Contents
eToro, our favorite option for buying Gram in USA
Why do we recommend it?
- Really intuitive and straightforward
- It takes other successful investment strategies so you can replicate them
- You can go short
- Leverage is allowed
- There are uncountable investment opportunities
Main site: www.etoro.com/gram
If you are considering investing in Gram from USA, eToro may be the best way to do it.
This platform is known for making “social trading” fashionable, an ingenious way of investing in which investors can replicate the techniques of other traders who have been generating income over time.
eToro is very useful if you are still a beginner in trading. You can rest assured that you will be making a smart investment since the site duplicates those from subjects with a long profit record. Additionally, in case you do have experience in investment, eToro pays you for sharing it.
Another thing to mention is how manageable the interface is, which turns out perfect for new users that are learning all about Gram.
eToro Interface
We said before that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
If you are familiar with any of the most common social networks, you can perfectly manage this platform.
Now we are going to detail the registration process and the different sections of the eToro interface that you should know.
You will have to provide some personal data (like full name or address, for instance) when registering.
Additionally, you will see that they ask you some questions about your experience as an investor.
But you don't need to worry: it's not about passing 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.
Now we will talk about the fundamental sections of the page.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. This is helpful in case you want to purchase a security and you are waiting for it to decrease.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and learn from each other.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets that are available on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Commodities
- Forex
- Index funds
The term “social trading” comes to life within “People”: that is where you can replicate the movements of the investors you find most inspiring with just one click. You'll be able to see all their profiles and historical performances.
You can search for those investors that you find more interesting: by average profits, market or risk level, for instance. Just indicate 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 put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your balance in the same company.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of particular traders is that this way the risk is more diversified. Besides, the 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.
By the way, do you know what leverage is? Just in case, we'll define it simply:
trading allows you to invest more money than what you really have. That is, if you enter with $ 100 and you use x2 leverage, you will be actually investing $ 200.
About leverage, Take Profit and Stop Loss
Assuming that, for example, you are positive that Gram is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and make more money.
You could consider requesting a loan at your bank or other financial company, but it is a process that takes time, and when you receive the money, Gram might be already so expensive that trading wouldn't be convenient anymore.
Thanks to leverage, you can obtain that amount of money really easily. It's like borrowing money, but much easier and quicker, and with the benefit that you will be getting it directly from eToro which will let you invest much more than you have on the wallet. Before trading, you will how much leverage to use as in the screenshot below:
Trading with other assets allows you to use more leverage. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used mostly for day trading or short-selling. But let's see how leverage works.
You enter with $ 1,000 and decide to use leverage x2, which means you would have $ 2,000 to invest (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A couple of days later, as you thought, Gram has risen by 20% and your money has appreciated reaching $ 2,400. Ok, don't be greedy, let's sell.
Obviously, the 1k $ from leverage will be deducted, and you'll have $ 1,400 left, of which $ 1000 was yours initially, so you'll have earned $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
But not everything is wonderful. If all goes as you planned and the price goes up, you will make money. Nevertheless, if the asset decreases, you will also lose more money than you invested.
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 fundamental to know other two terms: Take Profit and Stop Loss.
Take Profit is a trading limit you can set for your assets: you program your operation and ask the platform to sell them once they get to a point above the entry price. For instance, you can buy Gram at $ 100 and ask eToro to close your position automatically when it reaches $ 120. It is very useful to avoid being blinded by enthusiasm: a 20% profit is usually pretty good, but once you see the price has risen, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you reduce risks when trading.
Stop Loss is even more necessary, mostly if you use leverage, because a reduced loss with leverage can be tragic for your wallet. Take into account that eToro will recommend a limit for Stop Loss, but it is better to place it lower than that.
Futures Vs CFD
Here are the main differences between Futures and CFDs, in case you want to know more:
- Counterparty
- Futures: operations are made with someone else, another trader.
- CFDs: the counterparty is eToro, the brokerage. That means you don't “play” against or with another trader but the bank.
- Expiration date:
- Futures: there is an expiration date. Once the contract expires, it is closed even if you are in red.
- CFDs: there is no expiration date. It is possible to wait until you rise up and then exit.
- Options for trading:
- Futures: there are fewer options
- CFDs: they include lots of different assets, commodities and currencies
- Minimum deposit amount or “trade size”:
- Futures: you need a larger initial investment
- CFDs: you can start with a lower trade size
- Cost of trading and rates:
- Futures: costs are usually lower
- CFDs: fees are higher
- Use of leverage:
- Futures: nonexistent leverage
- CFDs: existing and available
About Contracts for Difference
It is possible that you have seen the acronym CFD now and then if you entered eToro before. Before we come back to it, we must say that CFDs on eToro are only possible if you are short-selling or leverage over x2 (although this is not even available on the platform).
We will also explain terms like short-selling and leverage, in case you are interested in day trading cryptocurrency or more advanced operations.
With CFDs you can operate on the platform even if you are “in red” or don't have a positive balance. For instance, you have the conviction that the Gram will go down, so you obviously think “if it is going to depreciate or go down in price, I'll simply wait until it does”. However, if you are convinced that it is going down, why not making some profits?
You can accomplish that by “going short”. Here's how it works:
- You ask someone for a loan of, let's say, 100 units of Gram, which cost $ 5,000 at the moment (these numbers are made imaginary)
- Then, you get $ 5,000 by selling them at their price in the market
- The Gram devaluates from $ 50 to $ 30
- You buy all 100 units once again, but at the current value, $ 3,000
- You return the 100 units
- The difference is yours, so, you will have earned $ 2000
Take into account that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Gram you can also earn money if you foretell it will go down.
Investment strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as buying and holding or day trading (and using price volatility to your advantage), for naming just a few.
If you are just starting in the world of trading, I suggest something in the middle: when you open your position, set a dynamic stop loss 15-20% below the top price, and let the rest happen on its own.
Therefore, 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.
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 is more realistic.
And when you have more experience, you can take your first steps with advanced investment strategies, such as using leverage or going short to profit from bear markets.