Contents
eToro, an advisable broker for those who are in Ireland and want to obtain Ripple
Some of its advantages are:
- Really intuitive and simple
- It offers other successful investment strategies so you can replicate them
- You can short sell
- Leverage is allowed
- There are uncountable investment opportunities
Go to the official page in English: www.etoro.com/ripple
If you are thinking about purchasing Ripple from Ireland, eToro may be the best way to do it.
“Social trading”, a relatively new form of investing by replicating techniques and moves from other experienced investors, has become trendy thanks to eToro.
eToro is very useful if you don't have much experience in trading, since it automatizes your investment by repeating strategies from traders with a long profit history. Also, in case you are an investor, the platform pays for your knowledge.
It is also worth mentioning how easy is the interface of the platform, excellent for beginners who are starting with Ripple.
About Contracts for Difference
If you already browsed eToro, you probably noticed that the acronym CFD appears all the time. We will come back to it, but first, you should know that cryptocurrency operations on eToro are only CFDs when you go short.
We will also explain concepts such as short-selling and leverage, in case you are thinking about day trading cryptocurrency or more advanced practices.
eToro allows you to bet both “in the black” and “in negative”. In a hypothetical case: you believe that the Ripple will go down, so the logical thing is to think “if it is going to depreciate, I'll simply wait until it does and then I'll go in”. But if it actually falls, you can earn some money out of that.
You can accomplish that by “going short”. More or less, this is how it works:
- They lend you, let's say, 100 units of Ripple, with a total price of $ 5,000 (these are completely imaginary figures)
- Next, you sell them at their current price, $ 5,000
- The price is reduced, as you guessed, and the unit of Ripple now costs $ 30 instead of $ 50
- You purchase all 100 units one more time, but now they are worth $ 3,000
- Now you pay back the 100 units
- The difference is yours, so, you will have made $ 2000
It is far more simple than it may seem. Just keep in mind that by trading in Ripple on eToro, you can make a profit if you anticipate downs in the price.
What's the difference between CFDs and futures?
What are the main differences between CFDs and Futures?
- Counterparties
- Futures: the counterparty is someone else, another investor.
- CFDs: the operations are not made with another individual, but the counterparty is the broker.
- Expiration:
- Futures: they have an expiry date. At that moment, your operation is ended even if you are in losses.
- CFDs: there is no expiration date. It is possible to wait until you are in a good shape to close.
- Options for trading:
- Futures: there are limited options
- CFDs: there is an enormous amount of options for trading
- Minimum investment:
- Futures: you have to invest much more
- CFDs: you can start trading with a low amount
- Trading costs and charges:
- Futures: being higher figures, rates are usually proportionally lower
- CFDs: fees are higher
- Leverage:
- Futures: there is no leverage leverage
- CFDs: existing and available
About ETFs
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are traded in the market like stocks, during the day. However, their advantage is that they are more diversified compared to stocks, and the rates are much lower than those of an actively managed fund.
Equities
Stocks or equities are the most common financial assets. Some enterprises divide their capital into fractions: you can be one of those shareowners, but first, you have to know where and how to make your investment.
Basically, there are two types of stocks: those of companies that distribute their earnings among the shareholders and those that don't pay regularly. However, this is not to say that the latter have less to offer. If a company does not pay every year but has a lot of potential, you should not discard that option, since the capital gain you will get from the sale of the shares can be much greater than what you would earn through dividends.
If you invest in stocks that payout, you will receive the funds into your eToro account, and you can withdraw them or invest back. Nevertheless, you can benefit a lot from compound interest, so we would recommend reinvesting in the company if you don't need the money immediately.
If you trade with stocks on eToro, you will be able to use leverage. But it is not advisable, since it would be a CFD and you would not receive dividends. On top of that, shares are usually long-term investments, and you have to pay commissions.
About ETFs
What do you know about Exchange-traded funds? They are passively managed funds, known for merging the benefits of stocks and mutual funds: they can be traded regularly at market price, but have much more diversity and considerably lower rates.
About Index Funds
This is the best option for people who can invest in the long term, especially for those who are starting to trade, because it is less expensive, diversified, and the risk is lower.
You may have a different idea, but it is very hard to beat the market (although you have probably heard of investors who obtain huge returns).
But except for Warren Buffett and a couple more, not everything is as good as it sounds: if you hear of someone who has beaten the market, they have probably done so for a short time, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, if something happened once, it doesn't mean necessarily that it will happen again.
The good thing about index funds is that they perfectly solve both issues: their fees are insignificant and in the long term they tend to beat active managers.
Raw materials
The major advantage of investing in commodities is that prices are more stable than those of other assets. In fact, their intrinsic security is what makes people often invest in raw materials, to take refuge from possible inflation or market volatility. Nonetheless, the prices of commodities are defined by their demand. Therefore, if a given economic situation provokes higher demand, the prices will also be higher.
Note that the only intended income from the investment in raw materials will come from their further sale because, unlike stocks, commodities don't distribute dividends or pay interest.
Commodities can be divided into two main types: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals (for instance, aluminum, iron, or zinc), and oil; while the latter are agricultural products as cocoa, soybeans, rice, or sugar, among many others.
How does eToro work?
We mentioned previously that eToro is very friendly and intuitive. Anyone can start investing without previous knowledge or long explanations.
Everyone who has used social networks like Whatsapp or Facebook, knows enough to operate with the eToro interface.
Now we will detail the registration process and the sections of the page that you should know.
You will have to provide some personal data when registering.
Also, you will have to answer some questions about your experience as an investor.
However, it is not like you are answering a test. They are only measures to know how much knowledge you have and what type of financial instruments they can suggest. For instance, if you have never invested before, they will not suggest that you invest in futures.
Let's get to know the fundamental sections of the platform.
“Set Price Alerts” allows you to put alerts 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. It is a very useful tool for when you want to buy an asset which price is decreasing, but it seems to you that it has not finished falling yet.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we discussed before, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
The term “social trading” comes to life in the section “People”: there, you can copy the trading strategies of the users you find most inspiring with just one click.
In this section, you will be able to 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. If you invest $ 1000 and the trader puts 20% of their funds in an asset, eToro will invest $ 200 of your balance in the same asset or company as well.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
The advantage of using CopyPortfolios instead of copying individuals 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. So, in case you think a specific sector, like biotechnology or drones, has a good chance of prospering, you can find that specific portfolio and do your investment.