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eToro, recommended broker for purchasing Gram from Ireland
Why do we recommend it?
- User-friendly and simple
- Allows to replicate investment moves
- Admits short-selling
- You can leverage
- You can make investments in thousands of different goods
Go to the official page in English: www.etoro.com/gram
In case you are considering it, eToro is probably the best option to buy Gram from Ireland.
This platform is known for making “social trading” a trend, an ingenious way of investing in which users can imitate the techniques of other traders who have been generating income over time.
eToro is very helpful if you are still a novice user in trading, since it puts your investment on automatic by imitating moves from those who have been doing it for years and making profits. And for those skilled investors willing to share their techniques, eToro rewards your knowledge with money.
Another advantage is how easy the interface is, which turns out perfect for new users that are just learning all about Gram.
If you haven't heard about “leverage”, we'll put it short. When trading, it's the capacity of increasing your investment by borrowing money from the broker. For example, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
What you should know about leverage
Let's assume that you are sure that the price of Gram is going to raise its price, therefore you decide “going long”.
You are positive that Gram will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
Perhaps you could go to your bank, request a loan, wait for it to be accepted and receiving the money, and then obtain Gram… But maybe once you have made all that, your prediction could've been confirmed already and Gram is at such a high value that it is not worth investing.
With leverage, you can obtain that amount really easily. It's like a loan, but much better: from eToro itself. You will be able to invest much more money than you actually have on the eToro Wallet. As in the image below, you will see the different options you have:
Within other markets, the leverage you can choose is higher. The reason is that cryptocurrencies usually represent medium-long term investments. However, leverage is used mostly for short-term operations or day trading. That said, I'm going to explain better how leverage works.
You begin with $ 1,000 and pick leverage x2, then you would really invest $ 2,000, since eToro would put the other $ 1,000.
A few days later, as you predicted, Gram raises its price by 20% and the value of your investment is now $ 2,400. Ok, don't be greedy, let's sell.
Obviously, the 1k $ from leverage will be deducted, and you'll have $ 1,400 left, of which $ 1000 was yours initially, so you'll have earned $ 400.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But watch out: if everything goes ok and the price rises, 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 (the leverage) that figure, that would be $ 20. That is why the terms “Take Profit” and “Stop Loss” are so important when trading with leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you buy Gram at $ 100 and you ask eToro to close your position as soon as the price goes up to $ 120. It is very helpful to avoid being blinded by enthusiasm: we would all accept a 20% profit when making the investment, but when you reach that 20% it is easy to ask yourself “what if this keeps going up and I can earn even more?”. It's like you made sure now of not acting recklessly in the future.
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.
How are CFDs and futures different?
What are the differences between Futures and CFDs?
- Counterparties
- Futures: the exchange is made with another investor.
- CFDs: the operations are not made with someone else, the counterparty is the brokerage platform, in this case, eToro.
- Date of expiration:
- Futures: there is an expiry date. At that point, the contract is closed even if you are in red.
- CFDs: they do not have an expiry date. It is possible to wait until you are in a good shape to close.
- Variety:
- Futures: there are fewer options for investment
- CFDs: you have plenty of options to choose from, there is a huge diversity of CFDs
- Minimum investment:
- Futures: you need a larger initial investment
- CFDs: you can get in with a small initial deposit
- Cost of trading and charges:
- Futures: costs are usually lower
- CFDs: higher (although they are not excessively high either)
- Leverage:
- Futures: it isn't possible to trade with leverage
- CFDs: totally available
About Contracts for Difference
You probably have seen the acronym CFD all the time if you entered eToro before. We will explain exactly what this means, but first, you should know that cryptocurrency trading on eToro is only CFD if you short sell or choose leverage higher than x2 (but this is not even an option on eToro).
If you want to know about day trading cryptocurrency and other advanced practices, next we will also address terms such as leverage and “going short”.
The good thing about eToro is that it allows you not only to bet “in the black”, but with CFDs you can also bet “in negative”. In a hypothetical case: you are sure that the Gram will fall, so perhaps you think that the best thing to do is wait until it does and then go in. Nevertheless, if you really consider that it's going down, why not take advantage of that?
You can do that by “going short”. Basically, this is how it works:
- You get from a loan 100 units of Gram, which cost $ 5,000 (these numbers are imaginary)
- You make $ 5,000 by selling the 100 units
- The Gram devaluates from $ 50 to $ 30
- You get the 100 units again, but at their current price, $ 3,000
- You pay back the 100 units to whoever made the loan in the first place
- You will have made $ 2000, since you keep the difference
It is far more simple than it may seem. Just take into account that by trading in Gram on eToro, with CFDs you can make a profit if you anticipate downs in the price.
How to use eToro
We mentioned before that one of the best things about eToro is that the platform is very friendly and easy to use. It isn't necessary to read a lot or have previous knowledge to start investing.
Everyone who has previously used Instagram, Facebook or any of the most common social networks, knows enough to use eToro.
We will explain the registration process and the different tabs that you will see.
You will have to fill in some information requested when registering.
Additionally, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. The only intention is to know more about you and be clear about which financial instruments they should recommend according to your knowledge and experience.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Let's see what the different sections of the platform are.
“Set Price Alerts” allows you 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 an asset that is falling, but perhaps you think that it has not finished falling yet.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we mentioned in this guide, the six types of instruments on eToro are:
- Cryptocurrencies
- ETFs
- Shares
- Commodities
- Forex trading
- Index funds
In the tab “People” are all the profiles and historical performances of other investors, and you can replicate their strategies with just one click. This is where the “social trading” concept is best applied.
In this section, you can search and find users according to your interests. You can search by risk level, trading market, profits or country, among other filters. When you choose an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, in proportion. For instance, if you have $ 1000 and the trader puts 20% of their funds in an asset, the platform will invest $ 200 of your balance in the same asset as well.
Finally, you will also find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Sometimes you might prefer copying to CopyPortfolios than to other traders, because you avoid putting all your eggs in one basket. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … You think that a certain industry is going to succeed anytime soon? Then look, because surely there is a CopyPortfolio about it.
How does a demo account 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 practicing with an “imaginary” portfolio.
This can be a great way of gaining experience and confidence before trading with real funds. The platform will give you an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you can trade with all the different instruments available on eToro, not just with Gram.
The first attempt is not usually that good. But you can ask eToro to replenish the virtual $ 100k to your account.
Nevertheless, keep in mind that you need to be prudent for trading, and demo account trading can have the reverse effect. It is not the same to risk your own money than to operate with a false balance which loss does not suppose any drama.
Evidently, if you are interested in investing in the long or medium-term, there is no point in using the virtual mode and having to wait for years. But it can be very useful if you want to practice short and medium-term investment.