Contents
Why we reccomend eToro for acquiring Bitcoin Cash from Bangladesh?
Why do we recommend it?
- Allows to learn from other investment tactics
- Admits short-trading
- User-friendly and straightforward
- Leverage is allowed
- Lets you invest in tons of different goods
Official main site: www.etoro.com/bitcoin-cash
In case you are interested in purchasing Bitcoin Cash from Bangladesh, eToro is probably the best option.
“Social trading”, a relatively new investment method that consists in replicating techniques and strategies from other experienced investors, has become popular because of eToro.
If you are still a rookie or haven't gained 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 great deal of expertise. And for those skilled investors willing to share their techniques, eToro rewards your knowledge with money.
Besides, the platform is so uncomplicated, great for a user who wants to begin in the Bitcoin Cash world, without ending up overwhelmed with tons of numbers and information.
Have you heard about “leverage”? Just in case, we'll put it simply:
the good thing about trading is that it allows you to invest more money than what you really have. For instance, if you enter with $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say that you are confident that Bitcoin Cash will rise, and you consider “going long. You have $ 1,000, but you actually can invest more and make 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 acquire Bitcoin Cash… But by that moment it is likely that your prediction was confirmed already and Bitcoin Cash is so high that it is not worth trading.
Leverage is like a credit, but it is only a few clicks away! eToro allows you to operate with much more than what you have on the platform. You will simply see the different options as in the screenshot:
Trading with other assets allows you to use even more leverage. This is because cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used mostly for short-term operations or day trading. But let's deepen a bit more on how all this works.
You start with $ 1,000 and decide to use leverage x2, then you would have $ 2,000 to invest, since eToro would put the other $ 1,000 (which is double your initial amount).
A week after that, turns out that Bitcoin Cash goes up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Bitcoin Cash. So, a wise decision is to sell them back now.
First of all, the 1k $ of the leverage will be deducted. You have $ 1,400 left, of which $ 1000 was yours initially, so the net profit is $ 400.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is quite good.
Still wondering where the catch is? The thing is, you can also lose money. If everything goes as you planned, you will earn profits in little time; but if the opposite occurs, you will also lose more really quickly.
For example: 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 fundamental 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 bought Bitcoin Cash at $ 100, you program 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 make you lose it all.
Stop Loss is even more important, especially if you use leverage, since a small loss with leverage can be fatal for your wallet. Consider that eToro will recommend a limit for Stop Loss, but you should set it lower than that.
Can you trust eToro?
eToro is very careful with the information about past performances from users, and its reliability has been tested several times times by independent organizations.
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 Bangladesh. The platform complies, on the other hand, with all the strict regulations of the European Union.
eToro responds to the European Financial Instruments Market (MiFID), and to the Financial Conduct Authority (FCA) in the USA. Apart from the above, it has a trajectory of fifteen years, with more than 20 million users all over the world. So, yes, it is a safe broker.
No less important is their excellent customer service. You can use the online chat, and they also have a phone number available for assistance.
How to deposit funds into your eToro account
Among the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is really simple. You just need to go to “Deposit funds”, type the amount and choose a payment method from the previous ones.
Remember that for security reasons, you must be the owner of the credit card or the account.
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, so if you plan to operate with larger sums, you should verify your account previously.
eToro accepts deposits or transfers in any currency, but you will have to pay a fee for the conversion to USD. That is why we recommend, if it is in your hands, using USD from the beginning.
About Contracts for Difference
It is possible that you have found the acronym CFD more than once if you entered eToro before. Before we come back to it, we must say that cryptocurrency operations on eToro are only CFDs if you go short.
For your information, and if you want to try at some point day trading cryptocurrency and other advanced practices, we will also cover concepts like short-selling and leverage.
The advantage of eToro is that it allows you to bet both “in the black” and “in negative”. In a hypothetical case: you believe that the Bitcoin Cash will go down, so perhaps you think that it is better to refrain from getting in until it actually falls. Nevertheless, if you are pretty sure that it is going down, why not take advantage of that?
The operation known as “going short” will allow you to do that. It functions, roughly, like this:
- Someone lends you, let's say, 100 units of Bitcoin Cash, which cost $ 5,000 (these numbers are imaginary)
- You make $ 5,000 by selling the 100 units
- The Bitcoin Cash goes from $ 50 to $ 30 (as you predicted, it devaluates)
- You buy all 100 units one more time, but now they are worth $ 3,000
- You return the 100 units
- The rest is yours, so, you will have made $ 2000
It all sounds more complicated than it really is. Just remember that by trading in Bitcoin Cash on eToro, with CFDs you can make a profit when you anticipate the price will fall.
How to use eToro
As we have mentioned before, one of the best things about eToro is its extraordinary simplicity: anyone can trade without having to read endless explanatory texts.
If you are familiar with any of the most common social networks, like Twitter or Linkedin, you can perfectly use this platform.
We will explain the registration steps and the different sections that you will find on eToro.
When you open your account, you will have to fill in all the information that eToro asks for: first and last name, address…
Also, you will have to answer some questions about your experience as an investor.
But don't worry: it's not about passing an exam. They only intend to know how much knowledge you have and what type of financial instruments they can suggest. For instance, if you have never invested before, they will not suggest that you invest in futures.
Next, we will explain the different sections of the site.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. This is helpful in case you want to buy a security that is falling but you believe it will decrease even more.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find the investment tabs: “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the different financial instruments that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Forex trading
- Index funds
In the tab “People”, you will find the public profiles of eToro users and their performances. This is where the term “social trading” makes sense since you can replicate the movements of your preferred traders.
You will be able to find those traders that you find more interesting. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
The advantage of using CopyPortfolios instead of copying 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 … Do you suspect that a certain industry will prosper in the future? Then you will surely find a CopyPortfolio about it.
Trading strategies
There are many cryptotrading methods: from purchasing and holding to day trading (taking advantage of price fluctuations).
In case you don't have much experience trading, I suggest a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work.
For instance, if you buy a cryptocurrency when its price is $ 15, it increases to $ 25 and decreases back to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Hence, you will get a pretty good income.
Perhaps you are wondering: why not selling back when the price is at its highest? But that would only work for a psychic or a fortune-teller. The mentioned strategy is more down-to-earth and can work out perfectly.
Later on, you will be able to apply more sophisticated strategies, like going short to profit from bear markets or using leverage.
Virtual account: How does it work?
If you are taking your first steps as an investor, you can start by practicing with a “demo” option. Setting a virtual account and trading with fictional funds is very simple.
This can be a great way of gaining experience and confidence before trading with real funds. You will have an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you can operate with a variety of financial instruments in your portfolio, not only with Bitcoin Cash.
The first attempt is not usually that good. But don't worry, because you can ask support to deposit back the virtual funds to your portfolio.
Take into account that you should always be cold-minded when trading, nevertheless, using a virtual account might have the opposite effect. It will never be the same as risking your own money.
As you may suppose, the virtual mode is kind of absurd if you want to invest in the medium or long-term (which almost assures you a profit only by replicating an index), since you would be wasting years. Virtual accounts may be useful for trying out before investing in the short or medium-term.