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eToro, a reliable online trading platform for those in Ireland who want to obtain Ethereum
Why do we recommend it?
- It's uncomplicated and manageable
- It uses strategies from experienced investors so you can copy them
- You can go short
- Leverage is allowed
- It is possible to invest in plenty of other goods
Main site: www.etoro.com/ethereum
You should consider eToro if you are interested in acquiring Ethereum from Ireland.
eToro is known for making “social trading” a trend, an ingenious form of investing in which users can replicate the techniques of other traders who have been generating income for years.
eToro has solutions for you, even if you are still a beginner in trading, since it automatizes your investment by imitating moves from those who have been doing it for years and making profits. Additionally, in case you are an investor, the platform pays for your knowledge.
Another thing to mention is how intuitive the interface is, which turns out perfect for new users that are just learning all about the trading world.
Is eToro reliable for purchasing Ethereum?
Many tests from independent consultants have been applied to eToro to certify its integrity in reporting previous performance statistics. And it has been confirmed every time that eToro is very precise with the data.
The main headquarters of eToro is located 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 Ireland. On the other hand, eToro meets all the strict regulations of the European Union.
In Europe, it is backed by the European Financial Instruments Market or MiFID, and in the USA it is under the control of the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has been active for fifteen years and that it has more than 20 million users around the world, so we can be sure that our funds are safe.
It is also worth mentioning the good functioning of its customer service. You can use the ticketing system, an online chat, and they also have a phone number available for assistance.
Differences between futures and CFDs
How are CFDs and Futures different?
- Which are the counterparties? In the case of Futures, the counterparty is another trader. In CDFs, it’s the brokerage, in this case eToro
- Expiry date Futures expire in a variable given date, while CFDs don’t expire
- Variety of options for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum deposit Being higher numbers, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher, although not too much.
- Is it possible to leverage? With Futures, you can’t leverage; while with CFDs it is always possible.
In case you haven't heard about the term “leverage”, we'll put it short. When trading, it's the capacity of multiplying your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Why using leverage and how to do it
Assuming that, for instance, you are sure that Ethereum is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and make more money.
Possibly, you could ask your bank for a loan, wait for it to be accepted, wait for the money, and then obtain Ethereum… But by then it is possible that your prediction was confirmed a long time ago, and Ethereum would be already so high that it is not worth trading.
Leverage is like a loan, and you will only have to click a few times! eToro allows you to invest (and earn) much higher amounts than what you actually have on the platform's wallet. Before trading, you will how much leverage to use as in the image:
Trading with other assets allows you to use higher leverage. The reason is that cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used primarily for short-term operations or day trading. But let's see how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was borrowed from eToro).
- A few days later, Ethereum does rises, as you thought, and now the cost of your investment is $ 2,400 (20% higher), 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 you've earned $ 400, since the other $1,000 was yours from the beginning.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is quite good.
But there's always a downside. If everything goes ok and the asset increases, you will make profits. On the opposite scenario, if the price falls, you will also lose more money really fast.
Supposing that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. That is why to operate with leverage it is fundamental to know other two terms: Take Profit and Stop Loss.
Take Profit is an automatic order of selling once the asset achieves a certain price: you buy Ethereum at $ 100 and you ask eToro to close your position as soon as the price reaches $ 120. It is very helpful to avoid being blinded by greed: a 20% profit is usually pretty good, but once you see it goes up, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you to trade more safely.
Also, if you use leverage you absolutely need to place a Stop Loss order (take into account that any small loss is greater with leverage). You always need to establish a Stop Loss lower than that suggested by the platform.
What are ETFs?
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are publicly traded and therefore can be bought and sold at any moment at market price. Their main benefit is that they are more diversified compared to stocks, and the rates are much lower than those of an actively managed fund.
Foreign exchange market
What is known as Forex trading consists in the exchange of currencies. In other words, is the conversion of one currency to another, and the aim is, evidently, to make a profit out of this.
In case you want to trade the EUR/USD pair, you buy euros at their price in dollars, with the expectation that the euro will increase compared to the dollar. Then, if you bought each euro for 1.15 USD and you sell them back when they are worth 1.20 USD, you'll be keeping that margin.
You may be thinking that this form of trading requires high investments, and you're right, because fluctuations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. In case you are just starting to trade, it is not a good idea to begin with Forex, because it is very risky and complex.
eToro allows trading with the most known currency pairs but consider that this market works with contract for differences, which means you will not own the real asset.
How do Contracts for Difference Work?
You probably have found the acronym CFD all the time if you entered eToro before. Before we explain this further, we must say that cryptocurrency operations on eToro are only CFDs if you short sell or leverage above x2 (although the platform does not even allow this).
We will also refer to terms such as leverage and “going short”, in case you are interested in day trading cryptocurrency or more advanced practices.
eToro allows you to bet both “in the black” and “in negative”. Let's say that you have the conviction that the Ethereum will fall, so you clearly think “if it is going to depreciate or go down, I'll simply wait until it does and then I'll bet”. 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:
- You obtain from a loan 100 units of Ethereum, with a total price of $ 5,000 (these are completely fictional numbers)
- You make $ 5,000 by selling the 100 units
- The Ethereum devaluates from $ 50 to $ 30
- You purchase the 100 units again, but at $ 3,000
- Now you pay back the 100 units to the person that loaned them to you
- The rest is yours, so, you will have earned $ 2000
It is far more simple than it may seem. Just remember that by trading in Ethereum on eToro, with CFDs you can make money when you anticipate downs.
How to use eToro
We mentioned previously that eToro is very easy to manage. Anyone can start using it without previous knowledge or long explanations.
You won't have any problems with the interface if you have used any other social network.
We will explain the registration steps and the different sections that you will find on eToro.
First, you will have to enter all the information that eToro asks for: first and last name, address…
Additionally, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. They only intend to find out about your previous experience and knowledge to know which instruments to recommend for you.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's see what the different sections of the site are.
With the “Set Price Alerts” tool, you'll be able to program an alert when a security is at a certain price. This is ideal in case you want to buy an asset and you are waiting for its price to fall.
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”. As we mentioned before, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
The concept “social trading” makes sense within “People”: that is where you can duplicate the strategies of the investors you find most inspiring with just one click.
You can search and find users according to your interests. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. For example, if you invest $ 1000 and the trader puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
In some cases, it might be preferable to copy from CopyPortfolios than to particular traders, because you avoid putting all your eggs in one basket. Besides, the different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … You think that a certain industry will prosper in the future? Then you will surely find a CopyPortfolio about it.
Investment strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as day trading or buying and holding, for naming just a couple.
In case you don't have much experience in investment, I recommend a middle point: placing a dynamic stop-loss (15-20% under the highest price) when you open your operation and wait for it to work on its own.
For example, if you buy a cryptocurrency when its price is $ 15, then it increases to $ 25 and decreases back to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will get a satisfactory income.
You may be wondering: why not selling when the price is at its highest? 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 ready for using more advanced trading techniques, like short-selling or using leverage.