Contents
eToro is an outstanding broker for those who are in Thailand and want to buy IOTA
Why do we recommend it?
- It offers other successful investment strategies so you can replicate them
- Allows “shorting” or short-selling
- Very user-friendly and simple
- Leverage is allowed
- There are uncountable investment options
Go to the official website in English: www.etoro.com/iota
In case you are considering it, eToro is probably the best option to obtain IOTA from Thailand.
“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become popular thanks to eToro.
If you are a novice user or do not have much experience in investments, eToro is great for you, since it automatizes your investment by repeating strategies from those who have been doing it for years and making profits. Additionally, in case you are an investor, the platform pays for your knowledge.
Another thing to mention is how intuitive the interface is, which turns out perfect for new users that are learning all about IOTA.
How does eToro work?
As we have referred among the positive aspects of eToro, the best thing about this online broker is its simplicity: anyone can use it without having to read endless explanatory texts.
If you have used any of the most common social networks, you can perfectly use eToro's interface.
We will explain, roughly, the registration process and the different sections that you will see on the platform.
First, you will have to enter your personal data, like first name, last name, address….
Before you end up with the sign-up process, you will also find some questions about your previous trade experience.
But don't worry: it is not an exam. They only intend to know how much knowledge you have and what type of financial instruments they can recommend. For instance, if you have never invested before, they will not suggest that you invest in futures.
Let's see what the different sections of the site are.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. This is perfect in case you want to purchase an asset and you are waiting for it to decrease.
In the “News Feed” tab is the most social part of eToro: where users are interacting all day and sharing valuable information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
In the tab “People”, you can find the public profiles of eToro users and their historical performance. This is where you can duplicate the strategies of the traders that inspire you the most.
You can search for those users that you find more interesting: by average earnings, types of assets or risk level, for example. Just indicate the amount you want to invest and eToro itself will replicate the movements of the selected investor, in proportion. “In proportion” means that if you have $ 1000 and the trader puts 10% of his or her balance in an asset, the platform will invest also 10% of your funds (in this case $ 100) in that same asset.
Finally, you will see the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
The advantage of using CopyPortfolios instead of copying specific investors is that this way the risk is more diversified. Besides, the portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper anytime soon? Then look, because surely there is a CopyPortfolio about it.
Is eToro trustworthy for purchasing IOTA?
Many independent tests have been applied to the platform to prove its reliability in the handling of data from previous users and past performances. Every time, it has been confirmed that eToro is rigorous with the information.
eToro follows all the demanding policies required by the European Union, legislation in which it is found. Specifically, its main offices are in Cyprus, and it is validated by the Cyprus Securities Market Commission or CySEC, which protects up to € 20,000 of the debts that its clients may have with creditors (those from Thailand included).
eToro is backed by the European Financial Instruments Market (MiFID), and by the Financial Conduct Authority or FCA in the USA. 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.
It is also worth mentioning the great customer service. They have a phone number for assistance, a ticket system, and a live chat.
Do you know the term “leverage”? We'll put it simply:
trading allows you to invest more money than what you really have. That is, if you get in with $ 100 and you choose to leverage x2, you will be actually investing $ 200.
Everything you need to know about leverage
Assuming that, for example, you are positive that IOTA is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and earn higher profits.
Possibly, you could ask your bank 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 acquire IOTA… But maybe once you have made all that, your prediction could've been confirmed a long time ago, and IOTA would be already so high that it is not worth trading.
Using leverage, you can get that amount just by moving a finger. It's like borrowing money, but much better: you will get it from eToro, which lets you invest a lot more than you have on the platform. Before trading, you will how much leverage to use as in the image below:
When operating in different markets you can use even more leverage. The reason is that cryptocurrencies are usually medium-long term investments. However, leverage is used mainly for short-term operations or day trading. But let's see how this works with the previous example.
If for your investment of $ 1,000, you use leverage x2, you will be investing $ 2,000. eToro puts the remaining amount to reach that figure.
A few days later, as you thought, IOTA increases by 20% and the value of your investment is now $ 2,400. Ok, don't be greedy, let's sell.
You will have to give back the $ 1,000 of leverage and you will have made $ 400 (since the other $ 1,000 was your initial investment).
As you can see, with $ 1000 you get $ 400, in other words, 40% more. Not bad, right?
Still wondering where the catch is? The thing is, you can also lose. If everything goes as planned, you will make more money in less time; but if the value of the asset decreases, you will also lose more in less time.
For instance: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. That is why the concepts of Take Profit and Stop Loss are fundamental when using 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 bought IOTA at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps rising, which could make you lose it all.
Stop Loss is even more necessary, particularly when trading with leverage, since a small loss could have a significant impact. That is why it is vital to mark a Stop Loss lower than that suggested by the platform.
Payment methods on eToro
Among the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is really simple. You just need to click “Deposit funds”, type the amount and select your preferred method.
Of course, take into consideration that for security reasons, you should be the holder of the account or the credit card.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. Thus, if your intention is to deposit larger sums, you will need to verify your account previously.
Additionally, remember that you can make the deposit in any currency since eToro will make the conversion automatically to USD, but charges a commission for it, so it is preferable to make the transfer directly in USD.
What are ETFs?
What do you know about Exchange-traded funds? 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.
Currency market
Foreign exchange trading or Forex consists, as the name says, in the exchange of currencies. It is the conversion between a pair of currencies, and the aim is, evidently, to obtain a benefit out of this.
In case you decide to exchange euros and dollars, you speculate how many dollars it will take to buy a euro, hoping that the euro will raise its price compared to the dollar. Then, if you bought each euro for 1.15 USD and you sell them back when their price is 1.20 USD, that margin will be yours.
You may be thinking by now that this form of trading requires investing considerable amounts, and you are not wrong, because fluctuation in prices is never that dramatic, and if you use a lot of leverage to counter that, you will take a considerable risk. In case you are a novice in trading, we don't recommend beginning with the currency market, because it is very risky and complex.
You can operate with almost all well-known currency pairs on eToro. However, keep in mind that Forex functions through contract for differences, thus you will not own the real asset.
Shares
The most common financial assets are stocks: these are portions in which a company can be divided. You may obtain a profit with the performance of third-party companies just by putting your money in them. But, obviously, you have to know how to invest.
We can categorize stocks into two main types: those of companies that distribute their earnings among the shareholders and those that don't. However, that doesn't mean that the latter have less to offer. If a company does not pay out dividends but has a lot of potential, you should not give it up just because it does not pay you every year, 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 equities that payout, you will receive the funds into your eToro account, and you can withdraw them or invest back. Nevertheless, compound interest can do magic, so we would recommend reinvesting in the company if you don't need the money immediately.
If you invest in stocks on eToro, you will be able to use leverage. However, it is not advisable, since it would be a CFD and you would not get dividends. On top of that, shares are regularly long-term investments, and you have to pay commissions.
Raw materials
The main attraction of trading with commodities is that their price fluctuates less than that of other assets. Actually, their stability is what makes people often invest in raw materials, to take refuge from economic adversities or fears of inflation. Still, the cost of commodities is determined by 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. So, by investing in them you will only have a further profit by selling them back.
Commodities can be classified into two main categories: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; while the latter are agricultural products as wheat, soybeans, vegetables, or even dairy, among many others.
About ETFs
Have you heard about Exchange-traded funds? 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 the rates are significantly lower.
What's the difference between CFDs and futures?
What are the differences between Futures and CFDs?
- Counterparties
- Futures: operations are made with another trader.
- CFDs: the operations are not made with another individual, the counterparty is the broker.
- Expiry:
- Futures: there is an expiration date. Once the contract expires, it is closed and can't be reopened.
- CFDs: on the contrary, there is no expiration date. It is possible to get back to a good position before closing.
- Trading markets:
- Futures: very little variety
- CFDs: they include lots of different assets, commodities and currencies
- Minimum investment amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can start with a small initial amount
- Trading costs:
- Futures: as you have to pay more in the first place, costs are lower
- CFDs: higher (although they are not excessively high either)
- Use of leverage:
- Futures: you can't leverage
- CFDs: existing and available
About Contracts for Difference
If you have entered eToro previously, you probably realized that the initials CFD appear frequently. We will come back to it, but first, you should know that cryptocurrency operations on eToro are only CFDs when you are short-selling or use leverage higher than x2 (nevertheless, the platform does not even allow this).
If you are interested in day trading cryptocurrency and other advanced practices, you will also find out about terms like going short and leverage.
eToro allows you not only to bet when you are “in the black”, but through CFDs you can also bet “in red”. Let's say that you are sure that the IOTA will go down, so perhaps it is obvious to think “if it is going to depreciate, I'll just wait until it does”. But if you really think that it's going down, why not making some profits?
You can do that by “going short”. More or less, this is how it works:
- You ask someone to lend you, for instance, 100 units of IOTA, which cost $ 5,000 at the moment (these figures are made up)
- You sell them at their price on the market, $ 5,000
- The price is reduced, as you calculated, and the unit of IOTA goes from $ 50 to $ 30
- You purchase the 100 units again, but their current value is now $ 3,000
- You pay back the 100 units to the loaner
- You keep the $ 2000 difference!
It is far more simple than it may seem. Just consider that by trading in IOTA on eToro, you can make a profit when you anticipate downs.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, like buying and holding or day trading, for naming just a few.
In case you are a beginner in the world of investment, I recommend a middle point: placing a dynamic stop-loss (15-20% under the highest price) when you open your operation and wait for it to work.
For instance, if you buy a cryptocurrency when it is worth $ 15, it increases to $ 25 and falls back to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will get a pretty good income.
It may sound more appealing to sell when the price is at its maximum, but unless you're clairvoyant, that is not possible. The mentioned method is much more realistic and it can give great results.
Later on, you will be able to apply more sophisticated techniques, like short-selling or using leverage.
Virtual portfolio
Are you beginning as an investor? Using a demo account can be useful. You just need to set the virtual mode and you can start operating with “fake” funds.
This is a great tool for those who are new to this world and want to put their talents to the test before playing for real funds. With your virtual account, you will begin with a $ 100,000 balance (which of course, is fake) to do your operations, not only with IOTA, but you can also work with a diverse portfolio.
If your performance is not that good and your balance ends at zero, you can always ask eToro support to replenish $ 100k of virtual funds. You'll probably do better on the second attempt.
Keep in mind that trading is mostly about being cautious, and perhaps a virtual account can make you a bit impulsive. It will never be the same as risking your own money.
Evidently, if you are interested in trading in the long or medium-term, it makes no sense that you try the demo mode and waste years waiting to see the results. But it can be ideal if you want to practice short and medium-term trading.