Contents
eToro, our favorite platform for acquiring Zcash from Nigeria
Some of its advantages are:
- Lets you invest in countless of other goods
- eToro allows leverage
- User-friendly and straightforward
- You can copy investment tactics
- Accepts “shorting” or short-selling
Official page in English: www.etoro.com/zcash
In case you are thinking about obtaining Zcash from Nigeria, eToro may be the best way to do it.
eToro is well-known for making “social trading” a trend, an innovative way of investing in which users can imitate the movements of other traders who have been generating income over time.
eToro has solutions for you, especially if you are still a novice user in trading, since it automatizes your investment by emulating moves from those who have been doing it for years and making profits. Oppositely, if you are an investor and decide to share your knowledge with other traders, eToro pays up for it.
It is also very convenient how easy is the interface of this platform, ideal for beginners who are starting with Zcash.
About ETFs
Exchange-Traded Funds or ETFs are a type of passively managed fund, similar to index funds. We can say that ETFs are halfway between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and their commissions are much lower than those of an actively managed fund.
Commodity market
The main attraction of trading with raw materials is that their price varies less than that of other financial assets. In fact, their intrinsic security is what makes people often invest in raw materials, to take refuge from financial insecurities or market volatility. However, the cost of raw materials depends on supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Note that, unlike stocks, raw materials don't pay dividends. Thus, by investing in them you will only have a further income by selling them back.
Raw materials are usually classified 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 products like coffee, rice, soy, or sugar.
About ETFs
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the advantages of stocks and mutual funds: they can be exchanged regularly at market price, but include a much wider diversity of assets and considerably lower rates.
If you are not familiar with the term “leverage”, we'll describe it briefly: it is the possibility 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 rise, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
There's the possibility of requesting a loan, but you must know that all the process takes time, and by the moment you finally get the money, Zcash might be already so expensive that trading wouldn't be convenient anymore.
With leverage, you can obtain that amount just by moving a finger. It's like borrowing money, but much easier and quicker, and with the advantage that you will be getting it directly from eToro. It is really simple, before investing you will see the different options as in the screenshot:
Within other markets, you can use more leverage. The reason: cryptocurrencies are usually medium-long term investments, and leverage is used mostly for day trading or short-term operations. But let's see how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was borrowed from eToro).
- A few days later, Zcash does rises, as you thought, and now the price of your investment is $ 2,400 (20% more), so you decide to sell back.
- 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 initially.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment.
Does it sound too good? The thing is, it can also play against you. If everything goes as planned, you will earn profits in little time; but if the opposite happens, you will also lose more really quickly.
Let's imagine that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but double, $ 40. For that reason, the concepts of Take Profit and Stop Loss are crucial when operating with leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you purchase Zcash at $ 100 and you ask eToro to automatically 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 in the beginning, but when you reach that 20% it is easy to ask yourself “what if this keeps increasing and it is a mistake to exit?”. It's like you made sure now of not acting recklessly in the future.
Stop Loss is even more important, particularly if you trade with leverage, because a reduced loss with leverage can be tragic for your wallet. Consider that eToro will recommend a limit for Stop Loss, but it is better to place it lower than that.
Is eToro safe for purchasing Zcash?
Many independent tests have been applied to the platform to verify its fidelity in reporting performance statistics from previous users. And it has been confirmed every time that eToro is meticulous with the data.
The main office of eToro is located in Cyprus, and the platform is approved by the CySEC or Cyprus Securities Market Commission, which covers debts up to € 20,000 from its clients. On the other hand, eToro meets all the strict regulations of the European Union.
eToro responds to the European Financial Instruments Market (MiFID), and to the Financial Conduct Authority (FCA) in the U.S. You should also know that it has a trajectory of fifteen years, with more than 20 million users around the globe. So, yes, it is a safe broker.
It is also important to mention the good functioning of its customer service. You can reach them by phone or use their live chat.
eToro deposit methods
Among the payment options that eToro accepts you will find: bank transfer, PayPal, credit card, 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”, type the amount and select a payment method from the previous ones.
Consider that for security reasons, you must be the owner of the account or the credit card.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. So, if your intention is to deposit higher amounts, you should contact Support to verify your account first.
Finally, remember that you can make the deposit in any currency you want because eToro will make the conversion to USD, but charges a commission for it, so it is preferable to make the transfer directly in USD.
Differences between futures and CFDs
How are CFDs and Futures different?
- Counterparty
- Futures: the exchange is made with another investor.
- CFDs: the counterparty is the broker (eToro). In other words: you do not “play” with someone else but with the bank.
- Date of expiration:
- Futures: they expire. When that date arrives, your operation is ended even if you are in red.
- CFDs: on the contrary, there is no expiration date. Therefore, you can wait until you get in a good position before closing.
- Variety:
- Futures: it is very limited
- CFDs: they include lots of different assets, commodities and currencies
- Minimum investment amount or “trade size”:
- Futures: minimum investment is higher
- CFDs: you can get in with a lower trade size
- Trading costs and charges:
- Futures: as you have to invest more, rates are lower
- CFDs: costs are higher
- Leverage:
- Futures: it isn't possible to leverage
- CFDs: it is always possible to leverage
About Contracts for Difference
If you browsed eToro previously, you must have seen how the initials CFD appear over and over. We will explain its meaning now, but you should know first that cryptocurrency trading on the platform is only CFD when you short sell or choose leverage over x2 (nevertheless, the platform does not even allow this).
We will also refer to concepts like short-selling and leverage, in case you are thinking about day trading cryptocurrency or other more advanced practices.
Even if you aren't “in the black”, you can still operate on eToro with CFDs. For instance, you have the conviction that the Zcash will go down, so perhaps you consider that it is better to wait until it does and then go in. But if it actually goes down, you can make some profits out of that.
You can do this through what is known known as “going short”. Its operation, roughly, consists in the following:
- You get from a loan 100 units of Zcash, valued at a total of $ 5,000 (these are completely imaginary numbers)
- Next, you get $ 5,000 by selling them at their price in the market
- 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 return the 100 units
- There: the $ 2000 difference is yours
Consider that it seems much more tricky than it is: we can just say that by trading in Zcash you can also make money if you foretell it will go down.
eToro Interface
We mentioned previously that eToro is very friendly and intuitive. Anyone can start investing without previous experience or long explanations.
If you have used before any of the most common social networks, such as Whatsapp or Pinterest, you can perfectly manage eToro's interface.
We will explain the registration process and the different tabs that you will find.
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 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 suggest. For example, if you have never invested before, they will not recommend 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 fundamental sections of the platform.
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 perfect in case you want to purchase a security that is falling but you believe it will decrease more to a certain point.
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 discussed previously in this guide the different financial instruments on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Forex
- Index funds
The concept “social trading” makes sense within “People”: there, you can replicate the strategies of any investor you choose. You'll be able to see all their profiles and performances.
Using the search bar, you can find the investors that best suit your interests: by average earnings, types of instruments or risk level, for example. Just indicate the amount you want to invest and eToro will replicate the movements of 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 also invest $ 100 of your balance in that asset.
Finally, you will see in this section the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of individuals is that this way you will diversify the risk. There are all kinds of portfolios that you can find easily and are classified by sectors. Therefore, if you think 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.
Investment strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as day trading or buying and holding, for naming just a couple.
In case you don't have much experience in investment, I recommend something in between: when you open your position, set a stop-loss order 15-20% under the maximum price, and let the rest happen on its own.
For example, if you buy a cryptocurrency when it is worth $ 15, then it rises up to $ 25 and falls back to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a good profit.
Perhaps you are wondering: why not selling back when the price is at its peak? But that would only work for a psychic or a fortune-teller. The mentioned strategy is completely realistic and can work out perfectly if it is well applied.
Eventually, you will be prepared for using advanced trading strategies, like using leverage or going short to profit from bear markets.
Demo account: How does it work?
Are you beginning in trading? Using a demo account can be useful. You just need to set the virtual mode and you can start trading with fictional funds.
A virtual account can help you to practice and gain experience before starting to operate with real money. When you create your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of assets available on the platform, besides Zcash.
Don't worry, since if you lose all your virtual balance, you can contact support so they can add back the $ 100,000 to your demo account and you can try again.
Take into account that trading is mainly about being cautious, and using a virtual account might have the opposite effect. It will never be the same as risking your own money.
As you may suppose, 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 ideal if you want to practice short and medium-term trading.