Contents
eToro is an outstanding brokerage for those in Australia who want to obtain Ethereum
Why do we recommend it?
- It's uncomplicated and user-friendly
- You can replicate investment tactics
- Allows you to go short
- Leverage is allowed
- It is possible to invest in thousands of other goods
Official homepage: www.etoro.com/ethereum
You should absolutely consider eToro if you are thinking about acquiring Ethereum from Australia.
eToro is well-known for making “social trading” fashionable, an ingenious way of investing in which traders can repeat the moves of other investors who have been generating income for a long time.
eToro is very helpful if you are still a novice user in trading. You can rest assured that you will be doing a smart investment move when replicating those from subjects with a great deal of expertise. Oppositely, if you are an investor willing to share your methods with the community, eToro pays you for it.
Besides, this platform is completely manageable, great for those who want to start in the Ethereum universe, without ending up overwhelmed with tons of numbers and information.
Can you rely on eToro?
eToro has been independently tested once and again to certify its reliability in reporting performance statistics from previous users. The results have always confirmed that eToro is meticulous with the figures.
The main headquarters of eToro is in Cyprus, and the platform is approved by the Cyprus Securities Market Commission (or CySEC), which covers debts up to € 20,000 from its clients. On the other hand, eToro meets all the strict regulations of the European Union.
eToro is backed by the European Financial Instruments Market (MiFID) in Europe, and by the Financial Conduct Authority or FCA in the United States of America. You should also know that it has a trajectory of fifteen years, with more than 20 million users around the globe. So, you can be sure that your finances are safe.
Their customer service functions perfectly. They have a phone number for assistance, a ticket system to track any claim, and a live chat.
eToro deposit methods
Among the payment options accepted on eToro you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. Making a deposit with eToro is so simple: click “Deposit funds”, type the amount and choose your preferred method.
(Consider that you should be the account or credit card owner, for security reasons).
The minimum amount required is $ 200, and there is a maximum limit for unverified accounts. So, if you aim to operate with large amounts, you should contact Support to verify your account first.
Also, know that you can make the transfer in any currency because eToro converts it to USD, but charges a commission for it, so it is better to make the transfer directly in USD.
Futures Vs CFD
If you are interested, here are the major differences between Futures and CFDs:
- Which are the counterparties? With Futures, the counterparty is another investor. In CDFs, it’s the broker (eToro)
- When do they expire? Futures expire in a variable given date. CFDs don’t expire
- Variety of options for trading The market for Futures is narrower. With CFDs you can trade in several different markets.
- Minimum deposit amount or “trade size” Being higher figures, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher.
- Leverage With Futures, it isn’t possible; while with CFDs it is.
In case you still don't know what “leverage” is, we'll describe it briefly: it is the ability to use 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.
About leverage, Take Profit and Stop Loss
Let's say now that you know that Ethereum is going to rise, and you decide “going long”.
You are certain that Ethereum will go up, but you only have $ 1,000 available. Isn't it a shame to miss out on the possibility of making more money?
You could go to your bank, request a loan, put an asset as a guarantee, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then acquire Ethereum… However, when you finish doing all that, probably Ethereum would be already at a much higher price (if your prediction got confirmed), and investing wouldn't be a good idea at that moment.
With leverage, you can get that amount of money just by clicking your mouse. It's just like a loan, but much easier and quicker, and with the benefit that you will be getting it directly from eToro. As in the image below, you will see the different options you have:
When trading in different markets you can use more leverage. This is because cryptocurrencies are a value that is invested in the medium-long term, and leverage is used primarily for short-term operations or day trading. That said, I'm going to explain better how leverage works.
You begin with $ 1,000 and decide to use leverage x2, then you would really invest $ 2,000, since eToro would put the other $ 1,000.
A week later turns out that Ethereum goes up by 20% and now your investment costs 2,400. But you don't want to be too reckless, so you decide, wisely, to sell again.
Obviously, the 1k $ from leverage will be deducted, and you'll have $ 1,400 left, of which $ 1000 was yours initially, so you'll have earned $ 400.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
It may sound too good to be true. The trick is that the risk of losing out also increases. If everything goes as you planned, you will earn profits in little time; but in the opposite case, you will also lose more really fast.
For instance: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but twice that figure, which means $ 20. For that reason, the terms “Take Profit” and “Stop Loss” are so important when using leverage.
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 Ethereum at $ 100, you request eToro to close once it reaches $ 120. That way, you make sure you won't be blinded by greed 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.
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). You always need to establish a Stop Loss lower than that suggested by the platform.
About Contracts for Difference
It is possible that you have seen the term CFD now and then if you already accessed eToro. Before we explain what this is, we must say that cryptocurrency trading on eToro is only CFD when you go short.
We will also explain terms such as going short and leverage, in case you are considering day trading cryptocurrency or other more advanced operations.
With CFDs you can operate on eToro even if you are “in red” or don't have a positive balance. Let's say that you believe that the Ethereum will go down, so you clearly think “if it is going to depreciate, I'll just wait until it does and then I'll go in”. Nevertheless, if it really goes down, it is possible to make some profits out of that.
The practice known as “going short” will allow you to do that. It works, roughly, as it follows:
- You ask for a loan of, let's say, 100 units of Ethereum, which cost $ 5,000 at the moment (these numbers aren't real)
- You sell the 100 units and earn $ 5,000
- The Ethereum goes from $ 50 to $ 30 (as you calculated, it devaluates)
- You purchase the 100 units again, but at $ 3,000
- You give back the 100 units to whoever made the loan in the first place
- The $ 2000 difference is yours
It all seems more complicated than it really is. Just remember that by trading in Ethereum on eToro, you can make money if you anticipate downs in the price.
eToro Interface
We mentioned before that one of the best things about eToro is that the platform is very friendly and easy to use. It isn't necessary to read a lot or have previous knowledge to start trading.
You won't have any issues with the interface if you have used any other social network.
We will talk about how to register and the different tabs you will find on the page.
You will have to fill in some information requested when registering.
They will also ask you about your previous trading activities.
But don't feel intimidated. They only intend to find out how much you know and which financial instruments to recommend for you.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Let's get to know the different sections of the platform.
“Set Price Alerts” allows you to set alarms on the price of certain assets. This is very helpful when you are after an asset which price is decreasing, 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.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the different financial instruments on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Currencies
- Index funds
The term “social trading” comes to life within “People”: there, you can copy the strategies of the best investors. You'll be able to see all their profiles and historical performances.
Using the search bar, you can find the users that you find more interesting: by average profits, 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 of the investor you chose, in proportion. This means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, eToro will invest also 10% of your money (that is, $ 100) in that 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 people 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 is going to have success in the future? Then you will surely find a CopyPortfolio about it.