Contents
eToro, recommended broker for those who want to purchase Tezos from Kenya
Advantages:
- Allows to learn from other investment moves
- Allows you to short sell
- It's very user-friendly
- You can leverage
- There are uncountable investment possibilities
Main site: www.etoro.com/tezos
In case you are interested in obtaining Tezos from Kenya, eToro may be the best way to do it.
This platform is popular for making “social trading” a trend, 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 beginner in trading. You can rest assured that you will be making a smart investment since the site emulates those from subjects with a long profit record. And for those skilled investors willing to share their techniques with the community, eToro rewards your knowledge with money.
Another advantage is how manageable the interface is, which turns out perfect for new users that are learning all about the trading world.
eToro Interface
We said before that eToro is very easy to manage. Anyone can start using it without previous experience or long explanations.
You won't have any problems with the interface if you have used any of the most common social networks.
We will explain, roughly, the registration process and the different sections that you will see on the platform.
You will have to provide some personal data when registering.
Additionally, you will see that they ask you some questions about your experience as an investor.
But don't feel like you are taking an exam. The objective is to know more about you and determine which financial instruments they should suggest according to your knowledge and experience.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's get to know the different sections of the interface.
With the “Set Price Alerts” tool, you'll be able to program an alert when an asset is at a certain price. Just click the tab and you will be able to set it. This is perfect if you want to buy an asset and you are waiting for it to decrease.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find the tabs: “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets that are available on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Commodities
- Forex
- Index funds
In the section “People” are all the profiles and historical performances of other investors, and you can replicate their movements with just one click. This is where the “social trading” term is best applied.
Using the search box, you can find the users that you find more interesting: by risk level, types of instruments, average earnings… Just indicate the amount of your investment and eToro will replicate the movements of 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 balance in that asset.
In this section you will also find the three most popular types of CopyPortfolios, which are Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of individuals is that this way the risk is more diversified. There are all kinds of portfolios that you can find easily and are classified by sectors. Thus, if you suspect a specific sector, such as biotechnology or pharmacy, has good chances to succeed, you can look for that specific portfolio and do your investment.
If you still don't know what “leverage” is, we'll describe it briefly: it is, simply, the possibility to invest a higher amount than you actually have. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
Leverage, Take Profit and Stop Loss
Suppose now that you are sure that Tezos is going to appreciate, thus you decide “going long”.
You are completely certain that Tezos will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
Possibly, you could ask your bank for a loan, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then buy Tezos… But by then it is possible that your prediction was confirmed already and Tezos is at such a high price that it is not worth trading.
With leverage, you can get that amount with two clicks. It's like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro. As in the image below, you will see the different options you have:
Within other markets, the ability to leverage is greater. This is because cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used primarily for short-term operations or day trading. That said, I'm going to explain better how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- A few days later, Tezos does rises, as you thought, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours initially.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
But not everything is wonderful. If all goes as you planned and the asset increases, you will make profits. However, if the asset decreases, you will also lose more money really fast.
Supposing that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but $ 40, because of the leverage. Therefore, when using leverage it is crucial to be familiar with other two terms: 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 purchased Tezos at $ 100, you request eToro to close when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to keep waiting in case it keeps going up, which could be a mistake.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). For that reason, it is essential to set a Stop Loss lower than that suggested by the broker.
Futures Vs CFD
How are Futures and CFDs different?
- Counterparties
- Futures: operations are made with someone else, another investor.
- CFDs: you don't operate with another individual, the counterparty is the broker, in this case, eToro.
- Expiry date:
- Futures: there is an expiry date. When that date arrives, the contract is closed even if you are in red.
- CFDs: there is no expiration date. You can wait for your position to rise before closing.
- Options for trading:
- Futures: there are limited options
- CFDs: you have plenty of options, there are CFDs of practically anything
- Minimum investment amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can get in with a small amount
- Trading costs:
- Futures: costs are usually lower
- CFDs: higher (although they are not excessively high either)
- Leverage:
- Futures: you can't leverage
- CFDs: fully available
Investment strategies
You can operate cryptocurrencies using several methods: for instance, you can buy and hold, or you can day trade (and benefit from market volatility).
My suggestion for those who are beginning to trade is going halfway between the two options: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.
Therefore, if for example you acquire a cryptocurrency at $ 10, it goes up to $ 20 and then falls to $ 12, your position will be closed at $ 16-17 and you will have made a decent profit.
You may be wondering: why not selling back when the price is at its highest? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and is more realistic.
And when you have more experience, you can take your first steps with advanced trading techniques, such as using leverage or going short to make money from bear markets.
Virtual portfolio
Are you taking your first steps as an investor? Using a demo account can be very helpful. Just make sure the virtual mode is set in the top left corner of the page and you can start operating with “fake” funds.
A virtual account can help you to practice and gain experience before starting to operate with real money. When you create your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of assets available on the platform (not only with Tezos).
The first attempt is not usually that good. But you can ask support to replenish the virtual $ 100k to your account.
However, remember that you need to be prudent for trading, and using a demo account can have the opposite effect. It is not the same to risk your real savings than to operate with virtual funds which loss does not suppose any drama.
Evidently, if you intend to invest in the medium or long-term, with earnings almost guaranteed just by replicating a strategy, it is absurd that you waste years investing with a virtual account. On the other hand, short or medium-term trading is perfect to try out with the virtual mode.