Contents
eToro is an outstanding broker for those who want to purchase EOS from USA
Why do we recommend it?
- It is uncomplicated and user-friendly
- Allows to replicate investment tactics
- Allows short-selling
- You can trade leveraged
- There are uncountable possibilities for investments
Official main site: www.etoro.com/eos
You should definitely consider eToro in case you are interested in buying EOS from USA.
eToro is popular for making “social trading” a trend, a revolutionary form of investing in which investors can replicate the movements of other traders who have been generating income over time.
If you are still a newbie or haven't gained much investment experience, eToro is great for you. You can rest assured that you are doing a smart investment move when replicating those from subjects with a great deal of expertise. And for those skilled investors willing to share their techniques with others, eToro rewards your knowledge with money.
Another thing to mention is how manageable the platform is, which turns out perfect for new users that are learning all about the trading world.
About Contracts for Difference
If you already accessed eToro, you must have noticed that the acronym CFD appears all the time. We will come back to it, but you should know first that cryptocurrency trading on eToro is only CFD if you short sell.
We will also refer to terms like leverage and “going short”, in case you are considering day trading cryptocurrency or other more advanced practices.
The good thing about eToro is that it lets you bet both “in the black” and “in negative”. Let's say that you believe that the EOS will fall, so perhaps it is obvious to think “if it is going to depreciate (go down in price), I'll just wait and go when it has gone down”. Nevertheless, if it really falls, it might mean extra money for you.
You can do by “going short” which consists in something like this:
- You ask someone for a loan of, let's say, 100 units of EOS, which total price at that moment is $ 5,000 (these numbers aren't real)
- You earn $ 5,000 by offering them at the market price
- The EOS devaluates from $ 50 to $ 30
- You buy the 100 units again, but their total current value is now $ 3,000
- You return the 100 units to the loaner
- The rest is yours, so, you will have earned $ 2000
It all seems more tricky than it really is. Just consider that by trading in EOS on eToro, with CFDs you can make a profit if you foretell downs in the price.
BTW, do you know what leverage is? Just in case, we'll put it simply:
the good thing about trading is that it lets you invest more money than you can have in a given time. For instance, if you enter with $ 100 and you use x2 leverage, you will be really investing $ 200.
Leverage, Take Profit and Stop Loss
Let's pretend that you are confident that EOS will rise, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
You could consider asking for a credit at your bank or other financial company, but it is a process that takes time, and by the moment you receive the money, EOS might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is just like a loan, but it is only a few clicks away! eToro allows you to operate with much higher amounts than what you actually have on the platform's wallet. It is simple, before investing you will see the different options as in the image below:
Trading with other assets allows you to use more leverage. The reason is that leverage is regularly for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's see how leverage works with the previous example:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was “borrowed” from eToro).
- A few days later, EOS does rises, as you thought, 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.
- The $ 1k of leverage will be deducted, and 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 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
But not everything is wonderful. If all goes as you intended and the price rises, you will make profits. Nevertheless, if the asset decreases, you will also lose more money really fast.
For instance: 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 essential to know other two terms: Take Profit and Stop Loss.
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 request eToro to close your operation 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 going up, which could make you lose it all.
Stop Loss is even more important, especially if you trade with leverage, because a reduced loss with leverage can have a significant impact on your wallet. Always remember to mark a Stop Loss lower than that suggested by eToro.
Exchange-Traded Funds
Have you heard about Exchange-traded funds? They are passively managed funds, known for merging the benefits of stocks and mutual funds, because they can be exchanged at any moment in the market, but have much more investment possibilities and the fees are significantly lower.
ETFs
ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a merge between stocks and mutual funds, including the best features of both. They are publicly traded and therefore can be exchanged at any time at market price. However, their main benefit is that they are more diversified compared to stocks, and have lower fees.
About Index Funds
Are most adequate for those interested in long-term trading, especially for beginners. If you don't need to use the amount of money you'll invest in less than five or ten years, index funds offer you variety and lower risks.
You may have a different idea, but very few fund managers can beat their benchmark return (although you have probably heard of managers who obtain huge profits).
But putting aside some unusual cases, not everything is as good as it sounds: when someone brags about having beaten the index, they have probably done so for a short time, or charges so many commissions that it ends up being better for you to index (whit minimal commissions). Besides, if something happened once or twice, it doesn't mean necessarily that it will happen again in the future.
Index funds offer these two advantages: although in the long term, they usually beat active managers, and the rates are minimal.
Currency market
Forex or currency trading allows obtaining profits by exchanging one currency for another.
For instance, in case you decide to trade EUR and USD, you speculate how many dollars it will take to buy a euro, with the expectation that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Suppose you entered when the price of one euro is 1.10 USD and you leave when it is worth 1.15: consequently, you will gain that margin.
Perhaps you already deducted this, but operating with foreign exchange requires a large capital, because prices never increase that much, or using a lot of leverage, which is always a risk. In case you are a novice in trading, it is not a good idea to begin with Forex, because it's not the safest alternative.
eToro allows exchanging the most known currency pairs but take into consideration that in Forex sales are made through CFDs, therefore you won't own the real asset.
eToro payment methods
Within the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is a very easy process. You just have to go to “Deposit funds”, type the amount and choose your payment method.
Consider that for security reasons, you must be the holder of the account or the credit card.
You can start with a $ 200 deposit, and there is a limited maximum for unverified accounts. So, if your intention is to deposit higher amounts, you will need to 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. That is why we suggest, if possible, using USD from the beginning.
Is eToro safe for purchasing EOS?
eToro is very meticulous with the data about past performances from investors, and its reliability has been independently tested several times.
eToro complies with all the demanding policies of the European Union, legislation in which it is found. Specifically, its main headquarters is in Cyprus, where it is certified 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 (MiFID) in Europe, and by the Financial Conduct Authority (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, you can be sure that your finances are safe.
No less important is their excellent customer service. You can use the ticketing system, an online chat, and they also have a phone number available for assistance.
How does a virtual account work?
If you are taking your first steps as an investor, the option to operate in “demo” mode will be helpful. Setting a virtual account and operating with fictional money is very simple.
A virtual portfolio can be a good way of practicing before starting to operate with real money. When you create your demo account, you will begin with a virtual amount of $ 100.000, to operate with a variety of financial instruments available on the platform, besides EOS.
The first attempt is not usually that good. But you can ask support to deposit back the virtual $ 100k to your portfolio, and the second try you should do better.
But remember that investing is mainly about being cold-minded, and using a practice account can have an adverse effect. It is completely different to risk your own money than to trade with a false balance that you don't mind losing.
And of course, the virtual mode is kind of absurd if you intend to invest in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years to see the outcome. Virtual accounts may be helpful for practicing before investing in the short or medium-term.
How to use eToro
We already said that one of the best features of eToro is that the platform is very intuitive and easy to use. It isn't necessary to read a lot or have previous knowledge to start trading.
Everyone who has used social networks like Whatsapp or Facebook, knows enough to use eToro.
We will explain the registration process and the different sections that you will see.
You will have to provide some personal information when registering.
Before you end up with the sign-up process, you will also have to answer some questions about your previous trading activities.
But you don't need to worry: it is not 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 instance, if you have never invested before, they will not suggest that you invest in futures.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's get to know the different 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 a security and you are waiting for it to decrease.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the different financial instruments that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Raw materials
- Currencies
- Index funds
In “People” are all the profiles and historical performances of other users, and you can replicate their movements with just one click. This is where the “social trading” term is best applied.
In this section, you will be able to search and find users according to your interests. You can apply filters like country, average profits, or financial instruments. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you invest $ 1000 and the user puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
The advantage of using CopyPortfolios instead of copying individuals is that this way the risk will be more diversified. There are all kinds of portfolios that you can identify easily and are classified by sectors. Therefore, in case you suspect a specific industry, like e-commerce or drones, will have good incomes in the future, you can look for that specific portfolio and do your investment.