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Why we reccomend eToro for acquiring Bitcoin Cash from Egypt?
Why do we recommend it?
- Allows to copy investment strategies
- Allows you to short sell
- User-friendly and simple
- eToro offers leverage
- There are tons of products you can invest in
Official homepage: www.etoro.com/bitcoin-cash
You should certainly consider eToro if you are thinking about acquiring Bitcoin Cash from Egypt.
“Social trading”, a relatively new form of investing by replicating techniques and strategies from other experienced investors, has become popular because of eToro.
eToro is very useful if you are still a beginner in trading, because it automatizes your investment by replicating moves from those who have been doing it for years. On the contrary, if you are an investor and decide to share your methods with other traders, eToro rewards you with money.
It is also worth mentioning how accessible is this platform, excellent for new traders who are starting with Bitcoin Cash.
About ETFs
Exchange-Traded Funds or ETFs are a type of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds. They are publicly traded and therefore can be bought and sold at any time at market price. However, their main benefit is that they offer more alternatives compared to stocks, and the rates are much lower than those of an actively managed fund.
Forex trading
What is known as Forex trading consists in the trading of currencies. Put differently, is the conversion between currencies to make a profit through the operation.
If you decide to trade euros and dollars, you speculate how many dollars it will take to buy a euro, expecting that the first currency (the euro) will increase compared to the second (the dollar), to make a profit by selling it. Let's say you entered when the price of one euro is 1.10 USD and you close when it reaches 1.15: that margin is yours once you make the operation.
You may be thinking that trading with currencies requires investing considerable amounts, and you're right, because fluctuations are usually minimal, and often you will need to use high leverage (which is an important risk). Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.
eToro allows exchanging the most common currency pairs. However, remember that Forex functions with CFDs, which means the underlying asset won't be yours.
Shares
Stocks are the most common securities. Some corporations decide to split into portions and have many shareholders. By investing money in them, you can own a portion of a company and obtain returns.
We can classify stocks into two different kinds: those of companies that distribute their earnings among the shareholders and those that don't. Does that mean that you should only consider the former? No, of course not: if a company does not pay out dividends but has a lot of potential, it can still represent a good inversion, since the capital gain you will get from the sale of the shares can be much greater than what you would earn through dividends.
If you invest in shares that pay out dividends, you will receive them into your account on eToro. Therefore, you can withdraw that money or you can choose to reinvest it. Nevertheless, you can benefit a lot from compound interest, so we would recommend reinvesting in the company if you don't need the money immediately.
Consider that on eToro you can “dope” your trades with leverage, but in that case, you will not receive returns as the trade is a contract for difference. For long-term investments, it is better not to use leverage: you can end up losing money, since you will not get dividends and also you will have to pay fees while your operation is open.
ETFs
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the benefits of stocks and mutual funds, because they can be exchanged at any moment in the market, but offer much more diversity and considerably lower rates.
Is eToro safe for purchasing Bitcoin Cash?
eToro is very rigorous with the data about past performances from users, and its integrity has been tested once and again by independent organizations.
The main headquarters of eToro is in Cyprus, and the platform is certified by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 from its client's debts, including those from Egypt. Furthermore, eToro follows all the strict regulations of the European Union.
eToro is backed by the European Financial Instruments Market (MiFID), and by the Financial Conduct Authority or FCA in the U.S. Apart from the above, it has a trajectory of fifteen years, with more than 20 million users around the globe. So, you can be sure that your finances are safe.
No less important is their excellent customer service. They have a phone number for assistance, a ticketing system, and a live chat.
Payment methods on eToro
Within the payment options available on eToro are: bank transfer, PayPal, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Neteller, and Skrill. Making a deposit on eToro is so simple: go to “Deposit funds”, choose an amount and the payment method you prefer.
(Keep into consideration that you must be the account or credit card holder, for security policies).
The minimum amount allowed is $ 200, and there is a maximum limit for unverified accounts. So, if you aim to operate with much more, you should contact Support to verify your account.
Finally, know 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.
Futures Vs CFD
How are CFDs and Futures different?
- Who is the counterparty? With Futures, the counterparty is another trader. In CDFs, it’s the brokerage, in this case eToro
- Date of expiration Futures have a determined expirationdate. CFDs don’t expire
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum investment amount or “trade size” Being higher figures, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher.
- Use of leverage With Futures, you can’t leverage; while with CFDs it is always possible.
About Contracts for Difference
You probably have found the initials CFD now and then if you already registered on eToro. We will explain its meaning now, but first, you should know that cryptocurrency trading on eToro is only CFD when you are short-selling.
We will also refer to terms such as going short and leverage, in case you are considering day trading cryptocurrency or more advanced operations.
The advantage of eToro is that it allows you not only to bet “in the black”, but with CFDs you can also bet “in red”. For example: you have the certitude that the Bitcoin Cash will go down, so probably you consider that it is better to wait until it does and then go in. However, if it really falls, it might mean extra money for you.
You can do that by “going short”. Here's how it works:
- You ask for a loan of, let's say, 100 units of Bitcoin Cash, which cost $ 5,000 at the moment (obviously, these numbers aren't real)
- Then, you earn $ 5,000 by selling them at their price at that moment
- As you presumed, the price falls, and the unit of Bitcoin Cash now costs $ 30 instead of $ 50
- Again, you purchase the 100 units, but at the current value, $ 3,000
- Now you return the 100 units
- The rest is yours, so, you will have earned $ 2000
Keep in mind that it sounds much more tricky than how eToro CFDs actually work: we can just say that by trading in Bitcoin Cash you can also make money if you anticipate the downs.
eToro Interface
We said before that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.
Everyone who has previously used Twitter, Pinterest or any of the most common social networks, knows enough to use eToro.
We will explain, roughly, the registration steps and the different sections that you will find on eToro.
You will have to provide some personal data when registering.
Before you end up with the sign-up process, you will also have to answer some questions about your previous trade experience.
However, it's not like they're testing you or anything. They are only measures to know how much knowledge you have and what type of assets they can recommend. For example, if it is your first experience in the investment world, they will not recommend that you invest in futures.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Let's review the different tabs of the platform.
In the “Set Price Alerts” tab, you have, as its name indicates, the possibility to set alerts on the price of certain assets. You only need to click on the three points at the end of the line and you will be able to program a price alarm. It is a very useful tool for when you are after a security which price is decreasing, but it seems to you that it has not finished falling yet.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. As we discussed in this guide, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
In the tab “People”, you will find the profiles of eToro users and their past performance. This is where you can duplicate with just one click the movements of your preferred investors.
Using the search box, you can find the users that you find more interesting: by risk level, types of financial instruments, average earnings… You just have to choose the amount of your investment and eToro itself will be in charge of replicating the movements of the selected investor, in proportion. This means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your money in the same asset.
Finally, you will see the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
Remember that in some cases, it might be better to copy from CopyPortfolios than to individuals, since you avoid putting all your eggs in one basket, or in other words, risk is more diversified. There are all kinds of portfolios that you can recognize easily and are divided by sectors. Therefore, if you suspect a specific sector, like biotechnology or oil, will prosper in the future, you should look for that specific portfolio.
Virtual portfolio: How does it work?
If you are beginning as an investor, you can start by practicing with a “demo” option. Setting a virtual account and operating with fictional money is very simple.
This is a great tool for those who want to give it a few tries before trading with real money. With your virtual account, you will begin with a $ 100,000 balance (which of course, is fake) to do all the operations that you can think of: not only with Bitcoin Cash, you can also create a diverse portfolio.
Don't worry, since if you lose all your virtual funds, you can contact support so they can add back the $ 100k to your demo account and you can try again.
But keep in mind that investing is mainly about being cold-minded, and using a demo account can have an adverse effect. It is completely different to risk your own money than to operate with virtual funds that you don't mind losing. Besides, investing virtual money can prevent you from learning to control your emotions, as a true investor should.
And of course, the virtual mode is kind of pointless if you want to trade in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years. Virtual accounts may be ideal for practicing short or medium-term operations.