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eToro, a reliable online broking platform for acquiring Bitcoin Cash from Ireland
Some of its benefits are:
- It offers strategies from skilled investors so you can copy them
- Allows you to go short
- It is uncomplicated and user-friendly
- Leverage is allowed
- There are tons of investment options
Official homepage: www.etoro.com/bitcoin-cash
You should consider eToro in case you are interested in acquiring Bitcoin Cash from Ireland.
This broker is well-known for making “social trading” a trend. Social trading is a revolutionary way of investing in which traders can emulate the moves of other investors who have been generating profits for a long time.
eToro has solutions for you, especially if you don't have much experience in trading, because it puts your investment on automatic by repeating strategies from those who have been doing it for years. Also, in case you are an investor, the platform pays for your knowledge.
Another advantage is how intuitive the platform is, which turns out perfect for new users that are learning all about Bitcoin Cash.
Differences between futures and CFDs
Here is a brief comparison between Futures and CFDs, in case you want to know more:
- Who is the counterparty? With Futures, the counterparty is another investor. In CDFs, it’s the broker (eToro)
- Expiration date Futures have a determined expiration. CFDs don’t have expiry date
- Markets available for trading Futures include fewer options to trade. CFDs include a wide range of possibilities.
- Minimum investment amount Being higher figures, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher.
- Is it possible to leverage? With Futures, you can’t leverage; while with CFDs it is always possible.
If you still don't know what “leverage” is, we'll describe it briefly. When trading, it's the capacity of enlarging your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
About leverage, Take Profit and Stop Loss
Assuming that, for example, you are sure that Bitcoin Cash is going up, and that you have $ 1,000 for “going long”, you must know that you have the option of investing more and making more money.
Possibly, you could ask a financial company for a loan, put an asset as a guarantee, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then acquire Bitcoin Cash… However, when you finish doing all that, probably Bitcoin Cash would be already much higher (if your prediction got confirmed), and it wouldn't be a good idea to invest.
With leverage, you can get that amount of money with two clicks. It's like borrowing money, but much easier and quicker, and with the benefit that you will be getting it directly from eToro which will let you invest much more than you have on the platform. Before trading, you will how much leverage to use as in the image:
With other assets, the ability to leverage is greater. The reason is that cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used mainly for day trading or short-selling. Let's talk a bit more about how leverage works:
- If you want 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 Bitcoin Cash does increases, as you thought, and now the cost of your investment is $ 2,400 (20% more), so you decide to sell back because you want to play it safe.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours from the beginning.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment.
It may sound too good to be true. The thing is, you can also lose money. If everything goes according to plan and the price goes up, you will earn profits in little time; but if the opposite happens, you will also lose more really fast.
Let's say that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. That is why to operate with leverage it is very important 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 purchased Bitcoin Cash at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to keep waiting in case it keeps rising, which could make you lose it all.
On the other hand, when trading with leverage you also have to use Stop Loss, because a small decrease in the price of an asset can have a big impact on your wallet. Take into account that eToro will recommend a limit for Stop Loss, but it is better to place it lower than that.
Exchange-Traded Funds
Exchange-Traded Funds or ETFs are a type of passively managed fund, 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 fees are much lower than those of an actively managed fund.
Currency market
What is known as Forex trading consists in the exchange of currencies. It's the conversion between two currencies, and the aim is, evidently, to obtain a benefit out of this.
If you want to trade EUR and USD, you speculate how many dollars it will take to buy a euro, anticipating that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Let's say you entered when the price of one euro is 1.10 USD and you leave when it reaches 1.15: that difference is yours once you sell again.
You may be thinking that trading with currencies requires investing considerable amounts, and you're right, because variations are usually minimal, and often you will need to use a lot of leverage (which is an important risk). Our recommendation for those who are new in the world of trading is not to start with Forex, but with a safer and simpler market.
eToro allows exchanging the most usual currency pairs. Nevertheless, consider that in this market sales are always made through contract for differences, so you won't own the underlying asset.
How does eToro work?
We said previously that eToro is very easy to manage. Anyone can start investing without previous knowledge or long explanations.
Everyone who has used social networks like Instagram or Facebook, knows enough to use eToro.
We will explain, roughly, the registration process and the different sections that you will see on eToro.
When you open your account, you will have to enter all the information that eToro asks for: first and last name, address…
They will also ask you about your previous investment activities.
But don't feel like you are taking an exam. They only intend to find out about your previous experience and knowledge to determine which financial instruments to recommend for you.
Let's review the different tabs of the page.
“Set Price Alerts” allows you to put alarms on the price of certain assets. This is very useful when you want to purchase an asset that is falling, but perhaps you think that it will decrease even more.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and information.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Raw materials
- Currencies
- Index funds
The term “social trading” makes sense within “People”: there, you can duplicate the strategies of any user you choose with just one click.
In this section, you will be able to search for those traders 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 money you want to invest, eToro will automatically replicate their movements, proportionally. For instance, if you invest $ 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”.
The benefit of using CopyPortfolios instead of copying specific traders 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 biotechnology or pharmacy, has good chances to succeed, you can look for that specific portfolio and invest.
Investment strategies
There are many cryptotrading methods: for instance, you can buy and hold, or you can day trade using volatility of the market in your favor.
If you are just beginning in the world of trading, I recommend something in between: when you open your position, place a stop-loss order 15-20% under the top price, and forget about the operation.
For example, if you purchase a cryptocurrency when it is worth $ 15, it increases to $ 25 and decreases back to $17, the stop-loss will allow your operation to be closed, maybe at $ 21 or $ 22. Hence, you will get a pretty good income.
Perhaps you are wondering: why not selling when the price is at its maximum? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and is more realistic.
Sooner or later, you will be prepared for using more advanced investment techniques, like going short or using leverage.
How does a demo account work?
If you do not have much experience investing, the option to operate in “demo” mode may be helpful. You just have to set the “virtual” option” in the upper left corner and you will be able to trade with “imaginary” funds.
A virtual account can be a good way of practicing before starting to operate with real funds. When you create your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of assets available on the platform (not only with Bitcoin Cash).
If your performance is not that good and your balance ends at zero, there is always a possibility to replenish your virtual funds. The second time will probably be better.
Nevertheless, keep in mind that you need to be prudent for trading, and demo account trading can have an adverse effect. It is not the same to risk your own money than to trade with virtual funds that you don't mind losing.
And of course, the demo mode is kind of pointless if you want to trade in the medium or long-term, since you would be wasting years to see the outcome. Demo accounts may be ideal for trying out short or medium-term operations.