Contents
eToro, recommended brokerage for those in India who want to buy Bitcoin
Why do we recommend it?
- You are able to replicate investment tactics
- Accepts “shorting” or short-selling
- User-friendly and straightforward
- eToro offers leverage
- There are tons of products you can invest in
Official main site: www.etoro.com/bitcoin
You should certainly consider eToro if you are thinking about purchasing Bitcoin from India.
“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become popular because of eToro.
eToro has solutions for you, even if you are still a novice user in trading, because 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 with the community, eToro pays for it.
It is also very convenient how accessible is the platform, excellent for new traders who are starting with Bitcoin.
Is eToro trustworthy for purchasing Bitcoin?
Many tests from independent consultants have been applied to eToro to verify its fidelity in displaying performance statistics from previous users. And it has been confirmed every time that eToro is very precise with the figures.
eToro fulfills all the strict policies requested by the European Union. Specifically, its head office is in Cyprus, and it is validated by the CySEC or Cyprus Securities Market Commission, which protects up to € 20,000 of the debts that its clients may have with creditors (those from India included).
In Europe, it is backed by the European Financial Instruments Market or MiFID, and in the USA it responds to the Financial Conduct Authority (FCA). Besides all these regulations, you should know that eToro has more than 20 million users worldwide, and it has been operating for fifteen years. In short, we can be certain that our finances are safe.
No less important is their excellent customer service. You can contact them by phone or use their online chat.
How to deposit funds on eToro
When it comes to depositing funds on eToro, there is not much to say, since it is pretty simple. You only need to select “Deposit funds”, set an amount, and choose your payment method. You can pay with PayPal, bank transfer, credit card, Skrill, or Neteller.
Consider that for security reasons, you must be the owner of the account or the credit card.
You can start from $ 200, and there is a limited maximum for unverified accounts. Thus, if your intention is to deposit higher amounts, you should contact Support to verify your account.
Additionally, remember that you can make the deposit in any currency because eToro will make the conversion to USD, but charges a commission for it, so it is better to make the transfer directly in USD.
Differences between futures and CFDs
In case you want to know, these are the major differences between Futures and CFDs:
- Counterparties
- Futures: operations are made with someone else, another investor.
- CFDs: the operations are not made with another individual, the counterparty is the broker.
- Date of expiration:
- Futures: they expire. At that point, your operation is closed even if you are in losses.
- CFDs: on the contrary, they don't expire. Therefore, you can wait for your position to rise before closing.
- Options for trading:
- Futures: options are much more limited
- CFDs: they include lots of different assets, commodities and currencies
- Minimum deposit:
- Futures: you have to invest much more
- CFDs: you can get in with a lower trade size
- Cost of trading and fees:
- Futures: as you have to pay more in the first place, fees are lower
- CFDs: costs are higher
- Leverage:
- Futures: you can't leverage
- CFDs: completely available
Have you heard about “leverage”? We'll put it simply:
another advantage of trading is that it allows you to invest more money than you can have in a given time. For instance, if you have $ 100 and you choose to leverage x2, you will be actually investing $ 200.
Why using leverage and how to do it
Assuming that, for example, you are sure that Bitcoin is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and make more money.
There's the possibility of asking for a loan at your bank or other financial company, but you must know that all the process takes time, and when you receive the money, Bitcoin might be already so expensive (if your guess was right) that trading wouldn't be convenient anymore.
With leverage, you can obtain that amount of money just by moving a finger. It's just like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro which will let you invest much more than you have on the wallet. Before trading, you will find the leverage options as in the image:
When operating in different markets you can use higher leverage. The reason: cryptocurrencies are a value that is invested in the medium-long term, and leverage is used primarily for short-term operations or day trading. But let's see how leverage works.
If for your investment of $ 1,000, you use leverage x2, you will be investing $ 2,000, as we mentioned. eToro gives you the remaining amount to reach that figure.
A week after that, Bitcoin rises 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.
Obviously, the 1k $ from leverage will be deducted, and you'll have $ 1,400 left, of which $ 1000 was yours initially, so the net profit is $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
But watch out: if everything goes ok and the asset increases, you will make profits. On the other hand, if the price falls, you will also lose more money than you invested.
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. Because of that, the terms “Take Profit” and “Stop Loss” are fundamental when using leverage.
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 Bitcoin at $ 100, you request eToro to close when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to keep waiting in case it keeps rising, which could make you lose it all.
Stop Loss is even more important, especially when trading with leverage, since a small loss could be fatal for your wallet. Always remember to set a Stop Loss lower than that suggested by the broker.
How does eToro work?
We said before that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.
You won't have any issues with the interface if you are familiar with any of the most common social networks.
We will talk about the registration process and the different tabs you will find on the page.
You will have to fill in some requested data when registering.
Also, you will have to answer some questions about your experience as an investor.
But don't worry: it's not about passing an exam. They only intend to know how much knowledge you have and what type of assets they can recommend. For instance, if it is your first experience in the investment world, they will not suggest that you invest in futures.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Let's get to know the fundamental sections of the platform.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. This is helpful if you want to purchase a security and you are waiting for its price to fall.
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”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Forex trading
- Index funds
The concept “social trading” comes to life within “People”: that is where you can copy the movements of the investors you find most inspiring with just one click.
You can search and find users according to your interests. When you choose an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. If you invest $ 1000 and the user puts 20% of their funds in an asset, the platform 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 classified into “Top Trader”, “Market” and “Partner”.
The advantage of copying to CopyPortfolios instead of people is that this way the risk will be more diversified. There are all kinds of portfolios that you can identify easily and are classified by sectors. Therefore, if you suspect a specific sector, such as fashion or oil, has good chances to succeed, you should probably look for that specific portfolio.
Trading strategies
You can trade cryptocurrencies in many different ways: from buying and waiting to day trading using price volatility to your advantage.
If you are a beginner in the world of investment, our suggestion is something in the middle: when you open your Bitcoin position, set a stop-loss 15-20% under the highest price, and forget about the operation.
For instance, if you purchase a cryptocurrency at $ 15, it increases to $ 25 and decreases back to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will obtain a good profit.
Perhaps you are wondering: why not selling when the price is at its peak? But unless you are a psychic, that is just impossible. The mentioned strategy can work perfectly and give good results.
And when you have more experience, you can take your first steps with advanced investment strategies, such as going short or using leverage.
How does a virtual portfolio work?
If you are taking your first steps as an investor, you can start by practicing with a “demo” option. Setting a virtual account and trading with fictional funds is very easy.
This option is great for those who are new to this world and want to put their talents to the test before playing for real money. When you create your account, you will start with $ 100,000 of virtual funds to do all the operations that you can think of: not only with Bitcoin, you can also work with a diverse portfolio.
The first attempt is not usually that good. But don't worry, because you can ask eToro to deposit back the virtual funds to your portfolio.
But remember that investing is mostly about being cautious, and using a demo account can have the reverse effect. It is completely different to risk your real savings than to trade with a fake balance that you don't mind losing. Also, investing virtual money can prevent you from learning to control your emotions, something you should be able to do when trading.
Finally, if you want to invest in the medium or long-term, with profits almost guaranteed only by replicating a strategy, it is absurd that you waste years investing with a demo account. On the other hand, you may be interested in the virtual mode if you want to practice with short and medium-term operations.