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eToro is an outstanding broker for those in Australia who want to acquire Binance Coin
Why do we recommend it?
- Allows to copy investment moves
- Accepts “shorting” or short-selling
- User-friendly and straightforward
- eToro allows leverage
- You can make investments in tons of other goods
Official main site: www.etoro.com/binance-coin
You should consider eToro if you are interested in purchasing Binance Coin from Australia.
This platform is popular for making “social trading” fashionable. Social trading is an innovative way of investing in which traders can repeat the moves of other investors who have been generating earnings for years.
If you are still a rookie or do not have much experience in investments, eToro is great for you. You can rest assured that you are doing a smart investment move when replicating those from subjects with a long profit record. And for those skilled investors willing to share their techniques with the community, eToro pays for it.
It is also worth mentioning how easy is to manage the platform, perfect for beginners who are starting in the investment world.
About Contracts for Difference
If you already browsed eToro, you probably noticed that the initials CFD appear all the time. Before we come back to this, we must say that cryptocurrency operations on eToro are only CFDs when you short sell.
We will also explain concepts such as short-selling and leverage, in case you are thinking about day trading cryptocurrency or other more advanced operations.
With CFDs you can bet on eToro even if you are not “in the black” or having a negative balance. Let's say that you believe that the Binance Coin will go down, so you obviously think “if it is going to depreciate or go down in price, I simply refrain from getting in and I'll go in when it has gone down”. Nevertheless, if it really goes down, it is possible to earn some money out of that.
You can accomplish that by “going short”. Basically, it functions like this:
- You ask someone for a loan of, let's say, 100 units of Binance Coin, which cost $ 5,000 at the moment (these numbers are made up)
- Then, you sell them at their market price, $ 5,000
- The Binance Coin devaluates from $ 50 to $ 30
- Again, you buy the 100 units, but now they are worth $ 3,000
- You pay back the 100 units to whoever made the loan
- You keep the $ 2000 difference!
It is far more simple than it may seem. Just keep in mind that by trading in Binance Coin on eToro, with CFDs you can make a profit if you anticipate downs in the price.
Differences between futures and CFDs
Here is a brief comparison between Futures and CFDs, in case you want to know more:
- Who is the counterparty? In the case of Futures, the counterparty is another trader. In CDFs, it’s the broker (eToro)
- Expiry date Futures expire in a variable given date, while CFDs don’t have expiration date
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum investment amount or “trade size” Costs for Futures are higher than costs for CFDs.
- Leverage With Futures, you can’t leverage; while with CFDs it is always possible.
About ETFs
What do you know about Exchange-traded funds or ETFs? They are passively managed funds, known for combining the advantages of stocks and mutual funds: they can be exchanged at any moment in the market, but have much more diversity and considerably lower rates.
Stocks
Stocks or equities are the most popular securities. Some corporations divide their capital into fractions: you can be one of those shareholders, but first, you should know where and how to make your investment.
We can group stocks into two different kinds: the ones that payout at the end of every fiscal year to the investors, and those that don't. The former ones are great, of course, but investing in the latter can be a good idea too since the profit you can make by selling the shares can be even larger.
In the case of eToro, if you choose a company that pay out dividends, you will receive them in your account, and you can collect them in cash or reinvest them. Our suggestion is, if you don't need the money right away, that you benefit from compound interest and reinvest it in the company.
Consider that when investing in shares 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 not advisable to use leverage: you can end up losing money, since you will not get dividends and, on top of that, you will have to pay commissions while your position is open.
Index Funds
Are suitable for those interested in long-term investments, particularly for beginners. If you don't need an amount of money for the next five or ten years, index funds are the safest.
Contrary to what it may seem, it is very hard to beat the market (yes, you have probably heard of investors who obtain huge returns).
But putting aside some exceptional cases, not everything is as good as it sounds: if you hear of someone who has beaten the benchmark, they have probably done so for a short time, or charges so many commissions that it ends up being better for you to index (whit minimal commissions). Also, take into account that past performances do not ensure a future one.
Index funds offer these two great benefits: most of the time, they beat active managers in the long term, and the charges are lower than you imagine.
Commodity market
Most people invest in raw materials due to their stability. While other assets present higher fluctuation, commodity prices vary less and offer safety against inflation or market volatility. However, prices are subject to supply and demand, so if an economic situation provokes higher demand for a certain good, its cost will also go up.
Note that the only intended profit from the investment in raw materials will be the hypothetical capital gain after selling them back: unlike shares, these do not pay dividends.
Commodities can be divided into two main categories: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; and the latter are agricultural products as wheat, soybeans, vegetables, or even dairy.
Forex trading
Forex or currency trading is the exchange between two currencies in order to gain money.
If you decide to trade euros and dollars, for example, you acquire euros and pay with dollars, with the expectation that after buying the first currency (the euro) it will revalue compared to the second (the dollar), to make a profit by selling it. Suppose you entered when a euro is worth 1.10 USD and you exit when it is worth 1.15: that difference is yours once you make the operation.
Perhaps you already inferred this, but trading with currencies usually implies a large capital, because prices never increase that much, or using much leverage, which is a bit like skating on thin ice, as you know. Our advice for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.
You can exchange with almost every currency on eToro but consider that Forex trading works through CFDs, which means the underlying asset won't be yours.
eToro payment methods
When it comes to depositing funds on eToro, there isn't really much to say, since it is pretty simple. Just click “Deposit funds”, set an amount, and choose your payment method. You can pay with PayPal (available for some countries), bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Consider that for security reasons, you must be the owner of the credit card or the account.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. Thus, if you aim to trade with much more, you should contact Support to verify your account first.
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.
Is eToro trustworthy for purchasing Binance Coin?
eToro is very meticulous with the information about past performances from investors, and its reliability has been independently tested several times.
eToro complies with all the strict policies requested by the European Union, legislation in which it is found. Its head office is in Cyprus, where it is validated by the CySEC or Cyprus Securities Market Commission, which protects up to € 20,000 of the debts that its clients may have with creditors, including those from Australia.
eToro responds to the European Financial Instruments Market or MiFID in Europe, and to 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 money is safe.
Finally, their customer service functions perfectly. You can use the online chat, and they also have a phone number available for assistance.
How does a virtual account work?
In case you do not have much experience investing, you can start by practicing with a “demo” option. You only need to set the “virtual” option and you will be able to operate with “imaginary” funds.
A virtual portfolio can help you to practice and gain experience before starting to trade with real money. When you create your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of assets available on eToro (not just with Binance Coin).
Don't worry, since if you lose all your virtual balance, you can contact support so they can add them back to your portfolio and you can try again.
Take into account that trading is mostly about being cautious, and perhaps a demo account can prevent you from controlling your impulses. It is not the same to operate with your own money than with virtual funds, which you can lose without a problem.
And of course, the demo mode is kind of pointless if you intend to invest in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years to see the results. Virtual accounts may be ideal for practicing short or medium-term investments.
How to use eToro
We said before that eToro is very friendly and intuitive. Anyone can start using it without previous experience 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 process and the different tabs that you will find.
You will have to fill in some information requested when registering.
To complete your profile, you will see that they ask you some questions about your experience at investing.
But don't feel intimidated, there is no right or wrong answer. They only intend to find out about your previous experience and knowledge to determine which assets to recommend for you.
Let's review the different functions of the interface.
In “Set Price Alerts”, you have, as its name indicates, the possibility to put alarms on the price of certain assets. This is very useful when you are after a security which price is decreasing, but it seems to you that it has not finished falling yet.
In “News Feed”, users interact and share valuable information.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the different financial instruments on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Currencies
- Index funds
In the tab “People”, you can find the public profiles of eToro users and their performances. This is where the term “social trading” makes sense since you can replicate the strategies of the users that inspire you the most.
Using the search box, you can find the investors that best suit your interests: by average profits, types of assets or risk level, for instance. Just indicate the amount of your investment and eToro itself will replicate the movements of the investor you selected, in proportion. “In proportion” means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your balance in the same asset.
In this part you will also see the three most popular types of CopyPortfolios, which are Top Trader, Market, and Partner.
The benefit of using CopyPortfolios instead of copying individuals is that this way you will diversify the risk. Besides, the 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.