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eToro is an excellent brokerage platform for those who are in Egypt and want to obtain Litecoin
Pros:
- It's very user-friendly
- You can imitate other investment strategies
- Allows you to go short
- You can trade leveraged
- There are uncountable products you can invest in
Official site in English: www.etoro.com/litecoin
You should definitely consider eToro in case you are interested in purchasing Litecoin from Egypt.
eToro is popular for making “social trading” a trend, a revolutionary way of investing in which traders can emulate the moves of other investors who have been generating profits over time.
eToro has solutions for you, even if you don't have much experience in trading. You can rest assured that you will be making a smart investment since the site replicates those from subjects with a long profit record. And for those skilled investors willing to share their techniques with the community, eToro pays for it.
It is also very convenient how easy is to manage this platform, perfect for new traders who are starting in the investment world.
How does eToro work?
As we have referred among the positive aspects of eToro, the best thing about this online broker is its simplicity: anyone can invest without having to read endless explanatory texts.
If you are familiar with any of the most popular social networks today, like Whatsapp or Facebook, you can perfectly use eToro's interface.
We will talk about how to register and the different tabs you will find on the platform.
You will have to provide some personal information (like full name or address, for instance) when registering.
During the sign-up process, you will also have to answer some questions about your previous investment activities.
But don't feel like you are taking an exam. The objective is to know more about you and determine 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 get to know the different sections of the page.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. Just click the tab and you will be able to set it. This is perfect if 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.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we discussed before, the trading instruments that eToro offers are:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Forex trading
- Index funds
The concept “social trading” comes to life within “People”: that is where you can copy the movements of any investor you choose with just one click.
In this section, you can search and find users according to your interests. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. If you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will put $ 200 of your funds in the same asset as well.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
The benefit of using CopyPortfolios instead of copying specific investors is that this way you will diversify the risk. There are all kinds of portfolios that you can identify easily and are divided by sectors. Thus, in case you think a specific sector, such as fashion or healthcare, has a good chance of prospering, you should look for that specific portfolio.
Is eToro reliable for purchasing Litecoin?
eToro is very meticulous with the information 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 the platform is certified by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 from its client's debts, including those from Egypt. The platform complies, on the other hand, with all the strict requirements 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. Apart from the above, it has a trajectory of fifteen years, with more than 20 million users around the world. So, you can be sure that your finances are safe.
It is also worth mentioning the good functioning of its customer service. You can use the online chat, and they also have a phone number available for assistance.
How to deposit funds on eToro
Among the payment options available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is really simple. Just go to “Deposit funds”, type a number and choose your payment method.
Of course, take into consideration that for security policies, you need to be the holder of the account or the credit card.
The lowest amount is $ 200, and there is a maximum allowed if you are not verified, so if you plan to operate with larger sums, you should verify your account first.
You can make the deposit in any currency and eToro will automatically convert it to USD. Nevertheless, it is better to use USD anyway since the platform charges a commission for the conversion.
About ETFs
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are somewhere between stocks and funds: they are traded in the market like stocks, during the day. Their main benefit is that they offer more alternatives compared to stocks, and the rates are much lower than those of an actively managed fund.
Commodity market
The main attraction of trading with commodities is that prices are more stable than those of other financial assets. Actually, their security is what makes people often invest in raw materials, to take refuge from market volatility or inflation. Nonetheless, the cost of commodities is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Remember that the only intended profit from the investment in raw materials will come from their further sale because these kinds of assets don't pay dividends.
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 (like aluminum, iron, or zinc), and oil; and the latter are agricultural products, such as wheat, soybeans, vegetables, or even dairy.
What are Contracts for Difference?
If you already have been on eToro, you probably realized that the initials CFD appear frequently. We will come back to it, but you should know first that cryptocurrency operations on eToro are only CFDs when you go short.
For the record, and in case you want to try at some point day trading cryptocurrency or other advanced operations, you will also find concepts such as going short and leverage.
With CFDs you can operate on eToro even if you are not “in the black” or having a negative balance. Let's say that you have the certitude that the Litecoin will go down, so probably you think that it is better to refrain from getting in until it actually falls. Nevertheless, if you are convinced that it is going down, why not making some profits out of it?
You can do by “going short” which consists in something like the following:
- Someone lends you, for example, 100 units of Litecoin, which cost $ 5,000 (these numbers are fictional)
- You sell the 100 units at $ 5,000
- The Litecoin goes from $ 50 to $ 30 (as you predicted, it devaluates)
- You buy the 100 units again, but at $ 3,000
- You pay back the 100 units
- The difference is yours, so, you will have made $ 2000
Keep in mind that it is much easier than it sounds: we can summarize this whole operation by saying that by trading in Litecoin you can also make money if you anticipate the downs.
Trading strategies
There are many ways to operate cryptocurrencies: for instance, you can buy and hold, or you can day trade using price volatility to your advantage.
In case you don't have much experience trading, our recommendation is something in between: when you open your Litecoin position, place a stop-loss 15-20% under the maximum price, and let the magic happen.
For example, if you purchase a cryptocurrency at $ 15, then it increases to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will obtain a fine profit.
Perhaps you are wondering: why not selling back when the cost is at its maximum? But unless you are a psychic, that is just impossible. The mentioned strategy can work perfectly and give good results.
Eventually, you will be prepared for using more advanced investment techniques, such as using leverage or going short.
Practice account: How does it work?
Are you beginning as an investor? Using a demo account can be very helpful. You just need to set the virtual mode and you can start trading with “fake” funds.
This tool is ideal for those who want to put their talents to the test before playing for real money. When you create your account, you will start with $ 100,000 of virtual balance to do all the operations that you can think of: not just with Litecoin, you can also create a diverse portfolio.
The first attempt is not usually that good. But you can ask support to replenish the virtual funds to your account, and the second try you should do better.
Keep in mind that trading is mostly about being cautious, however, using a virtual portfolio might have the opposite effect. It will never be the same as risking your own money.
As you may suppose, if you intend to invest in the medium or long-term, with profits almost assured only by replicating a strategy, it is absurd that you waste years investing in virtual mode. On the contrary, short and medium-term investments are ideal to try out with the demo mode.