Contents
eToro, our favorite platform for acquiring Litecoin from Ireland
Why do we recommend it?
- There are uncountable investment options
- Leverage is allowed
- User-friendly and simple
- Allows to copy investment tactics
- You can go short
Go to the official site: www.etoro.com/litecoin
You should absolutely consider eToro in case you are thinking about investing in Litecoin from Ireland.
“Social trading”, a relatively new form of investing by replicating techniques and moves from other experienced investors, has become popular thanks to eToro.
eToro has solutions for you, especially if you are still a novice user in trading, because it puts your investment on autopilot by imitating moves from those who have been doing it for years. And for those skilled investors willing to share their techniques, eToro pays for it.
It is also very convenient how accessible is the platform, perfect for new traders who are starting with Litecoin.
Can you trust eToro?
eToro is very meticulous with the data about past performances from users, and its reliability has been tested several times times by independent organizations.
The main office of eToro is in Cyprus, and therefore it is certified by the Cyprus Securities Market Commission (or CySEC), which can cover up to € 20,000 from its client's debts. The platform complies, on the other hand, with all the strict policies 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). Besides all these regulations, it should be mentioned that eToro has worked for fifteen years and that it has more than 20 million users, so we can be sure that our funds are safe.
No less important is their excellent customer service. You can use the online chat, and they also have a phone number available for assistance.
How to deposit funds into your eToro account
When it comes to depositing money on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, set an amount, and choose the payment option you prefer. You can use PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Consider that for security policies, you need to be the owner of the credit card or the account.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. So, if you intend to operate with much more, you will need to verify your account previously.
The platform allows deposits or transfers in any currency, but charges a commission for making the conversion to USD. So it is better to use USD from the beginning.
Have you heard the term “leverage”? Just in case, we'll define it briefly:
another advantage of trading is that it allows you to invest more money than you can have in a given time. Let's say that you enter with $ 100 and you use x2 leverage, you will be really investing $ 200.
Why using leverage and how to do it
Let's say that you are sure that Litecoin will raise its price, and you want to “go long”, but you only have $ 1,000 available. However, it is possible to put more money and earn higher profits.
Possibly, you could ask a financial company for a credit, put something as collateral, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then purchase Litecoin… But by then it is possible that your prediction was confirmed already and Litecoin is at such a high price that it is not worth investing.
Using leverage, you can obtain that amount of money just by moving a finger. It's like borrowing money, but much better: you will get it from eToro, which lets you invest much more than you have on the platform. As in the image below, you will see the different options you have:
Within other markets, you can use more leverage. Why? Because leverage is most used for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works.
You enter with $ 1,000 and pick leverage x2, which means you would really invest $ 2,000, since eToro would put the other $ 1,000 (which is double your initial amount).
A week later turns out that Litecoin goes up by 20% and now your investment costs 2,400. But you don't want to be too reckless, so you decide, wisely, to sell again.
You will have to pay back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But there's always a drawback. If all goes as you intended and the price goes up, you will make profits. Nevertheless, if the price goes down, you will also lose more money in the blink of an eye.
For instance: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but $ 20. That is why to operate with leverage it is crucial to be familiar with other two terms: Take Profit and Stop Loss.
Take Profit is the automatic order to sell once the asset is above the entry price: you buy Litecoin at $ 100 and you ask eToro to close your operation as soon as the price goes up to $ 120. It is very useful to avoid being blinded by greed: a 20% profit is usually very 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.
Stop Loss is even more important, especially if you use leverage, because a small loss with leverage can be tragic for your wallet. Take into account that eToro will recommend a limit for Stop Loss, but you should set it lower than the platform suggests.
What are ETFs?
Have you heard about Exchange-traded funds or ETFs? They are passively managed funds, known for merging the advantages of stocks and mutual funds: they can be traded at any moment in the market, but include a much wider diversity of assets and considerably lower rates.
Forex trading
Forex or currency trading is the exchange between two currencies in order to gain money through the operation.
If you decide to exchange EUR and USD, you speculate how many dollars it will take to buy a euro, with the expectation that the first currency (the euro) will raise its price 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 exit when it reaches 1.15: that difference is yours once you make the operation.
Perhaps you already inferred this, but trading with currencies usually implies investing a lot, since fluctuations are normally low, or using a lot of leverage, which is a bit like skating on thin ice, as you know. Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.
eToro allows exchanging the most popular currency pairs. However, remember that Forex trading works with CFDs, therefore you won't own the real asset.
Commodities (raw materials)
The main benefit of trading with raw materials is that their price fluctuates less than that of other financial products. In fact, their intrinsic stability is what makes most people trade with commodities when facing possible inflation or market volatility. However, the prices of commodities are defined by their demand. Therefore, if a generalized fear of inflation causes higher demand, the prices will also be higher.
Take into account that, unlike shares, raw materials don't pay dividends. So, the only potential further earnings would come from a sale of the asset.
Raw materials are commonly categorized into two kinds: first, we have hard raw materials, which are precious metals (gold, silver, copper, and platinum), industrial metals, and oil; in second place are soft raw materials, which are agricultural goods such as sugar, cocoa, soybeans, among others.
About Index Funds
In case you are interested in long-term investments, and you won't need to take back your money in at least five years, index funds can be the best alternative. This type of investment is also great for beginners since the risks are much lower. Besides, they offer more variety.
You may think differently, but benchmark returns are very difficult to beat and very few fund managers have done it, apart from some famous cases, like Warren Buffett's.
If someone brags about having beaten the index, they probably did it for a short time or on particular occasions, or sometimes 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 these two issues: their rates are insignificant and in the long term they almost always beat active managers.
How do Contracts for Difference Work?
It is possible that you have seen the acronym CFD repeatedly if you already accessed eToro. We will explain exactly what this means, but first, you should know that cryptocurrency operations on eToro are only CFDs if you go short.
We will also explain concepts such as going short and leverage, in case you are interested in day trading cryptocurrency or other more advanced practices.
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 are sure that the Litecoin will fall, so you clearly think “if it is going to depreciate, I'll just wait and go when it has gone down”. However, if you are convinced that it is going down, why not take advantage of that?
You can do this through a practice known as “going short”. Its operation, roughly, consists in the following:
- You obtain from a loan 100 units of Litecoin, which cost $ 5,000 (these numbers are totally made up)
- You earn $ 5,000 by selling them at their price in the market
- As you supposed, the price falls, and the unit of Litecoin goes from $ 50 to $ 30
- You get the 100 units again, but at $ 3,000
- You pay back the 100 units to the loaner
- The rest is yours, so, you will have earned $ 2000
It is really simple. Just consider that by trading in Litecoin on eToro, you can make a profit if you anticipate downs in the price.
eToro Interface
As we have mentioned before, one of the best things about eToro is its simplicity: anyone can use it without having to read endless guides.
You won't have any issues with the interface if you have used any of the most common social networks.
We will talk about the sign-up process and the different sections of eToro.
You will have to provide some personal data when registering.
During the sign-up process, you will also have to answer some questions about your previous investment activities.
But don't feel like you are taking an exam. The objective is to know more about you and determine which financial instruments they should recommend according to your knowledge and experience.
When you finish filling in all the requested information, you will stop seeing the “incomplete profile” message.
Let's review the different functions of the page.
“Set Price Alerts” allows you to set alarms on the price of certain assets. You just have to click on the three points at the end of the line and you will be able to program a price alert. This is very useful when you are after an asset that is falling, but it seems to you that it will decrease even more.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and learn from each other.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already discussed the different financial instruments that are available on eToro:
- Cryptocurrencies
- ETFs
- Stocks
- Raw materials
- Forex
- Index funds
In the section “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.
You can search and find users according to your interests. When you select an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you invest $ 1000 and the user puts 20% of their funds in an asset, eToro will invest $ 200 of your funds in the same asset or company as well.
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 individuals, 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.