Contents
eToro, our favorite platform for buying Tezos from Ireland
Why do we recommend it?
- It is possible to invest in plenty of other goods
- eToro offers leverage
- Very user-friendly and straightforward
- You are able to replicate investment tactics
- You can go short
Official homepage: www.etoro.com/tezos
If you are interested in buying Tezos from Ireland, eToro is certainly the best option.
eToro is well-known for making “social trading” a trend, an innovative way of investing in which traders can emulate the strategies of other investors who have been generating income for years.
If you are a novice user or do not have much investment experience, eToro is very helpful. You can rest assured that you are doing a smart investment move when replicating those from subjects with a long profit record. Also, in case you do have experience in investment, the platform pays you for sharing it.
Besides, this platform is completely intuitive, great for users who want to start learning about Tezos and trading, without ending up overwhelmed with tons of diagrams and numbers.
How does eToro work?
We already said that one of the best things about eToro is how simple it is. You don't need to read a lot or have previous knowledge to start investing.
You won't have any problems with the interface if you are familiar with any other social network, like Twitter or Facebook.
We will explain the registration process and the different sections that you will find.
First, you will have to fill in all the information that eToro asks for: first and last name, address…
Additionally, you will have to answer some questions about your experience as an investor.
But don't feel intimidated. The objective is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
When you fill in all your information in your profile, you will stop seeing the “incomplete profile” message.
Let's review the different functions of the interface.
With the “Set Price Alerts” tool, you'll be able to program an alert when a security is at a certain price. This is perfect if you want to buy a security 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.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. As we discussed before, the types of financial instruments that eToro offers are:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Forex
- Index funds
The concept “social trading” makes sense within “People”: that is where you can duplicate the trading strategies of any investor you choose. You'll be able to see all their profiles and performances.
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 select an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, in proportion. 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 asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are “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. There are all kinds of portfolios that you can recognize easily and are divided by sectors. So, if you think a specific industry, like fashion or drones, will prosper in the future, you can look for that specific portfolio and invest.
Is eToro safe for purchasing Tezos?
eToro has been tested by independent organizations once and again to validate its integrity in reporting performance statistics from previous users. And it has been confirmed every time that eToro is meticulous with the figures.
The main office of eToro is located in Cyprus, and the platform is approved by the CySEC or Cyprus Securities Market Commission, which covers debts up to € 20,000 from its clients, including those from Ireland. The platform complies, on the other hand, with 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, you should know that eToro has been active for fifteen years, with more than 20 million users, so we can be sure that our funds are safe.
It is also important to mention the good functioning of its customer service. You can use the online chat, and they also have a phone number available for assistance.
If you are not familiar with the term “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.
About leverage, Take Profit and Stop Loss
Suppose now that you are sure that the price of Tezos is about to raise its price, and you are thinking about “going long”.
You are positive that Tezos will rise, but you can only invest $ 1,000. Isn't it a shame to miss out on the opportunity to earn more money?
You could go to your bank, request a loan, wait for it to be accepted and receiving the money, and then obtain Tezos… But by then it is possible that your prediction was confirmed a long time ago, and Tezos would be already at such a high price that it is not worth trading.
Leverage is just like a credit, and you will only have to click a few times! eToro allows you to operate with much higher amounts than what you actually have on the platform. Before trading, you will be able to choose between the different leverage options as in the image below:
With other assets, the ability to leverage is greater. The reason is that leverage is most used for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. That said, I'm going to explain better how leverage works.
If for your investment of $ 1,000, you use leverage x2, your investment is 2 * $ 1,000, that is to say, $ 2,000. eToro puts the remaining amount to reach that figure.
A couple of days pass and, indeed, you were right: Tezos has risen 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 is the money you put in yourself, so you'll have earned $ 400.
As you can see, with $ 1000 you get $ 400, in other words, 40% more. Not bad, right?
But there's always a drawback. If all goes as you planned and the asset increases, you will make money. However, if the price falls, you will also lose more money in the blink of an eye.
Supposing that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. Therefore, when operating 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 Tezos at $ 100, you request 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 going up, which could make you lose it all.
On the other hand, when using leverage you should always use Stop Loss, because a small decrease in the price of an asset can lead to a substantial loss. That is why it is essential to mark a Stop Loss lower than that suggested by eToro.
How to deposit funds into your eToro account
When it comes to depositing funds on eToro, there isn't really much to say, since it is really straightforward. You only need to select “Deposit funds”, set an amount, and choose your payment method. You can pay with PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Remember that for security policies, you must be the holder of the account or the credit card.
The lowest amount is $ 200, and there is a maximum allowed for unverified accounts. Therefore, if you plan to operate with larger sums, contact Support previously to verify your account.
eToro accepts transfers in any currency, but charges a commission for making the conversion to USD. That is why we recommend, if possible, depositing in USD from the beginning.
Exchange-Traded Funds
ETFs or Exchange-Traded Funds are a kind of passively managed fund, similar to index funds. We can say that ETFs are somewhere between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Stocks
Stocks or equities are the most common financial instruments. Some enterprises divide their capital into fractions and have several shareholders. By investing money in them, you can own a fraction of a company and obtain returns.
We can group stocks into two different kinds: those that pay dividends and those that do not. Those that pay, at the end of the fiscal year, distribute their earnings among their shareholders; the latter, on the contrary, do not. However, that doesn't mean that the latter have less to offer. If a company does not pay every year but has a lot of potential, it is also worth investing in it, since selling the shares in the future could pay much more.
When trading on eToro, if you invest in shares that distribute dividends, these will be deposited into your account, and you can collect them in cash or reinvest them. We suggest, if you don't have financial urgencies, that you benefit from compound interest and reinvest it in the company itself.
If you invest in stocks on eToro, you can use leverage to “dope” your trades. But we don't recommend that, since it would be a CFD and you would not get dividends. On top of that, equities are usually long-term investments, and you have to pay fees while your operation is open.
About ETFs
Exchange-Traded Funds or ETFs are a kind of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds. They are traded in the market like stocks, during the day. Their main benefit is that they are more diversified compared to stocks, and their fees are much lower than those of an actively managed fund.
Index Funds
Are most adequate for those interested in long-term investments, mostly for beginners. If you don't need an amount of money for the next five or ten years, index funds are a secure option.
Unlike a lot of people think, benchmark returns are very difficult to beat and very few fund managers achieve that, apart from some famous cases, like Warren Buffett's.
If someone brags about having beaten the benchmark, they probably did it for a short time or on a specific occasion, or sometimes the charges are so high that indexing would be a better decision anyway (with minimal commissions).
The great advantage of index funds is that they solve both issues: their fees are minor and in the long term they tend to beat active managers.
Commodity market
Most people invest in raw materials due to their stability. While other assets tend to fluctuate more, raw materials prices vary less and offer security against inflation or market volatility. Nevertheless, prices are subject to supply and demand, so if an economic situation produces greater demand for a certain good, its cost will also increase.
Keep in mind that the only intended income from the investment in raw materials will be the hypothetical capital gain after the sale since, unlike shares, these don't distribute dividends or pay interest.
Commodities can be classified 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, iron, nickel, or aluminum), and oil; while the latter are agricultural products as wheat, soybeans, vegetables, or even dairy, among many others.
Futures Vs CFD
How are CFDs and Futures different?
- Counterparties
- Futures: operations are made with another trader.
- CFDs: the counterparty is the broker (eToro). That means you don't “play” against or with another trader but the bank.
- Expiry date:
- Futures: they expire. Once the contract expires, it is closed and can't be reopened.
- CFDs: on the contrary, there is no expiration date. It is possible to wait until you rise up and then close.
- Options for trading:
- Futures: options are much more restricted
- CFDs: you have plenty of options, there are CFDs of practically anything
- Minimum deposit amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can start trading with a low amount
- Costs and rates:
- Futures: as you have to invest more, rates are lower
- CFDs: costs are higher
- Leverage:
- Futures: it isn't possible to trade with leverage
- CFDs: totally available
How do Contracts for Difference Work?
You probably have seen the term CFD now and then if you entered eToro before. Before we come back to it, you must know that CFDs on eToro are only possible if you short sell.
We will also explain concepts such as going short and leverage, in case you are considering day trading cryptocurrency or more advanced operations.
With CFDs you can operate on eToro even if you are not “in the black” or having a negative balance. Let's say that you are sure that the Tezos will fall, so probably you think that the best thing to do is refrain from getting in until it does. Nevertheless, if you are convinced that it is going down, why not take advantage of that?
You can do that by “going short”. Basically, it works like this:
- You ask for a loan of, let's say, 100 units of Tezos, which cost $ 5,000 at the moment (obviously, these numbers are made imaginary)
- You get $ 5,000 by offering them at the market price
- The Tezos devaluates from $ 50 to $ 30
- You obtain the 100 units again, but at $ 3,000
- Then you pay back the 100 units to the person that loaned them to you
- There: the $ 2000 difference is yours
Consider that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Tezos you can also make money if you foretell the downs.
Trading strategies
When trading cryptocurrencies, there are different possible methods or strategies, like day trading or buying and holding, for naming just a couple.
In case you don't have much experience trading, our recommendation is something in between: when you open your Tezos position, set a stop-loss 15-20% under the top price, and forget about the operation.
This means that if, for example, you acquire a cryptocurrency at $ 10, it reaches $ 20, and after that it falls to $ 12, your position will be closed at $ 16-17 and you will make a pretty good profit.
It might sound more appealing to sell when the price is at its highest, right before corrections, but that is simply not possible. The mentioned strategy is much more realistic and it can give great results.
Eventually, you will be prepared for applying more advanced trading strategies, such as short-selling or using leverage.
How does a virtual account work?
Are you taking your first steps in trading? Using a demo account can be useful. Just make sure the virtual mode is set and you can start practicing with an “imaginary” balance.
This is a great tool for those who are new to this world and want to put their talents to the test before playing for real funds. With your virtual portfolio, you will begin with a $ 100,000 balance (which of course, is fake) to do all the operations that you can think of: not just with Tezos, you can also create a diverse portfolio with all the different instrument that are available on eToro.
Don't worry, since if you lose all your virtual funds, you can contact support so they can add back the $ 100,000 to your demo account and you can try again.
Take into account that you should always be prudent when trading, and perhaps using a demo portfolio can prevent you from controlling your impulses. It is not the same to trade with your own money than with fake funds, which you can lose without a problem.
And of course, if you intend to invest in the medium or long-term, with earnings almost assured only by duplicating a strategy, it is absurd that you waste years investing in virtual mode. On the other hand, short and medium-term investments are perfect to try out with the virtual mode.