good way of gaining confidence before starting to operate with real funds. When you open your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of financial instruments available on eToro, besides IOTA.
If your trials don't go as planned and you lose your funds, you can always ask the platform to replenish $ 100k of virtual balance. You'll probably do better on the second try.
Take into account that you should always be prudent when trading, and perhaps a practice account can prevent you from controlling your impulses. It is not the same to trade with your own money than with virtual funds, which you can lose without a problem.
Evidently, if you are interested in trading in the long or medium-term, it makes no sense that you try the virtual mode and waste years waiting to see the results. But it can be very useful if you want to practice short and medium-term investment.
eToro Interface
We mentioned before that one of the best things about eToro is that the platform is very friendly and easy to use. You don't need to read a lot or have previous knowledge to start investing.
You won't have any issues with the interface if you have used any of the most common social networks.
We will explain, roughly, the registration steps and the different tabs that you will find.
When you open your account, you will have to fill in your personal data, like first name, last name, address….
They will also ask you about your previous trade experience.
But don't feel intimidated. The objective is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
Now we will talk about the fundamental sections of the site.
With the “Set Price Alerts” tool, you'll be able to program an alert when a security is at a certain price. Just click the tab and you will be able to set it. This is ideal if you want to purchase an asset and you are waiting for its price to fall.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Forex trading
- Index funds
In the tab “People” are all the profiles and historical performances of other users, and you can replicate their strategies with just one click. This is where the “social trading” concept is best applied.
You can search for those investors that you find more interesting: by average earnings, market or risk level, for instance. You just have to choose the amount you want to invest and eToro will be in charge of replicating the movements made by the investor you chose, in proportion. This 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.
Finally, you will see in this section the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
The benefit of using CopyPortfolios instead of copying particular traders is that this way the risk will be 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.