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eToro, our favorite option for acquiring IOTA from Australia
Why do we recommend it?
- There are lots of possibilities for investments
- You can trade leveraged
- It's very user-friendly
- It offers techniques and moves from skilled traders so you can emulate them
- Allows short-selling
Homepage: www.etoro.com/iota
You should absolutely consider eToro if you are thinking about investing in IOTA from Australia.
eToro is well-known for making “social trading” a trend. Social trading is an ingenious way of investing in which traders can emulate the moves of other investors who have been generating income for years.
If you are a novice user or haven't gained much experience in investments, eToro is great for you, since it puts your investment on autopilot by repeating strategies from other experienced people with a very long profit history. Oppositely, if you are an investor willing to share your abilities with other traders, eToro pays you for it.
Another advantage is how manageable the interface is, which turns out perfect for new users that are learning all about IOTA.
In case you still don't know what “leverage” is, we'll describe it briefly: it is the possibility to invest a higher amount than you actually have. That way, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Leverage, Take Profit and Stop Loss
Assuming that, for example, you are sure that IOTA is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and earn higher profits.
You could consider asking for a credit, but it is a process that takes time, and when you receive the money, IOTA might be already so expensive that trading wouldn't be convenient anymore.
Leverage is like a loan, and you will only have to click a few times! eToro allows you to operate with much higher amounts than what you actually have on the platform. Before trading, you will see the leverage options as in the screenshot below:
When trading with other kinds of assets you can use higher leverage. This is because leverage is regularly for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was “borrowed” from eToro).
- Then, turns out that IOTA does rises, as you thought, 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.
- Once the $1,000 from leverage is deducted, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours from the beginning.
With $ 1000 you get $ 400, in other words, 40% more. That's not bad at all, right?
It may sound too good to be true. The thing is, you can also lose. If everything goes according to plan and the price goes up, you will earn profits in little time; but if the opposite occurs, you will also lose more really fast.
Supposing that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but $ 40, because of the leverage. For that reason, when using leverage it is crucial to take into account 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 IOTA at $ 100, you request eToro to close your operation when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to keep waiting in case it keeps going up, which could be a mistake since the price could go down again.
Stop Loss is even more necessary, particularly if you trade with leverage, because a small loss with leverage can be fatal for your wallet. Take into account that eToro will recommend a limit for Stop Loss, but you should set it lower than the platform suggests.
Can you trust eToro?
eToro has been tested by independent organizations once and again to verify its integrity in reporting performance statistics from previous users. The results have always confirmed that eToro is meticulous with the data.
The main headquarters of eToro is in Cyprus, and therefore it is certified by the CySEC or Cyprus Securities Market Commission, which covers debts up to € 20,000 from its clients, including those from Australia. The platform complies, on the other hand, with all the strict regulations of the European Union.
In Europe, it is backed by the European Financial Instruments Market (MiFID), and in the USA it responds to the Financial Conduct Authority (FCA). Besides all these regulations, it should be mentioned that eToro has more than 20 million users around the world, and it has been operating for the last fifteen years. To sum up, we can be confident 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.
eToro payment methods
Within the payment methods available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. Depositing money with eToro is so simple: click “Deposit funds”, set an amount and choose the payment method you prefer.
Consider that for security reasons, you need to be the holder of the account or the credit card.
The minimum amount you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified. Therefore, in case you want to trade with larger sums, contact Support previously to verify your account.
eToro accepts transfers in any currency, but you will have to pay a fee for the conversion to USD. That is why we suggest, if it is in your hands, depositing in USD from the beginning.
What's the difference between CFDs and futures?
How are Futures and CFDs different?
- Who is the counterparty? With Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- Expiry date Futures expire in a variable given date. CFDs don’t expire
- Markets available for trading Futures include fewer options to trade. With CFDs you can trade in several different markets.
- Minimum investment amount Being higher figures, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher.
- Use of leverage With Futures, you can’t leverage; while with CFDs it is always possible.
How to use eToro
We already said that one of the best things about eToro is that the platform is very intuitive and easy to use. It isn't necessary to read a lot or have previous knowledge to start investing.
Everyone who has previously used social networks like Twitter or Pinterest, has enough knowledge to use eToro.
Let's talk about the sign-up process and the different sections of eToro that you should know.
When you open your account, you will have to fill in all the information that eToro asks for: first and last name, address…
Before you end up with the sign-up process, you will also find some questions about your previous trade experience.
But don't feel intimidated. They only intend to find out how much you know and which financial instruments to recommend for you.
Let's get to know the fundamental sections of the interface.
In “Set Price Alerts”, you have, as its name says, the possibility to put alerts on the price of certain assets. This is very helpful when you are after a security that is falling, but perhaps you think that it has not finished falling yet.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and information.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the kinds of assets that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Currencies
- Index funds
In “People” are all the profiles and historical performances of other users, 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 find those traders that you find more interesting. When you choose an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you invest $ 1000 and the user puts 20% of their funds in an asset, the platform will invest $ 200 of your funds 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”.
The benefit of copying to CopyPortfolios instead of individual investors is that this way the risk will be more diversified. Besides, the different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector is going to succeed in the future? Then you will surely find a CopyPortfolio about it.
Investment strategies
You can trade cryptocurrencies using several different methods: from buying and holding to day trading (and benefit from market volatility).
In case you are a beginner in the world of trading, my recommendation 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 after that it decreases to $ 12, your operation will be closed at $ 16-17 and you will make a pretty good profit.
It might sound more appealing to sell when the cost is at its peak, right before corrections, but unless you're clairvoyant, that is not possible. The mentioned strategy is much more down-to-earth and, well applied, it can work very well.
Later on, you will be able to apply more complex strategies, such as using leverage or going short to make money from bear markets.