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eToro is an excellent broker for those who are in Nigeria and want to acquire Dash
Advantages:
- Very intuitive and straightforward
- It offers other successful investment strategies so you can replicate them
- Allows short-selling
- You can leverage
- There are lots of investment possibilities
Main site: www.etoro.com/dash
In case you are thinking about investing in Dash from Nigeria, eToro may be the best way to do it.
“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become trendy because of eToro.
eToro is very helpful if you don't have much experience in trading, since it automatizes your investment by repeating strategies from those who have been doing it for years. Additionally, in case you do have experience in investment, the platform pays you for sharing it with others.
Besides, the platform is so uncomplicated, great for users who want to begin in the Dash world, without stressing over lots of graphs and figures.
How do Contracts for Difference Function?
You probably have seen the initials CFD more than once if you entered eToro before. We will explain exactly what this means, but first, you should know that cryptocurrency operations on eToro are only CFDs when you go short.
FYI, and if you are considering day trading cryptocurrency or other advanced trading practices, below we will also explain concepts like short-selling and leverage.
eToro lets you bet both “in the black” and “in red”. Let's say that you believe that the Dash will go down, so perhaps you consider that the best thing to do is refrain from getting in until it actually falls. However, if you are convinced that it is going down, why not take advantage of that?
The operation known as “going short” will allow you to do that. It works, more or less, this way:
- Someone lends you, for example, 100 units of Dash, valued at a total of $ 5,000 (these numbers are completely made up)
- You sell the 100 units and earn $ 5,000
- The Dash goes from $ 50 to $ 30 (as you predicted, it devaluates)
- Again, you purchase the 100 units, but now their value is $ 3,000
- Now you return the 100 units
- The difference is yours, so, you will have made $ 2000
Consider that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Dash you can also earn money if you predict the downs.
How are CFDs and futures different?
How are Futures and CFDs different?
- Which are the counterparties? With Futures, the counterparty is another trader. In CDFs, it’s the broker (eToro)
- When do they expire? Futures have a determined expirationdate, while CFDs don’t expire
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum deposit Being higher numbers, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher, although not too much.
- Use of leverage With Futures, it isn’t possible; while with CFDs it is.
Are you familiar with the term “leverage”? Just in case, we'll define it shortly:
trading allows you to invest more money than what you really have. Let's say that you have $ 100 and you use x2 leverage, you will be really investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's pretend that you are confident that Dash will raise its price, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
Possibly, you could ask a financial company for a credit, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then acquire Dash… However, when you finish doing all that, probably Dash would be already at a much higher price (if your prediction got confirmed), and it wouldn't be a good idea to invest.
Leverage is exactly like a credit, but it is only a few clicks away! You will be able to invest (and earn) much more than what you have on the platform. Before trading, you will be able to choose between the different options as in the image:
With other assets, you can use more leverage. This is because leverage is most common in short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's see how this works in the practice.
You begin with $ 1,000 and pick leverage x2, then you would really invest $ 2,000 (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A couple of days pass and turns out that you were right: Dash 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 was yours initially, so the net profit is $ 400.
With $ 1000 you get $ 400, in other words, 40% more. Not bad, right?
But not everything is wonderful. If everything goes ok and the price goes up, you will make money. Nevertheless, if the price falls, you will also lose more money really fast.
For example: if the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. Because of that, the concepts of Take Profit and Stop Loss are so important 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 bought Dash at $ 100, you program eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps rising, which could be a mistake since the price could go down again.
Stop Loss is even more necessary, particularly when trading with leverage, since a small loss could have a significant impact. Consider that eToro will recommend a limit for Stop Loss, but it is better to place it lower than that.
What are ETFs?
ETFs or Exchange-Traded Funds are a kind of passively managed fund, similar to index funds. They can be described as a merge between stocks and mutual funds, including the best of both. They are publicly traded and therefore can be bought and sold at any moment at market price. But their main benefit is that they offer more alternatives compared to stocks, and their fees are much lower than those of an actively managed fund.
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 exchanged regularly at market price, but have much more variety and considerably lower fees.
Currency market
Forex or currency trading is the exchange between two currencies in order to gain money through the operation.
In case you decide to exchange EUR and USD, you acquire euros at their price in dollars, with the expectation that the first currency (the euro) will increase compared to the second (the dollar), to make a profit by selling it. Assume you entered when the price of one euro is 1.10 USD and you leave when a euro is worth 1.15: as a result, you will gain that margin.
You may be thinking that this form of trading requires investing considerable amounts, and you're right, since increases in prices are never that dramatic, and if you use a lot of leverage to counter that, you will take a considerable risk. Our advice for those starting in the world of trading is to choose another market to begin with, since Forex is not the safest.
eToro allows trading with the most usual currency pairs but take into account that in this market sales are made through CFDs, so you will not own the underlying asset.
Commodity market
Most people invest in raw materials because of their stability. While other assets present higher fluctuation, raw materials prices vary less and offer safety against inflation or market volatility. However, prices are subject to supply and demand in the market, so if the fear of possible inflation provokes greater demand for a certain good, the price will also rise.
Keep in mind that the only intended income from the investment in raw materials will come from their further sale because these kinds of assets do not distribute dividends or pay interest.
Raw materials are generally classified 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.
Trading strategies
There are different methods or ways for crypto trading, such as day trading or buying and holding, for naming just a couple.
My recommendation for those who are starting to invest is going halfway between the two options: when you open your Dash position, place a dynamic stop loss 15-20% below the top price, and let the rest happen on its own.
Therefore, if for example you acquire a cryptocurrency at $ 10, it reaches $ 20 and then decreases to $ 12, your position will be closed at $ 16-17 and you will have earned a considerable profit.
It might sound more appealing to sell when the cost is at its maximum, but that is simply not possible. The mentioned method is much more realistic and it can give great results.
Sooner or later, you will be ready for applying advanced investment strategies, such as using leverage or going short to profit from bear markets.
Is eToro trustworthy for purchasing Dash?
eToro is very meticulous with the data about past performances from users, and its reliability has been independently tested several times.
eToro complies with all the strict policies of the European Union, legislation in which it is found. Specifically, its main offices are in Cyprus, where it is validated by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 of the debts from its clients (those from Nigeria included).
In Europe, it is backed by the European Financial Instruments Market (MiFID), and in the USA it is under the control of the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has been active for fifteen years and that it has more than 20 million users around the world, so we can rest assured that our funds are in good hands.
Their excellent customer service is also worth mentioning. They have a phone number for assistance, a ticket system, and a live chat.
How does eToro work?
As we have mentioned previously, one of the best features of eToro is its simplicity: anyone can use it without having to read endless explanatory texts.
You won't have any problems with the interface if you have used any of the most common social networks.
We will talk about the registration process and the different sections of eToro that you should know.
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. It is only a way of finding out how much knowledge you have and what type of financial instruments they can recommend. For instance, if it is your first experience in the investment world, they will not recommend that you invest in futures.
Let's get to know the different sections of the page.
With the “Set Price Alerts” tool, you'll be able to program an alert when a security is at a certain price. Just click the tab and you will be able to set it. This is perfect in case you want to purchase an asset that is falling but you believe it will decrease more to a certain point.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we mentioned previously, the six types of instruments on eToro are:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Forex
- Index funds
In “People”, you will find the profiles of eToro users and their historical performance. This is where you can copy with just one click the movements of your preferred traders.
Through the search engine, you can find the investors that best suit your interests: by average profits, types of instruments or risk level, for instance. Just indicate the amount of your investment and eToro itself will be in charge of replicating the movements made by the investor you selected, in proportion. This means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, eToro will invest also 10% of your money (in this case $ 100) in that same asset.
In this part you will also find the three main types of CopyPortfolios, which are Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of specific traders is that this way the risk will be more diversified. There are all kinds of portfolios that you can recognize easily and are divided by sectors. So, if you suspect a specific sector, like e-commerce or drones, has good chances to succeed, you can look for that specific portfolio and invest.