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eToro, our favorite option for investing in Stellar in Egypt
Some of its benefits are:
- User-friendly and straightforward
- You are able to replicate investment strategies
- Allows you to go short
- You can leverage
- There are uncountable possibilities for investments
Official site: www.etoro.com/stellar
In case you are considering it, eToro is the best way to obtain Stellar from Egypt.
This broker is famous for making “social trading” a trend. Social trading is an ingenious way of investing in which traders can emulate the moves of other investors who have been generating income over time.
eToro has solutions for you, especially if you are still a novice user in trading, because it automatizes your investment by imitating moves from other experienced people with a very long profit history. On the other hand, if you are an expert in the field willing to share your methods with the community, eToro pays you for it.
Besides, this platform is completely manageable, great for a user who wants to begin in the Stellar world, without stressing over lots of diagrams and figures.
About Contracts for Difference
If you browsed eToro previously, you must have noticed that the initials CFD appear repeatedly. Before we explain this further, you must know that CFDs on eToro are only possible when you are short-selling or select leverage over x2 (but this is not even an option on the platform).
We will also refer to concepts like going short and leverage, in case you are interested in day trading cryptocurrency or more advanced practices.
Even if you aren't “in the black”, you can still operate on eToro with CFDs. Let's say that you believe that the Stellar will go down, so perhaps you think that the best thing to do is wait until it does and then go in. Nevertheless, if you really think that it's going down, why not take advantage of that and making money?
You can accomplish that by “going short”. Basically, it works like this:
- Someone lends you, for example, 100 units of Stellar, valued at a total of $ 5,000 (these numbers are totally made up)
- Then, you get $ 5,000 by offering them at their price at that moment
- The Stellar devaluates from $ 50 to $ 30
- You purchase the 100 units again, but their current value is now $ 3,000
- Then you return the 100 units
- You will have made $ 2000, since you keep the difference
Consider that it is much easier than it sounds: we can just say that by trading in Stellar you can also earn money if you predict the downs.
What's the difference between CFDs and futures?
What are the main differences between CFDs and Futures?
- Who is the counterparty? In the case of Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- When do they expire? Futures have a determined expirationdate. CFDs don’t have expiry date
- Variety of options for trading Futures include fewer options to trade. CFDs include a wide range of possibilities.
- Minimum investment amount or “trade size” Being higher numbers, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher.
- Use of leverage With Futures, it isn’t possible; while with CFDs it is.
Exchange-Traded Funds
What do you know about Exchange-traded funds? They are similar to index funds and are known for merging the benefits of stocks and mutual funds: they can be exchanged at any moment in the market, but have much more variety and the fees are significantly lower.
Foreign exchange market
Forex or currency trading allows obtaining profits by converting one currency for another.
If you decide to exchange the EUR/USD pair, you buy euros at their price in dollars, thinking that the euro will rise compared to the dollar. Therefore, if you purchased each euro at 1.15 USD and you sell them back when they are worth 1.20 USD, that margin will be yours.
As you may have deduced, this type of trading requires investing a lot, since fluctuations are typically low, or using a lot of leverage, which implies an extra risk. If you are just starting to trade, it is not a good idea to begin with the currency market, because it is very risky and complex.
You can exchange with almost all well-known currency pairs on eToro but consider that in Forex trading sales are always made through CFDs, so you will not be the owner of the real asset.
Stocks
The most common financial instruments are stocks: these are portions in which an enterprise that chooses to go public is divided. You may be a shareholder of a company and have returns, but first, you should know where to invest your money.
Basically, there are two kinds of shares: those of companies that distribute their earnings among the shareholders and those that don't. But that doesn't mean that those of the second type have less to offer. If a company does not pay every year but has a lot of potential, it is also worth investing in it, since selling the shares eventually could pay a lot more.
When trading on eToro, if you choose a company that distributes dividends, you will receive them in your account, and you can withdraw your money or reinvest it. Our suggestion is, if you don't have financial urgencies, that you take advantage of compound interest and reinvest it in the company.
Consider that on eToro you can use leverage to “dope” your trades, but in that case, you will not receive returns as the trade would be a contract for difference. For long-term investments, it is better not to use leverage: you can end up losing money, because you will not get interest and, on top of that, you will have to pay fees while your operation is open.
Commodity market
The main benefit of investing in commodities is that prices are more stable than those of other assets. In fact, their security is what makes people often invest in raw materials, to take refuge from financial insecurities or fears of inflation. Despite that, the prices of commodities are defined by their demand. Therefore, if a given economic situation causes higher demand, the prices will also rise.
Take into account that commodities don't pay dividends. Therefore, the only prospective income would come from a sale of the asset.
Raw materials are generally categorized 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 goods such as coffee, rice, soy, or sugar.
Exchange-Traded Funds
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are traded in the market like stocks, during the day. Their main benefit is that they are more diversified compared to stocks, and have lower fees.
Index Funds
This is the best option for people who can invest in the long term, mostly for those who are starting to trade, because it is less expensive, diversified, and safer.
You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers have done it, apart from some famous cases.
In practice, all that glitters is not gold: if a fund manager achieves to beat the market, it is only for a short period or on a specific occasion. Or perhaps they would charge very high rates and indexing would be a better decision (with minimal commissions).
With index funds, you won't be concerned about that: although in the long term, they frequently beat active managers, and the rates are lower than you imagine.
Payment methods on eToro
Within the payment options available on eToro are: 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. Just go to “Deposit funds”, type the amount and choose a payment method from the previous ones.
Remember that for security policies, you need to be the owner of the account or the credit card.
The minimum amount you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified. Therefore, in case you plan to operate with larger sums, contact Support beforehand to verify your account.
Also, remember that you can make the transfer in any currency because eToro converts it to USD, although it charges a fee, so it is preferable to make the transfer directly in USD.
eToro Interface
We mentioned previously that eToro is very friendly and intuitive. Anyone can start using it without previous knowledge or long explanations.
You won't have any issues with the interface if you are familiar with any other social network.
We will explain, roughly, the registration steps and the different tabs that you will find.
You will have to fill in some requested data when registering.
Before you end up with the sign-up process, you will also have to answer some questions about your previous investment activities.
But don't feel intimidated. The objective is to know more about you and determine which financial instruments they should recommend according to your knowledge and experience.
Let's review the different functions of the platform.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. Just click the tab and you will be able to set it. This is helpful in case you want to buy 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 information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we already discussed the kinds of assets on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Forex
- Index funds
In the section “People”, you will find the profiles of eToro users and their historical performance. This is where the term “social trading” makes sense since you can copy the strategies of your preferred traders.
You can search for those users that you find more interesting: by risk level, types of financial assets, average earnings… You just have to type the amount you want to invest and eToro itself will be in charge of replicating the movements of the selected investor, in proportion. “In proportion” 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 the same company.
Also, here you will see CopyPortfolios classified into three categories, Top Trader, Market, and Partner.
Remember that in some cases, you might prefer copying to CopyPortfolios than to particular traders, because the former offer more diversity. Besides, the portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector is going to succeed in the future? Then look, because surely there is a CopyPortfolio about it.