Contents
eToro, our favorite broker for investing in NEO in Egypt
Pros:
- Very intuitive and simple
- You can learn from other investment moves
- Allows you to short sell
- eToro offers leverage
- It is possible to invest in tons of other products
Main site: www.etoro.com/neo
You should absolutely consider eToro in case you are interested in buying NEO from Egypt.
This platform is famous for making “social trading” a trend, a revolutionary form of investing in which investors can imitate the movements of other traders who have been making earnings over time.
eToro is very useful if you are still a beginner in trading, because it automatizes your investment by emulating moves from those who have been doing it for years. And for those skilled investors willing to share their techniques with the community, eToro rewards your knowledge with money.
Besides, the interface of the site is so uncomplicated, great for a user who wants to start learning about NEO and trading, without ending up overwhelmed with tons of numbers and information.
About Contracts for Difference
You probably have seen the term CFD repeatedly if you already accessed eToro. We will explain its meaning now, but you should know first that CFDs on eToro are only possible when you go short or leverage above x2 (nevertheless, this is not even available on eToro).
FYI, and if you want to know about day trading cryptocurrency and other advanced practices, you will also meet concepts like leverage and “going short”.
Even if you don't have a positive balance, you can still operate on eToro with CFDs. For example: you believe that the NEO will fall, so you obviously think “if it is going to depreciate, I'll just wait and bet when it has gone down”. Nevertheless, if you are convinced that it is going down, why not making some profits?
You can accomplish that by “going short”. Here's how it works ,roughly:
- You ask someone to lend you, for instance, 100 units of NEO, which cost $ 5,000 at the moment (these numbers are made imaginary)
- Then, you sell them at their price on the market, $ 5,000
- The price falls, as you thought, and the unit of NEO goes from $ 50 to $ 30
- You purchase all 100 units one more time, but at the current value, $ 3,000
- Now you pay back the 100 units
- The $ 2000 difference is yours
It is far more simple than it may seem. Just keep in mind that by trading in NEO on eToro, you can earn money when you anticipate the price will fall.
Differences between futures and CFDs
How are Futures and CFDs different?
- Counterparties
- Futures: operations are made with someone else, another investor.
- CFDs: the counterparty is the brokerage, in this case, eToro. That means you don't “play” against or with another trader but the bank.
- Date of expiry:
- Futures: there is a date of expiry. At that point, your operation is closed even if you are in losses.
- CFDs: there is no expiration date. Thus, you can wait for your position to rise before exiting.
- Options for trading:
- Futures: options are much more restricted
- CFDs: there is an enormous amount of options for trading
- Minimum deposit:
- Futures: minimum investment is higher
- CFDs: it is possible to start with a low amount
- Costs and rates:
- Futures: costs are usually lower
- CFDs: costs are higher
- Use of leverage:
- Futures: you can't leverage
- CFDs: completely available
Exchange-Traded Funds
Exchange-Traded Funds or ETFs 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 their commissions are much lower than those of an actively managed fund.
What is an ETF?
What do you know about Exchange-traded funds? They are passively managed funds, known for merging the benefits of stocks and mutual funds, because they can be traded at any moment in the market, but have much more investment possibilities and the rates are significantly lower.
About Index Funds
This is the best option for people who can invest in the long term, mostly for beginners, because it is inexpensive, diversified, and safer.
You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers have done it, apart from some specific cases, like Warren Buffett's.
If someone brags about having beaten the index, they probably have done it for a chor period or on particular occasions, or perhaps the commissions are so high that indexing would be a better decision (with minimal commissions).
The good thing about index funds is that they perfectly solve both issues: their rates are minor and they frequently beat active managers, but in the long term.
Currency market
Forex or currency trading allows obtaining profits by exchanging one currency for another.
If you want to exchange euros and dollars, you acquire euros at their price in dollars, therefore you expect that the first currency (the euro) will raise its price compared to the second (the dollar), to make a profit by selling it. Suppose you entered when the price of one euro is 1.10 USD and you close when it is worth 1.15: as a result, that margin will be yours once you sell back.
You may be thinking that trading with currencies requires investing considerable amounts, and you're right, since fluctuations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is not the safest.
eToro allows exchanging the most popular currency pairs. Still, remember that in this market sales are made through CFDs, thus the underlying asset won't be yours.
How to deposit funds into your eToro account
When it comes to depositing money on eToro, there is not much to say, since it is really straightforward. You only need to select “Deposit funds”, put an amount, and choose the payment option you prefer. You can pay with PayPal (available for some countries), bank transfer, credit card, Skrill, or Neteller.
Remember that for security policies, you must be the holder of the credit card or the account.
The lowest amount you can deposit is $ 200, and there is a maximum authorized if you are not verified. Therefore, in case you plan to operate with larger sums, contact Support previously to verify your account.
The platform 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.
Virtual portfolio
In case you do not have much experience investing, you can start by practicing with a “demo” option. You just have to set the “virtual” option” in the upper left corner and your operations will be carried out with “imaginary” funds.
This option is great for those who want to give it a few tries before trading with real money. When you create your account, you will start with $ 100,000 of virtual balance to do your operations, not only with NEO, but you can also create a diverse portfolio with a variety of assets.
The first attempt is not usually that good. But don't worry, since you can ask support to replenish the virtual $ 100k to your portfolio.
But remember that you need to be prudent for trading, and using a demo account can have an adverse effect. It is not the same to risk your own money than to do operations with a fake balance that you don't mind losing.
As you may suppose, the demo 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. Demo accounts may be useful for trying out before trading in the short or medium-term.
eToro Interface
We said previously that eToro is very easy to manage. Anyone can start using it without previous knowledge or long explanations.
If you are familiar with any of the most popular social networks today, such as Whatsapp or Linkedin, you can perfectly use eToro's interface.
We will explain, roughly, the registration process and the different sections that you will see on the page.
You will have to fill in some information requested when registering.
They will also ask you about your previous trade experience.
But don't feel intimidated. The objective is to know more about you and determine which financial instruments they should suggest according to your knowledge and experience.
Let's see what the different sections of the page are.
With the “Set Price Alerts” tool, you'll be able to program an alert when an asset is at a certain price. This is perfect in case you want to purchase an asset and you are waiting for it to decrease.
In the “News Feed” tab is the most social part of eToro: where users are interacting all day and sharing valuable information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Raw materials
- Currencies
- Index funds
In “People” are all the profiles and historical performances of other users, and you can replicate their movements with just one click. This is where the “social trading” concept is best applied.
In this section, you will be able to search and find users according to your interests. You can search by risk level, financial instruments, profits or country, among other filters. When you choose an investor and indicate how much you want to invest, eToro will automatically replicate their movements, in proportion. For instance, if you invest $ 1000 and the trader puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same asset, in this case, $ 200.
Finally, you will also find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Sometimes it might be better to copy from CopyPortfolios than to particular users, because you avoid putting all your eggs in one basket, or in other words, risk is more diversified. There are all kinds of portfolios that you can find easily and are divided by sectors. Therefore, if you think a specific sector, such as fashion or healthcare, has good chances to succeed, you can look for that specific portfolio and do your investment.