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eToro, recommended brokerage for buying Tether from Egypt
Some of its advantages are:
- You are able to replicate investment moves
- You can go short
- Very intuitive and straightforward
- Leverage is allowed
- There are uncountable possibilities for investments
Official homepage: www.etoro.com/tether
In case you are considering it, eToro is the best option nowadays to obtain Tether from Egypt.
“Social trading”, a relatively new investment method that consists in replicating techniques and strategies from other experienced investors, has become popular because of eToro.
eToro has solutions for you, even if you don't have much experience in trading, since it puts your investment on autopilot by replicating moves from those who have been doing it for years and making profits. And for those skilled investors willing to share their techniques, eToro pays for it.
It is also worth mentioning how easy is to manage the platform, excellent for beginners who are starting with Tether.
About Contracts for Difference
If you already browsed eToro, you probably noticed that the initials CFD appear over and over. We will come back to it, but first, you should know that CFDs on eToro are only possible when you short sell or choose leverage over x2 (and the platform does not even allow this).
We will also explain terms such as short-selling and leverage, in case you are interested in day trading cryptocurrency or more advanced operations.
With CFDs you can operate on the platform even if you are “in red” or don't have a positive balance. Let's say that you believe that the Tether will go down, so the logical thing is to think “if it is going to depreciate or go down, I'll just wait until it does and then I'll go in”. But if it really goes down, it is possible to make some profits out of that.
You can accomplish that by “going short”. Here's how it works ,roughly:
- They lend you, for example, 100 units of Tether, which cost $ 5,000 (these numbers are completely made up)
- You sell the 100 units and earn $ 5,000
- The Tether devaluates from $ 50 to $ 30
- You get the 100 units again, but at $ 3,000
- Now you give back the 100 units
- You save the $ 2000 difference!
It is really simple. Just consider that by trading in Tether on eToro, with CFDs you can make a profit when you anticipate downs.
Differences between futures and CFDs
What are the main differences between Futures and CFDs?
- Counterparty
- Futures: operations are made with someone else, another investor.
- CFDs: you don't operate with another individual, but the counterparty is the brokerage.
- Date of expiry:
- Futures: there is an expiration date. As soon as that date arrives, the contract is closed even if you are in red.
- CFDs: there is no expiration date. It is possible to get back to a good position before you exit.
- Trading options:
- Futures: there are fewer options for investment
- CFDs: there is an enormous amount of possibilities
- Minimum investment amount:
- Futures: you need a larger initial investment
- CFDs: you can start with a lower minimum trade size
- Trading costs:
- Futures: being higher figures, rates are, commonly, proportionally lower
- CFDs: higher (although not too much)
- Possibility of using leverage:
- Futures: you can't leverage
- CFDs: accessible leverage
In case you still don't know what “leverage” is, we'll put it short: it is the ability to use a higher amount than you actually have. For example, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Why using leverage and how to do it
Let's pretend that you are sure that Tether will raise its price, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
You could consider requesting a credit at your bank or other financial company, but you must know that all the process takes time, and by the moment you receive the money, Tether might be already so expensive that investing wouldn't be convenient anymore.
Thanks to leverage, you can get that amount just by clicking your mouse. It's exactly like a loan, but much better: you will get it from eToro, which allows you to invest a lot more than you have on the platform. Before trading, you will find the leverage options as in the image:
When operating with other kinds of assets you can use higher leverage. Why? Because leverage is regularly for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works.
You enter with $ 1,000 and pick leverage x2, which means you would have $ 2,000 to invest, since eToro would put the other $ 1,000 (which is double your initial amount).
A week later turns out that Tether goes up by 20% and now your investment costs 2,400. But you don't want to be too greedy, so you decide, wisely, to sell again.
First of all, the 1k $ of the leverage will be deducted. You have $ 1,400 left, of which $ 1000 is the money you invested yourself, so you'll have earned $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is quite good.
But watch out: if everything goes ok and the asset increases, you will make profits. However, if the asset decreases, you will also lose more money than you invested.
For instance: if the price falls by 10%, you do not lose $ 10, but twice that figure, which means $ 20. That is why the concepts of 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 purchased Tether at $ 100, you program eToro to close when it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps rising, which could be a mistake.
Stop Loss is even more necessary, especially if you use leverage, because a reduced loss with leverage can have a significant impact on your wallet. Consider that eToro will recommend a limit for Stop Loss, but you should set it lower than the platform suggests.
What is an ETF?
Have you heard about Exchange-traded funds or ETFs? They are passively managed funds, known for combining the advantages of stocks and mutual funds, because they can be traded at any moment in the market, but have much more investment possibilities and considerably lower fees.
Stocks
The most common financial instruments are stocks: these are fractions in which a company can be divided, and thanks to capitalism you may be a shareholder of a company and have returns, but you must know where to invest your money.
We can group stocks into two main types: the ones that divide their earnings regularly among the investors, and those that don't payout. The former ones are great, obviously, but investing in the latter can also be a good idea since the profit you can make by selling the shares can be even larger.
If you invest in stocks that pay out dividends, you will receive them into your account on eToro. Then, you can withdraw that money or you can choose to reinvest it. Nevertheless, compound interest is magic, so we would recommend reinvesting in the company.
If you trade with stocks on eToro, you can use leverage to “dope” your trades. However, it is not advisable, since it would be a CFD and you would not get dividends. Also, as shares tend to be long-term investments, you will have to pay commissions as long as your position is open.
What are ETFs?
ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a merge between stocks and mutual funds. They are publicly traded, that means they can be bought and sold at any moment at market price. However, 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.
Index Funds
Are the best option for those planning to invest for the long term, mostly for beginners. If you don't need an amount of money for the next five or ten years, index funds offer you variety and lower risks.
You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers achieve that, apart from some specific cases, like Warren Buffett's.
If someone brags about having beaten the index, they probably did it for a short time or on a specific occasion, or perhaps the charges are so high that indexing would be a better decision anyway.
The great advantage of index funds is that they perfectly solve both issues: their fees are insignificant and they beat active managers almost all the time, although in the long term.
Commodities (raw materials)
The major advantage of investing in commodities is that their price fluctuates less than that of other financial products. In fact, their intrinsic stability is what makes people often invest in raw materials, to take refuge from possible inflation or market volatility. Nonetheless, the cost of raw materials is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Keep in mind that the only intended income from the investment in raw materials will come from their further sale because these kinds of assets don't pay dividends.
Raw materials are usually categorized into hard raw materials, which include precious metals, industrial metals, and oil; and soft raw materials, which are basically agricultural products, like soy, cocoa, corn, or rice, for instance.
How does a virtual portfolio work?
If you are beginning as an investor, you can start by practicing with a “demo” option. Setting a virtual account and operating with fictional funds is very simple.
This is a great tool for those who are new to this world and want to put their talents to the test before playing for real funds. With your virtual account, you will begin with a $ 100,000 balance (which of course, is fake) to do your operations, not only with Tether, but you can also work with a diverse portfolio.
The first attempt is not usually that good. But don't worry, since you can ask support to replenish the virtual funds to your portfolio, and the second try you should do better.
But remember that you need to be prudent for trading, and using a demo account can have the opposite effect. It is not the same to risk your own money than to operate with virtual funds that you don't mind losing.
And of course, if you want to invest in the medium or long-term, with earnings almost assured only by duplicating an index, it is absurd that you invest in the virtual mode and wait for years. On the contrary, short or medium-term operations are ideal to try out with the virtual mode.
How does eToro work?
We said before that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
You won't have any problems with the interface if you have used any other social network, like Instagram or Pinterest.
Now we will walk you through the sign-up process and the sections of the page that you should know.
You will have to provide some personal data (like full name or address, for instance) when registering.
They will also ask you about your previous experience as an investor.
But don't feel like you are taking an exam. They only intend to find out how much you know and which financial instruments to recommend for you.
Now we will explain the different sections of the platform.
In “Set Price Alerts”, you have, as its name says, the option to put alarms on the price of certain assets. You only need to click on the three points at the end of the line and you will be able to program a price alarm. It is a very useful tool for when you want to purchase a security that is falling, but it seems to you that it will decrease even more.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Raw materials
- Forex trading
- Index funds
The term “social trading” makes sense within “People”: that is where you can duplicate the strategies of any user you choose with just one click. You'll be able to see all their profiles and performances.
You will be able to find those users that you find more interesting. You can apply filters like country, average profits, or financial market. When you choose an investor and indicate how much you want to invest, eToro will automatically replicate their movements, proportionally. If you have $ 1000 and the user puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Remember that in some cases, it might be preferable to copy from CopyPortfolios than to individuals, since you avoid putting all your eggs in one basket, or in other words, risk is more diversified. 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 sector is going to succeed in the future? Then look, because surely there is a CopyPortfolio about it.