Contents
Why we reccomend eToro for purchasing Tezos from Nigeria?
Pros:
- User-friendly and straightforward
- Allows to imitate investment strategies
- Accepts short-trading
- eToro offers leverage
- There are uncountable possibilities for investments
Homepage: www.etoro.com/tezos
If you are interested in investing in Tezos from Nigeria, eToro may be the best option nowadays.
“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become trendy thanks to eToro.
eToro is very useful if you don't have much experience in trading. You can rest assured that you will be 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 pays for it.
Another thing to mention is how manageable the interface is, which turns out perfect for new users that are learning all about the trading world.
If you are not familiar with the term “leverage”, we'll put it short. When trading, it's the capacity of enlarging your investment without putting more money. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's pretend that you are confident that Tezos will raise its price, and you consider “going long, but you only have $ 1,000 available. However, you have the option of investing more and get higher profits.
Possibly, you could ask a financial company for a credit, put something as collateral, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then purchase Tezos… Nevertheless, once you've managed doing all that, probably Tezos would be already at a much higher price (if your prediction got confirmed), and investing wouldn't be a good idea at that moment.
With leverage, you can obtain that amount really easily. It's exactly 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 platform. You will simply see the different options as in the image below:
When trading with other kinds of assets you can use higher leverage. This is because leverage is most used for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's see how this works with the previous example:
- If you decide 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, Tezos does increases, as you assumed, and now the cost of your investment is $ 2,400 (20% more), so you decide to sell back.
- Once the $1,000 from leverage is deducted, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours initially.
With $ 1000 you get $ 400, in other words, 40% more. That's not bad at all.
But watch out: if everything goes ok and the asset increases, you will make money. On the opposite scenario, if the price goes down, you will also lose more money than you invested.
For example: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but twice that figure, which means $ 20, because of the leverage. That is why to operate with leverage it is very important to be familiar with two other concepts: 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 bought Tezos at $ 100, you can ask eToro to close when it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps going up, which could be a mistake since the price could go down again really fast.
Stop Loss is even more important, particularly when trading with leverage, since a small loss could have a significant impact on your wallet. Take into account that eToro will recommend a limit for Stop Loss, but you should set it lower than that.
Can you trust eToro?
eToro is very rigorous with the information about past performances from traders, and its reliability has been tested once and again by independent organizations.
In the legal aspect, eToro follows all the strict regulations of the European Union, legislation in which it is found. Specifically, its main headquarters is in Cyprus, where it is approved by the CySEC or Cyprus Securities Market Commission, which protects up to € 20,000 of the debts that its clients may have with creditors (those from Nigeria included).
eToro is backed by the European Financial Instruments Market or MiFID in Europe, and by the Financial Conduct Authority (FCA) in the United States of America. Apart from the above, it has a trajectory of fifteen years, with more than 20 million users around the world. So, you can be sure that your money is safe.
No less important is their excellent customer service. They have a phone number for assistance, a ticket system to track any claim, and a live chat.
eToro payment methods
Among the payment options available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is very easy. Just go to “Deposit funds”, type the amount and choose your payment method.
(Consider that you must be the account or credit card owner, for security policies).
The lowest amount is $ 200, and there is a maximum authorized for unverified accounts. Therefore, if you want to trade with larger sums, contact Support beforehand to verify your account.
You can make the deposit in any currency you want and eToro will automatically convert it to USD. However, we suggest depositing directly in USD since the platform charges a fee.
What's the difference between CFDs and futures?
In case you are interested, next you have some major differences between CFDs and Futures:
- Which are the counterparties? With Futures, the counterparty is another trader. In CDFs, it’s the brokerage, in this case eToro
- When do they expire? Futures expire in a variable given date, while CFDs don’t expire
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum investment amount Being higher figures, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher, although not excessively.
- Leverage With Futures, it isn’t possible; while with CFDs it is.
What are Contracts for Difference?
If you already have been on eToro, you probably noticed that the acronym CFD appears all the time. Before we come back to it, we must say that cryptocurrency operations on eToro are only CFDs when you are short-selling or leverage higher than x2 (although this is not even an option on the platform).
If you want to know about day trading cryptocurrency and other advanced operations, next you will also meet terms such as short-selling and leverage.
eToro allows you not only to bet if you are “in the black”, but with CFDs you can also bet “in negative”. For instance, you have the certitude that the Tezos will fall, so you obviously think “if it is going to depreciate (go down in price), I'll just wait until it does”. However, if you are sure that it is going down, why not take advantage of that and earn money?
The operation known as “going short” will allow you to do that. It works, roughly, like this:
- You ask someone for a loan of, let's say, 100 units of Tezos, which cost $ 5,000 at the moment (obviously, these figures are made up)
- You sell the 100 units at $ 5,000
- The Tezos goes from $ 50 to $ 30 (as you presumed, the price decreases)
- You obtain the 100 units again, but at their current price, $ 3,000
- Now you give back the 100 units to the loaner
- You will have made $ 2000, since you keep the difference
It all sounds more complex than it really is. Just consider that by trading in Tezos on eToro, you can make a profit if you foretell downs in the price.
How does eToro work?
As we have mentioned before, one of the best features of eToro is its simplicity: anyone can use it without having to read endless guides.
Everyone who has used Whatsapp, Facebook or any of the most common social networks, knows enough to operate with the eToro interface.
We will explain the registration process and the different tabs that you will find.
You will have to fill in some requested data when registering.
Also, you will have to answer some questions about your experience as an investor.
But don't feel intimidated, there is no right or wrong answer. They only intend to find out about your previous experience and knowledge to know which financial instruments to recommend for you.
Let's review the different tabs of the interface.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. This is perfect in case you want to buy a security that is falling but you believe it will decrease even more.
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 already mentioned the different financial instruments that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
In “People”, you will find the public profiles of eToro users and their historical performance. This is where “social trading” makes sense since you can duplicate the strategies of the investors that inspire you the most.
You can search and find users according to your interests. You can apply filters like risk level, average profits, or financial instruments. When you choose an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will invest $ 200 of your balance in the same asset as well.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
In some cases, it might be better to copy from CopyPortfolios than to individuals, because you avoid putting all your eggs in one basket, or in other words, risk is more diversified. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain industry will prosper anytime soon? Then look, because surely there is a CopyPortfolio about it.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as day trading or buying and holding, for naming just a few.
In case you are just starting in the world of investment, I suggest a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work.
For example, if you purchase a cryptocurrency when it is worth $ 15, then it increases to $ 25 and falls back to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a fine profit.
You may be wondering: why not selling when the cost is at its peak? But that would only work for a psychic or a fortune-teller. The mentioned method is more down-to-earth and can work out perfectly if it is well applied.
Later on, you will be able to apply more complex techniques, such as using leverage or going short.