Contents
eToro is an excellent broking platform for purchasing Stellar from Ireland
Advantages:
- It's very easy to use
- Allows to replicate investment strategies
- Allows you to short sell
- eToro allows leverage
- There are uncountable investment possibilities
Official main site: www.etoro.com/stellar
You should absolutely consider eToro if you are interested in acquiring Stellar from Ireland.
This broker is famous for making “social trading” a trend, an ingenious form of investing in which traders can repeat the moves of other investors who have been generating profits over time.
If you are still a rookie or haven't gained much investment experience, eToro is very useful. You can rest assured that you will be making a smart investment since the site emulates those from subjects with a long profit record. Additionally, in case you do have experience in investment, eToro pays you for sharing it with the community.
Besides, this platform is completely intuitive, ideal for a user who wants to start learning about Stellar and trading, without ending up overwhelmed with tons of diagrams and numbers.
Is eToro reliable for purchasing Stellar?
eToro is very meticulous with the data about past performances from users, and its reliability has been independently tested several times.
The main headquarters of eToro is located in Cyprus, and therefore the broker is approved by the Cyprus Securities Market Commission (or CySEC), 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 (MiFID), and to the Financial Conduct Authority or FCA in the USA. 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 money is safe.
No less important is their excellent customer service. You can use the online chat, and they also have a phone number available for assistance.
eToro deposit methods
When it comes to payment on eToro, there isn't really much to say, since it is really straightforward. You just have to click “Deposit funds”, set an amount, and choose your payment method. You can pay with PayPal, bank transfer, credit card, Skrill, or Neteller.
(Keep into consideration that you must be the account or credit card owner, for security reasons).
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. So, if your intention is to deposit higher amounts, you should contact Support to verify your account first.
Also, remember 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.
Are you familiar with the term “leverage”? We'll put it simply:
trading lets you invest more money than you can have in a given time. For instance, if you have $ 100 and you choose to leverage x2, you will be actually investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say now that you are sure that the price of Stellar is going to raise its price, thus you decide “going long”.
You are positive that Stellar will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
You could consider requesting a loan at your bank or other financial company, but you must know that all the process takes time, and by the moment you finally get the money, Stellar might be already so expensive (if your guess was right) that investing wouldn't be convenient anymore.
Leverage is exactly like a credit, and you will only have to click a few times! You will be able to invest (and earn) much more than what you have on the platform. Before trading, you will be able to choose between the different leverage options as in the image below:
Within other markets, you can use more leverage. The reason is that leverage is regularly for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works.
You start with $ 1,000 and decide to use leverage x2, then you would really invest $ 2,000 (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A few days later, as you thought, Stellar has risen by 20% and the value of your investment is now $ 2,400. But you don't want to take too much risk, so it's time to sell.
You need to pay back the $ 1,000. You have $ 1,400 left, of which $ 1000 is the money you invested yourself, so the net profit is $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is quite good.
But watch out: if everything goes ok and the asset increases, you will make profits. Nevertheless, if the asset decreases, you will also lose more money than you invested.
Supposing that the price didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but $ 40, because of the leverage. That is why to operate with leverage it is crucial to know about 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 Stellar at $ 100, you program eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps going up, which could be a mistake.
On the other hand, when using leverage you also have to use Stop Loss, because a small decrease in the price of an asset can have a big impact on your wallet. Always remember to mark a Stop Loss lower than that suggested by the platform.
What are ETFs?
ETFs or Exchange-Traded Funds are a kind of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds, including the best of both. They can be traded like regular stocks, but include a wide diversity of assets and their fees are much lower than those of an actively managed fund.
Forex trading
What is known as Forex trading consists in the exchange of currencies. It's the conversion between currencies to make a profit through the operation.
If you decide to trade EUR and USD, you speculate how many dollars it will take to buy a euro, expecting that the euro will raise its price compared to the dollar. Then, if you purchased each euro at 1.15 USD and you sell them back when their price is 1.20 USD, you'll be keeping that difference.
You may be thinking that trading with currencies requires high investments, and you are not wrong, because fluctuations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. In case you are just starting to trade, it is not a good idea to begin with the currency market, because it's not the safest option.
Most currencies are available on eToro. However, take into consideration that this market functions with contract for differences, so the underlying asset won't be yours.
Commodities or raw materials
The main attraction of investing in raw materials is that prices are more stable than those of other assets. Actually, their intrinsic stability is what makes most investors choose raw materials when facing market volatility or inflation. Nonetheless, the prices of commodities are defined by their demand. Therefore, if a generalized fear of inflation causes higher demand, the prices will also be higher.
Keep in mind that the only intended profit from the investment in raw materials will be the hypothetical capital gain after selling them: unlike shares, these do not pay dividends.
Raw materials are commonly classified into hard raw materials, which include precious metals as gold, silver, or copper, as well as industrial metals, and oil; and soft raw materials, which are agricultural products, like soy, cocoa, corn, or rice.
eToro Interface
We mentioned before that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
If you are familiar with any of the most common social networks, you can perfectly use eToro's interface.
We will explain the registration steps and the different tabs that you will see.
First, you will have to enter all the information that eToro asks for: first and last name, address…
They will also ask you about your previous experience as an investor.
But don't feel like you are taking an exam. The objective is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
As soon as you are registered and have completed your profile, the annoying “incomplete profile” bar will disappear.
Let's get to know the different sections of the site.
With the “Set Price Alerts” tool, you'll be able to program an alarm 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 purchase an asset and you are waiting for its price to fall.
“News Feed” is the more “social” section. There, users can interact and share experiences.
In “Discover” you will find the tabs: “Instruments”, “People” and “CopyPortfolios”. And we already discussed the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Forex trading
- Index funds
In the tab “People” are all the profiles and historical performances of other investors, and you can replicate their strategies with just one click. This is where the “social trading” term is best applied.
In this section, you can search for those users that you find more interesting. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you invest $ 1000 and the user puts 20% of their funds in an asset, the platform will invest $ 200 of your balance in the same asset or company as well.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
Sometimes it might be better to copy from CopyPortfolios than to individuals, because you avoid putting all your eggs in one basket. The different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain industry is going to succeed anytime soon? Then you will surely find a CopyPortfolio about it.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as day trading or buying and holding, for naming just a couple.
My suggestion for those who are beginning to invest is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) when you open your operation and wait for it to work.
This means that if, for instance, you acquire a cryptocurrency at $ 10, it goes up to $ 20 and then decreases to $ 12, your stop loss will take you out of the trade at $ 16-17 and you will have earned a decent profit.
I know it's tempting to look to sell when the price is at its highest, but that is simply not possible. The above strategy is much more down-to-earth and it can give great results.
And when you have gained more experience, you can take your first steps with advanced trading strategies, like short-selling or using leverage.
How does a virtual portfolio work?
In case you do not have much experience investing, the option to operate in “demo” mode may be helpful. Setting a virtual account and trading with fictional funds is very simple.
A virtual account can be a good way of practicing before starting to trade with real funds. When you create your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of assets available on eToro (not only with Stellar).
The first attempt is not usually that good. But you can ask eToro to replenish the virtual funds to your portfolio.
Keep in mind that investing is mostly about being cautious, and perhaps a practice account can make you a bit impulsive. It is not the same to operate with your own money than with virtual funds, which you can lose without a problem.
Finally, the virtual mode is kind of pointless if you intend to invest in the medium or long-term, since you would be wasting years. Demo accounts may be ideal for trying out short or medium-term investments.