Contents
eToro, recommended broking platform for those who want to buy EOS from Nigeria
Advantages:
- There are uncountable investment possibilities
- You can trade leveraged
- It is very easy to operate
- Allows to imitate investment tactics
- You can go short
Main site: www.etoro.com/eos
In case you are considering it, eToro is probably the best way to obtain EOS from Nigeria.
eToro is famous for making “social trading” fashionable. Social trading is a revolutionary form of investing in which users can replicate the techniques of other traders who have been making earnings for years.
eToro is very helpful if you are still a beginner in trading. You can rest assured that you are making a smart investment since the site duplicates 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.
It is also worth mentioning how accessible is this platform, ideal for beginners who are starting with EOS.
About ETFs
What do you know about Exchange-traded funds or ETFs? They are passively managed funds, known for merging the advantages of stocks and mutual funds, because they can be traded at any moment in the market, but include a much wider diversity of assets and considerably lower fees.
Equities
Now let's discuss the most well-known assets: stocks. Stocks are the parts of publicly traded corporations. It is possible to own a proportion of a company and have returns, but first, you should know where and how to invest your money.
We can group stocks into two main types: the ones that payout at the end of every fiscal year to the investors, and those that don't. The former ones are great, of course, but investing in the latter can also be a good idea since the profit you can make by selling the shares can be even larger.
When trading on eToro, if you choose a company that pay out dividends, these will be deposited into your account, and you can withdraw those funds or reinvest them. We suggest, if you don't have financial urgencies, that you take advantage of compound interest and reinvest it in the company.
If you invest in stocks on eToro, you will be able to use leverage. However, we don't recommend that, since it would be a CFD and you would not get dividends. On top of that, equities are usually long-term investments, and you have to pay fees.
ETFs
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for combining the benefits of stocks and mutual funds: they can be traded regularly at market price, but include a much wider diversity of assets and considerably lower rates.
Currency market
What is known as Forex trading consists in the exchange of currencies. In other words, is the conversion between a pair of currencies, and the aim is, evidently, to obtain a benefit out of this.
If you decide to exchange the EUR/USD pair, you buy euros at their price in dollars, with the expectation that the euro will increase compared to the dollar. Then, if you purchased each euro at 1.15 USD and you sell them back when they cost 1.20 USD, you'll be earning that margin.
You may be thinking that trading with currencies requires high investments, and that is correct, because variations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. Our advice for those starting in the world of trading is to choose another market to begin with, since Forex is not the safest.
Most currencies are available on eToro but take into consideration that Forex functions through CFDs, so the underlying asset won't be yours.
If you haven't heard about “leverage”, we'll put it short: it is the possibility to use a higher amount than you actually have. That way, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say now that you are sure that the price of EOS is about to raise its price, and you choose to “go long”.
You are positive that EOS will go up, but you only have $ 1,000 available. Despite that, why miss the opportunity to make more money?
Perhaps you could go to your bank, ask for a loan, wait for it to be accepted and receiving the money, and then buy EOS… However, when you finish doing all that, probably EOS would be already at a much higher price (if your prediction got confirmed), and investing wouldn't be a good idea anymore.
Using leverage, you can obtain that amount just by clicking your mouse. It's exactly like a loan, but much better: you will get it from eToro, which allows you to invest a lot more than you have on the platform. Before trading, you will be able to choose between the different leverage options as in the screenshot below:
With other assets, the ability to leverage is greater. This is because cryptocurrencies are usually medium-long term investments. However, leverage is used primarily for short-term operations or day trading. Let's talk a bit more about how leverage works.
You enter with $ 1,000 and pick leverage x2, then you would really invest $ 2,000, since eToro would put the other $ 1,000 (which is double your initial amount).
A week after that, EOS goes up by 20% and now your investment costs 2,400. 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.
But not everything is wonderful. If all goes as you planned and the price rises, you will make profits. Nevertheless, if the asset decreases, you will also lose more money really fast.
For example: if the price falls by 10%, you do not lose $ 10, but twice that figure, which means $ 20. That is why the terms “Take Profit” and “Stop Loss” are fundamental when operating with 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 purchased EOS at $ 100, you request eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to wait a bit longer 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 necessary, especially when trading with leverage, since a small loss could be tragic for your wallet. Always remember to establish a Stop Loss lower than that suggested by eToro.
Can you rely on eToro?
eToro has been independently tested once and again to certify its integrity in displaying performance statistics from previous users. The results have always confirmed that eToro is rigorous with the figures.
The main office of eToro is in Cyprus, and the platform is approved by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 from its client's debts. On the other hand, eToro meets all the strict policies of the European Union.
eToro responds to the European Financial Instruments Market or MiFID in Europe, 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 all over the world. So, you can be sure that your finances are safe.
Their excellent customer service is also worth mentioning. You can reach them by phone or use their live chat.
eToro payment methods
Within the payment methods 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 very easy. You just need to go to “Deposit funds”, set an amount and choose the payment method you prefer.
Consider that for security policies, you must be the holder of the account or the credit card.
The minimum you can deposit is $ 200 and there is a limit of how much you can deposit if you are not verified. Therefore, in case you want to trade with higher amounts, contact Support previously to verify your account.
Finally, remember that you can make the deposit in any currency since eToro will make the conversion to USD, but charges a commission for it, so it is better to make the transfer directly in USD.
How are CFDs and futures different?
How are CFDs and Futures different?
- Counterparties
- Futures: the counterparty is another investor.
- CFDs: the operations are not made with another individual, but the counterparty is the broker.
- Date of expiry:
- Futures: they have an expiry date. At that moment, the contract is ended even if you are in red.
- CFDs: they don't expire. It is possible to wait until you rise up and then close.
- Options for trading:
- Futures: there are limited options
- CFDs: a lot of variety, there are CFDs of practically anything
- Minimum deposit amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can start with a lower minimum trade size
- Pricing and fees:
- Futures: being higher figures, rates are usually proportionally lower
- CFDs: higher (although not too much)
- Possibility of using leverage:
- Futures: it isn't possible to leverage
- CFDs: fully available
About Contracts for Difference
If you browsed eToro previously, you must have noticed that the initials CFD appear frequently. We will explain its meaning now, but you should know first that cryptocurrency operations on eToro are only CFDs when you are short-selling.
In case you are interested in day trading cryptocurrency or other trading operations, we will also explain terms such as leverage and “going short”.
eToro allows you not only to bet “in the black”, but with CFDs you can also bet “in red”. For instance, you are sure that the EOS will go down, so perhaps you consider that the best thing to do is wait until it does and then go in. However, if you are convinced that it is going down, why not take advantage of that?
You can accomplish that by “going short”. Here's how it works ,roughly:
- You get from a loan 100 units of EOS, which cost $ 5,000 (these are completely made up figures)
- Next, you sell them at their price on the market, $ 5,000
- As you guessed, the price falls, and the unit of EOS now costs $ 30 instead of $ 50
- You purchase all 100 units one more time, but at the current value, $ 3,000
- You give back the 100 units to whoever made the loan
- The difference is yours, so, you will have made $ 2000
It all sounds more tricky than it really is. Just keep in mind that by trading in EOS on eToro, with CFDs you can make a profit when you anticipate the price will fall.
How to use eToro
We mentioned before 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 investing.
Everyone who has used social networks like Whatsapp or Facebook, knows enough to use eToro.
Let's talk about the registration process and the different tabs you will find on the page.
When you register, you will have to enter all the information that eToro asks for: first and last name, address…
To complete your profile, you will have to answer some questions about your experience at investing.
But don't feel intimidated, it is not a test that you have to pass. The only intention is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
Let's review the different functions of the page.
“Set Price Alerts” allows you to set alarms on the price of certain securities. It is a very useful tool for when you are after an asset that is falling, but perhaps you think that it will decrease even more.
In the “News Feed” tab is the most social part of eToro: where users are interacting all the time and sharing valuable information.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we mentioned in this guide, the types of financial instruments that eToro offers are:
- Cryptocurrencies
- ETFs
- Stocks
- Raw materials
- Forex
- Index funds
The concept “social trading” comes to life in the section “People”: that is where you can duplicate the strategies of the users you find most inspiring with just one click.
You can search for those users that best suit your interests: by risk level, types of instruments, average earnings… Just indicate the amount of your investment and eToro will replicate the movements made by the investor you selected, 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 money in that asset.
Also, here you will see CopyPortfolios classified into three categories, Top Trader, Market, and Partner.
The benefit of using CopyPortfolios instead of copying individuals is that this way the 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 … You think that a certain industry will prosper in the future? Then you will surely find a CopyPortfolio about it.