Contents
eToro is an outstanding brokerage for those who want to buy Zcash from India
Some of its benefits are:
- It uses techniques and moves from experienced traders so you can copy them
- Allows you to go short
- User-friendly and straightforward
- Leverage is allowed
- You can make investments in thousands of other goods
Official website in English: www.etoro.com/zcash
You should consider eToro in case you are interested in buying Zcash from India.
eToro is known for making “social trading” fashionable. Social trading is a revolutionary way of investing in which investors can replicate the techniques of other traders who have been making profits for a long time.
If you are still a rookie or do not have much experience in investments, eToro is great for you, because it automatizes your investment by repeating strategies from those who have been doing it for years. Oppositely, if you are an investor willing to share your abilities with other traders, eToro pays you for it.
Besides, this platform is completely manageable, ideal for a user who wants to begin in the Zcash world, without getting crazy with tons of diagrams and numbers.
How does eToro work?
As we have mentioned previously, one of the best things about eToro is its simplicity: anyone can use it without having to read endless explanations.
You won't have any problems with the interface if you have used any of the most common social networks.
We will explain, roughly, the registration process and the different sections that you will find.
You will have to fill in some requested data when registering.
Additionally, you will see that they ask you some questions about your experience as an investor.
But don't feel intimidated. The only intention is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
Next, we will talk about the different sections of the page.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. This is ideal if you want to buy a security that is falling but you believe it will decrease more to a certain point.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Forex
- Index funds
In the section “People”, you can find the profiles of eToro users and their performances. This is where you can replicate the movements of the investors that you find most inspiring.
You can search for those investors that best suit your interests: by average profits, types of instruments or risk level, for example. Just indicate the amount you want to invest and eToro will be in charge of replicating the movements of the selected investor, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, the platform will invest also 10% of your funds (that is, $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of people is that this way you will diversify the risk. Besides, the different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … You think that a certain sector will prosper anytime soon? Then you will surely find a CopyPortfolio about it.
BTW, do you know what leverage is? We'll put it simply:
another good thing about trading is that it lets you invest more money than what you really have. Let's say that you have $ 100 and you choose to leverage x2, you will be actually investing $ 200.
About leverage, Take Profit and Stop Loss
Suppose now that you are sure that the price of Zcash is going to raise its price, and you choose to take a long position.
You are absolutely certain that Zcash will rise, but you can only invest $ 1,000. Despite that, why miss the opportunity to make more money?
You could go to your bank, request a credit, wait for it to be accepted and receiving the money, send the money to eToro, confirm that it arrived, and then buy Zcash… But maybe once you have made all that, your prediction could've been confirmed a long time ago, and Zcash would be already so high that it is not worth trading.
Thanks to leverage, you can obtain that amount of money just by moving a finger. It's just like borrowing money, but much easier and quicker, and with the benefit that you will be getting it directly from eToro which will let you invest much more than you have on the platform's wallet. As in the image below, you will see the different options you have:
With other assets, the ability to leverage is greater. Why? Because leverage is most common in 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 choose leverage x2, your investment is 2 * $ 1,000, that is to say, $ 2,000. eToro gives you the remaining amount to reach that figure.
A week later Zcash rises up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Zcash. But you don't want to be too greedy, so you decide, wisely, to sell back.
You need to pay back the $ 1,000. You have $ 1,400 left, of which $ 1000 is the money you put in yourself, so the net profit is $ 400.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
Still wondering where the catch is? The trick is that the risk of losing out also increases. If everything goes according to plan and the price goes up, you will earn more money in less time; however, if the value of the asset goes down, you will also lose more in less time.
For example: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. For that reason, when operating with leverage it is very important to know other two terms: Take Profit and Stop Loss.
Take Profit is a limit you can set when trading: you set the platform to sell your assets once they get to a point above the entry price. For instance, you can buy Zcash at $ 100 and request that your position is closed automatically when it reaches $ 120. It is very useful to avoid being blinded by greed: we would all take a 20% profit in the beginning, but when you reach that 20% it is easy to ask yourself “what if this keeps going up and it is a mistake to exit?”. It's like you got assured in advance that you will act prudently.
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). Consider that eToro will recommend a limit for Stop Loss, but you should place it lower than the platform suggests.
How to deposit funds into your eToro account
Within the payment methods available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. Depositing money with eToro is so simple: click “Deposit funds”, type a number and select a payment method from the previous ones.
Consider that for security policies, you must be the holder of the credit card or the account.
The lowest amount you can deposit is $ 200, and there is a maximum authorized if you are not verified. Therefore, in case you want to trade with larger sums, you should verify your account first.
You can make the deposit in any currency and eToro will do the conversion to USD. However, it is advisable to use USD anyway since the platform charges a fee.
What are ETFs?
What do you know about Exchange-traded funds or ETFs? They are passively managed funds, known for merging the advantages of stocks and mutual funds: they can be exchanged regularly at market price, but include a much wider diversity of assets and considerably lower fees.
Exchange-Traded Funds
Have you heard about Exchange-traded funds? They are passively managed funds, known for combining the benefits of stocks and mutual funds, because they can be exchanged at any moment in the market, but have much more variety and the rates are significantly lower.
Commodity market
Most people invest in raw materials due to their stability. While other assets present higher fluctuation, commodity prices vary less and offer safety against inflation or market volatility. Nevertheless, prices do depend on supply and demand, so if an economic situation produces higher demand for a certain good, its cost will also increase.
Note that, unlike shares, raw materials don't pay dividends. So, by investing in them you will only have a further income by selling them back.
There are two main kinds of commodities: hard raw materials and soft raw materials. The former are 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 sugar, coffee, corn, soy.
Futures Vs CFD
What are the main differences between Futures and CFDs?
- Which are the counterparties? In the case of Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- Date of expiration Futures expire in a variable given date. CFDs don’t expire
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum investment amount Costs for Futures are higher than costs for CFDs.
- Leverage With Futures, it isn’t possible; while with CFDs it is.
What are Contracts for Difference?
If you have entered eToro before, you probably realized that the acronym CFD appears repeatedly. We will come back to it, but you should know first that CFDs on eToro are only possible if you are short-selling or use leverage over x2 (although this is not even available on eToro).
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.
eToro allows you not only to bet “in the black”, but with CFDs you can also bet “in negative”. Let's say that you have the certitude that the Zcash will go down, so the logical thing is to think “if it is going to depreciate (go down in price), I'll just wait until it does”. However, if it actually goes down, you can earn some money out of that.
The practice known as “going short” will allow you to do that. It works, pretty much, this way:
- Someone lends you, let's say, 100 units of Zcash, valued at a total of $ 5,000 (these are completely made up numbers)
- You sell the 100 units and earn $ 5,000
- As you thought, the price falls, and the unit of Zcash goes from $ 50 to $ 30
- Again, you purchase the 100 units, but now they are worth $ 3,000
- Now you give back the 100 units to whoever made the loan
- You will have made $ 2000, since you keep the difference
It is really simple. Just keep in mind that by trading in Zcash on eToro, you can make a profit if you foretell downs in the price.
Investment strategies
You can trade cryptocurrencies in many different ways: from purchasing and waiting to day trading (taking advantage of market volatility).
My suggestion for those who are starting to invest is something in the middle: when you open your position, set a dynamic stop loss 15-20% below the maximum price, and forget about the operation.
For example, if you purchase a cryptocurrency when its price is $ 15, it rises up to $ 25 and decreases back to $17, the stop-loss will allow your operation to be closed, maybe at $ 21 or $ 22. Therefore, you will get a pretty good income.
Perhaps you are wondering: why not selling when the cost is at its peak? But that would only work for a psychic or a fortune-teller. The mentioned method is completely realistic and can work out perfectly if it is well applied.
Later on, you will be able to apply more complex techniques, such as short-selling or using leverage.
How does a demo account work?
In case you are beginning as an investor, the possibility to operate in “demo” mode may be helpful. Setting a virtual account and trading with fictional funds is very simple.
This can be a great way of practicing before starting to trade with real funds. You will have an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you will be able to operate with a variety of assets, not just with Zcash.
The first attempt is not usually that good. But you can ask eToro to replenish the virtual $ 100k to your portfolio, and the second try you should do better.
Nevertheless, keep in mind that you need to be prudent for trading, and using a demo account can have an adverse effect. It is completely different to risk your real savings than to trade with a fake balance which loss does not suppose any drama.
And of course, the demo mode is kind of pointless if you intend to trade in the medium or long-term, since you would be wasting years. Demo accounts may be useful for trying out short or medium-term operations.