Contents
eToro is an outstanding brokerage platform for those in Australia who want to obtain Bitcoin Cash
Some of its benefits are:
- It is simple and user-friendly
- You are able to copy investment strategies
- Accepts short-trading
- You can leverage
- There are uncountable investment options
Homepage: www.etoro.com/bitcoin-cash
In case you are thinking about obtaining Bitcoin Cash from Australia, eToro is certainly the best way to do it.
“Social trading”, a relatively new form of investing by replicating techniques and strategies from other experienced investors, has become popular thanks to eToro.
eToro is very useful if you are still a beginner in trading, because it automatizes your investment by emulating moves from experienced traders with a very long profit history. And for those skilled investors willing to share their techniques, eToro pays for it.
It is also very convenient how accessible is this platform, ideal for new traders who are starting with Bitcoin Cash.
If you haven't heard about “leverage”, we'll describe it briefly: it is, simply, the possibility to use a higher amount than you actually have. For example, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
About leverage, Take Profit and Stop Loss
Assuming that, for example, you are certain that Bitcoin Cash is going up, and that you have $ 1,000 for “going long”, you must know that you have the option of investing more and making more money.
Possibly, you could ask your bank for a credit, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then purchase Bitcoin Cash… Nevertheless, once you've managed doing all that, probably Bitcoin Cash would be already much higher (if your prediction got confirmed), and investing wouldn't be a good idea at that moment.
Leverage is like a loan, but it is only a few clicks away! eToro allows you to operate with much higher amounts than what you actually have on the platform's wallet. Before trading, you will how much leverage to use as in the image:
Trading with other assets allows you to use higher leverage. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used mainly for day trading or short-selling. Let's talk a bit more about how leverage works.
You enter with $ 1,000 and pick leverage x2, which means you would have $ 2,000 to invest (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A week after that, Bitcoin Cash rises up by 20% and now your investment costs 2,400. So, a wise decision is to sell them back now.
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.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment.
But watch out: if everything goes ok and the price rises, you will make money. Nevertheless, if the price goes down, you will also lose more money really fast.
For instance: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but $ 20, because of the leverage. That is why to operate with leverage it is very important to be familiar with two other concepts: 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 bought Bitcoin Cash at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to wait a bit longer in case it keeps going up, which could be a mistake since the price could go down again really fast.
On the other hand, when trading with 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 establish a Stop Loss lower than that suggested by eToro.
eToro deposit methods
When it comes to depositing money on eToro, there is not much to say, since it is really straightforward. You only need to select “Deposit funds”, set an amount, and choose the payment option you prefer. You can pay with PayPal (available for some countries), bank transfer, credit card, Skrill, or Neteller.
Remember that for security reasons, you must be the holder of the account or the credit card.
You can start with a $ 200 deposit, and if you are not verified you will have a maximum amount allowed. Thus, if your intention is to deposit larger sums, you will need to verify your account previously.
You can make the payment in any currency and eToro will do the conversion to USD. But it is advisable to use USD anyway since the platform charges a fee for the conversion.
About Contracts for Difference
If you already browsed eToro, you must have seen how the acronym CFD appears over and over. Before we explain what this is, you must know that CFDs on eToro are only possible if you are short-selling.
We will also explain concepts such as leverage and “going short”, in case you are interested in day trading cryptocurrency or more advanced operations.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. Let's say that you believe that the Bitcoin Cash will go down, so you obviously think “if it is going to depreciate, I simply refrain from getting in and I'll go in when it has gone down”. However, if it actually falls, you can make some profits out of that.
The practice known as “going short” will allow you to do that. It functions, roughly, like this:
- You ask someone for a loan of, let's say, 100 units of Bitcoin Cash, which cost $ 5,000 at the moment (obviously, these figures are made up)
- You sell the 100 units and earn $ 5,000
- As you thought, it devaluates, and the unit of Bitcoin Cash goes from $ 50 to $ 30
- You purchase the 100 units again, but at $ 3,000
- Then you return the 100 units to the loaner
- You save the $ 2000 difference!
It is far more simple than it may seem. Just take into account that by trading in Bitcoin Cash on eToro, you can make money when you anticipate downs.
How to use eToro
We mentioned previously that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
Everyone who has used Instagram, Pinterest or any of the most common social networks, has enough knowledge to operate with the eToro interface.
We will explain, roughly, the registration steps and the different sections that you will see on the page.
First of all, you will have to enter your personal data, like first name, last name or address.
To complete your registration, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. The only intention is to know more about you and determine which financial instruments they should recommend according to your knowledge and experience.
Let's review the different tabs of the platform.
“Set Price Alerts” allows you to put alerts on the price of certain assets. It is a very useful tool for when you are after an asset 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.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. As we discussed previously, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Raw materials
- Currencies
- Index funds
The term “social trading” makes sense in the section “People”: that is where you can replicate the trading strategies of any user you choose with just one click. You'll be able to see all their profiles and historical performances.
You can search for those users that you find more interesting: by average profits, market or risk level, for example. Just indicate the amount of your investment and eToro will replicate the movements made by 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 money in the same company.
Also, here you will see CopyPortfolios classified into three categories, Top Trader, Market, and Partner.
Sometimes you might prefer copying to CopyPortfolios than to particular investors, because 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 identify easily and are classified by sectors. Therefore, if you think a specific industry, such as biotechnology or healthcare, has a good chance of prospering, you can look for that specific portfolio and do your investment.