Contents
Why we reccomend eToro for acquiring Dash from Australia?
Advantages:
- You are able to learn from other investment strategies
- Admits short-trading
- Very intuitive and simple
- eToro allows leverage
- You can make investments in plenty of different products
Homepage: www.etoro.com/dash
You should certainly consider eToro if you are interested in purchasing Dash from Australia.
“Social trading”, a relatively new investment method that consists in replicating techniques and moves from other experienced investors, has become trendy thanks to eToro.
eToro is very helpful if you are still a novice user in trading, since 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 with the community, eToro pays for it.
Another thing to mention is how easy the interface is, which turns out perfect for new users that are learning all about Dash.
Can you trust eToro?
eToro is very meticulous with the data about past performances from traders, and its reliability has been tested once and again by independent organizations.
The main office of eToro is located in Cyprus, and therefore the broker is certified by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 from its client's debts, including those from Australia. Furthermore, eToro follows all the strict requirements of the European Union.
It is also backed by the European Financial Instruments Market (MiFID), and in the USA it is under the control of the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has more than 20 million users worldwide, and it has been operating for fifteen years. In short, we can be certain that our finances are safe.
No less important is their excellent customer service. You can use the ticketing system, an online chat, and they also have a phone number available for assistance.
How to deposit funds into your eToro account
Within the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. Making a deposit on eToro is so simple: go to “Deposit funds”, set an amount and choose the payment method you prefer.
Remember that for security policies, you must be the holder of the credit card or the account.
The minimum you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified. Therefore, if you plan to operate with higher amounts, you should 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.
If you still don't know what “leverage” is, we'll describe it briefly. When trading, it's the capacity of enlarging your investment without putting more money. For example, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Suppose now that you are sure that the price of Dash is about to raise its price, therefore you want to “go long”.
You are certain that Dash will rise, and you have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
You could consider asking for a loan, but you must know that all the process takes time, and when you receive the money, Dash might be already so expensive (if your guess was right) that investing wouldn't be convenient anymore.
Thanks to leverage, you can obtain that amount of money just by clicking your mouse. It's like a loan, but much better: from eToro itself. You will be able to operate with much more money than you actually have on the platform. Before trading, you will find the leverage options as in the image below:
Within other markets, the ability to leverage is greater. The reason is that cryptocurrencies are a value that is invested in the medium-long term, and leverage is used mostly for day trading or short-selling. But let's explain how leverage works with the previous example:
- 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).
- Then, turns out that Dash does increases, as you assumed, and now the price of your investment is $ 2,400 (20% more), 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 from the beginning.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But there's always a drawback. If everything goes ok and the price rises, you will make profits. Nevertheless, if the price falls, you will also lose more money than you invested.
Supposing that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. Because of that, the terms “Take Profit” and “Stop Loss” are fundamental when operating with leverage.
Take Profit is a trading limit you can set for your assets: you program your operation and ask the platform to sell them once they get to a point above the entry price. For instance, you can buy Dash at $ 100 and request that your position is closed automatically when it goes up to $ 120. It is very helpful to avoid being blinded by greed: we would all take a 20% profit when making the investment, but when you reach that 20% it is easy to want some more and put yourself at risk of losing money. It's like you got assured in advance of not doing anything dumb in the future.
Stop Loss is even more necessary, mostly if you use leverage, since a reduced loss with leverage can be fatal for your wallet. Always remember to set a Stop Loss lower than that suggested by the platform.
About ETFs
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are halfway between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and the rates are much lower than those of an actively managed fund.
Shares
Stocks are the most common financial instruments. Some publicly traded companies divide their capital into fractions and have several shareholders. By investing money in them, you can own a fraction of a company and obtain returns.
Basically, there are two kinds of stocks: those of companies that distribute their earnings among the shareholders and those that don't pay regularly. However, this is not to say that the latter have less to offer. If a company does not pay every year but has a lot of potential, you should not give it up just because it does not pay you every year, since selling the shares in the future could pay a lot more.
If you invest in stocks that payout, you will receive the funds into your eToro account, and you can withdraw them or invest back. However, compound interest is magic, so we would suggest reinvesting in the company.
If you invest in stocks on eToro, you can use leverage to “dope” your trades. But it is not advisable, since it would be a CFD and you would not get dividends. Also, as shares tend to be long-term investments, you will have to pay fees during the time your operation is open.
About Index Funds
Are the best option for those interested in long-term trading, especially for beginners. If you don't need to take back your money in less than five or ten years, index funds are a safe option.
Unlike a lot of people think, benchmark returns are very difficult to beat and very few fund managers have done it, apart from some famous cases, like Warren Buffett's.
If a fund manager brags about having beaten the benchmark, they probably did it for a short time or on a specific occasion, or sometimes the charges are so high that indexing would be a better decision (with minimal commissions).
Index funds provide solutions to both concerns: their rates are insignificant and in the long term they almost always beat active managers.
Commodities or raw materials
Most people invest in raw materials because of their stability. While other assets tend to fluctuate more, commodity prices vary less and offer safety against inflation or market volatility. Nevertheless, prices are subject to supply and demand, so if an economic situation produces greater demand for a certain good, its cost will also rise.
Take into account that, unlike stocks, commodities don't pay dividends. So, by trading with these you will only have a further profit by selling them back.
Commodities can be classified into two main types: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals (for instance, aluminum, iron, or zinc), and oil; while the latter are agricultural goods as cocoa, soybeans, rice, or sugar, among many others.
Currency market
Forex or currency trading allows obtaining profits by converting one currency for another.
For instance, if you decide to trade the EUR/USD pair, you purchase euros at their price in dollars, thinking that the euro will increase 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.
As you may have deduced, operating with currencies requires a large capital, because prices rarely increase that much, or using a lot of leverage, which is always a risk. Our advice for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
eToro allows trading with the most popular currency pairs. However, bear in mind that Forex works with CFDs, which means the underlying asset won't be yours.
About Contracts for Difference
If you browsed eToro before, you probably noticed that the acronym CFD appears repeatedly. We will explain its meaning now, but first, you should know that CFDs on eToro are only possible if you go short.
FYI, and if you are thinking about day trading cryptocurrency or other advanced trading operations, below we will also explain terms like leverage and “going short”.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. For example: you believe that the Dash will go down, so perhaps you think that it is better to wait until it does and then go in. However, if it really goes down, it is possible to make some profits out of that.
You can do that by “going short”. Basically, this is how it works:
- You ask for a loan of, let's say, 100 units of Dash, which cost $ 5,000 at the moment (these figures aren't real)
- You make $ 5,000 by selling the 100 units
- The Dash devaluates from $ 50 to $ 30
- Again, you purchase the 100 units, but now they are worth $ 3,000
- You return the 100 units
- You will have made $ 2000, since you keep the difference
Consider that it seems much more tricky than it really is: we can summarize this whole operation by saying that by trading in Dash you can also make money if you anticipate it will go down.
How does eToro work?
We mentioned previously 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 are familiar with any other social network, like Instagram or Facebook.
Let's talk about the sign-up process and the different sections of eToro.
You will have to provide some personal information (like full name or address, for instance) when registering.
They will also ask you about your previous trade experience.
But don't feel like you are taking an exam. The only intention is to know more about you and be clear about which financial instruments they should recommend according to your knowledge and experience.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's review the different tabs of the platform.
“Set Price Alerts” allows you to put alerts on the price of certain assets. You only need to click on the three points at the end of the line and you will be able to program a price alarm. This is very useful when you are after a security that is falling, but it seems to you that it will decrease even more.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we mentioned previously, the six types of instruments on eToro are:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Currencies
- Index funds
The term “social trading” comes to life in the section “People”: there, you can duplicate the movements of the users you find most inspiring with just one click. You'll be able to see all their profiles and performances.
You can search for those investors that you find more interesting: by average earnings, types of assets or risk level, for instance. You just have to type the amount of your investment and eToro will be in charge of replicating the movements made by 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 invest $ 100 of your money in the same asset.
Finally, you will see in this section the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
The advantage of copying to CopyPortfolios instead of individuals is that this way you will diversify the risk. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … You think that a certain sector will prosper in the future? Then look, because surely there is a CopyPortfolio about it.