Contents
Why we reccomend eToro for acquiring Monero from Nigeria?
Why do we recommend it?
- It's simple and user-friendly
- It takes strategies from experienced investors so you can replicate them
- Accepts short-selling
- Leverage is allowed
- It is possible to make investments in tons of different products
Official main site: www.etoro.com/monero
You should consider eToro in case you are interested in buying Monero from Nigeria.
This platform is famous for making “social trading” fashionable. Social trading is an ingenious form of investing in which traders can emulate the strategies of other investors who have been generating income for years.
If you are still a newbie 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. Additionally, in case you are an investor, the platform pays for your knowledge.
Besides, the interface of this site is amazingly manageable, great for users who want to start learning about Monero and trading, without ending up overwhelmed with tons of numbers and information.
How does eToro work?
We said previously that eToro is very friendly and intuitive. Anyone can start investing without previous experience or long explanations.
If you have used any of the most popular social networks today, such as Twitter or Facebook, you can perfectly manage eToro's interface.
We will explain, roughly, the registration steps and the different tabs that you will see on the platform.
When you register, you will have to enter all the information that eToro asks for: first and last name, address…
They will also ask you about your previous experience as an investor.
But don't feel intimidated. They only intend to find out about your previous experience and knowledge to determine which financial instruments to recommend for you.
Let's get to know the different sections of the platform.
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 in case you want to buy an asset and you are waiting for it to decrease.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find the tabs: “Instruments”, “People” and “CopyPortfolios”. And we already discussed the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Currencies
- Index funds
The concept “social trading” comes to life in the section “People”: that is where you can duplicate the movements of the users you find most inspiring with just one click.
You will be able to find those users that you find more interesting. You can search by risk level, trading market, or average profits, among other filters. When you choose an investor and indicate how much you want to invest, eToro will automatically replicate their movements, in proportion. For example, if you have $ 1000 and the trader 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 find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
The advantage of using CopyPortfolios instead of copying particular traders is that this way the risk will be more diversified. There are all kinds of portfolios that you can find easily and are classified by sectors. Thus, in case you suspect a specific industry, like biotechnology or oil, will prosper in the future, you can find that specific portfolio and invest in it.
If you haven't heard about “leverage”, we'll put it short. When trading, it's the capacity of multiplying your investment without putting extra money. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
About leverage, Take Profit and Stop Loss
Assuming that, for example, you are positive that Monero is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and earn higher profits.
You could consider asking for a loan, but it is a process that takes time, and when you receive the money, Monero might be already at a much higher price, so you wouldn't be able to invest the way you planned.
With leverage, you can get that amount of money really easily. It's 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. You will simply see the different options as in the image below:
Trading with other assets allows you to use higher leverage. Why? Because leverage is most used for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was “borrowed” from eToro).
- Then, turns out that Monero does increases, as you assumed, and now the price of your investment is $ 2,400 (20% higher), so you decide to sell back.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
But watch out: if everything goes ok and the price goes up, you will make money. However, if the price falls, you will also lose more money in the blink of an eye.
Supposing that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. That is why to operate with leverage it is very important to be familiar with 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 Monero at $ 100 and ask eToro to close your position automatically when it goes up to $ 120. It is very useful to avoid being blinded by greed: a 20% profit is usually very good, but once you see it goes up, you might think you can earn even more, which is not always the case. Consequently, you might lose money if you don't close on time. So, Take Profit helps you to trade more safely.
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). Take into account that eToro will recommend a limit for Stop Loss, but it is better to place it lower than the platform suggests.
How to deposit funds into your eToro account
When it comes to payment on eToro, there is not much to say, since it is really straightforward. You only need to select “Deposit funds”, put an amount, and choose the payment option you prefer. You can use PayPal, bank transfer, credit card, Skrill, or Neteller.
Evidently, for security reasons, you should be the holder of the account or the credit card.
The lowest amount is $ 200, and there is a maximum authorized if you are not verified, so if you want to trade with larger sums, contact Support previously to verify your account.
The platform allows transfers in any currency, but you will have to pay a fee for the conversion to USD. That is why we suggest, if it is in your hands, depositing in USD from the beginning.
What's the difference between CFDs and futures?
What are the differences between CFDs and Futures?
- Who is the counterparty? With Futures, the counterparty is another trader. In CDFs, it’s the broker (eToro)
- Date of expiry Futures expire in a variable given date. CFDs don’t have expiration date
- Markets available for trading The market for Futures is narrower. CFDs include a wide range of possibilities.
- Minimum deposit amount or “trade size” Being higher figures, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher, although not excessively.
- Leverage With Futures, it isn’t possible; while with CFDs it is.
About Contracts for Difference
If you have entered eToro before, you probably realized that the acronym CFD appears all the time. We will explain its meaning now, but you should know first that cryptocurrency trading on the platform is only CFD when you short sell.
We will also refer to terms like going short and leverage, in case you are interested in day trading cryptocurrency or more advanced practices.
With CFDs you can bet on the platform even if you are “in red” or don't have a positive balance. In a hypothetical case: you have the conviction that the Monero will go down, so perhaps you consider that the best thing to do is refrain from getting in until it does. Nevertheless, if it actually goes down, you can make some profits out of that.
You can do that by “going short”. More or less, it works like this:
- You ask someone for a loan of, let's say, 100 units of Monero, which total price at that moment is $ 5,000 (obviously, these figures are made up)
- Then, you sell them at their price at the moment, $ 5,000
- As you supposed, it devaluates, and the unit of Monero goes from $ 50 to $ 30
- You buy the 100 units again, but their current value is now $ 3,000
- Then you return the 100 units to the loaner
- The $ 2000 difference is yours
Keep in mind that it sounds much more tricky than how eToro CFDs actually work: we can summarize this whole operation by saying that by trading in Monero you can also earn money if you foretell the downs.
Investment strategies
There are different methods or ways for crypto trading, like buying and holding or day trading, for naming just a few.
In case you are a beginner in the world of investment, my recommendation is a middle point: placing a dynamic stop-loss (15-20% under the highest price) when you open your Monero operation and wait for it to work on its own.
For example, if you purchase a cryptocurrency when its price is $ 15, then it increases to $ 25 and falls again to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Thus, you will obtain a fine profit.
It may sound more appealing to sell when the price is at its peak, but that is simply not possible. The mentioned strategy is much more realistic and it can give great results.
Eventually, you will be ready for using advanced investment techniques, such as using leverage or going short to profit from bear markets.
How does a demo account work?
Are you taking your first steps as an investor? Using a demo account can be very helpful. Just make sure the virtual mode is set and you can start practicing with an “imaginary” balance.
A virtual portfolio can help you to practice and gain experience before starting to trade with real funds. When you create your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of financial instruments available on eToro (not just with Monero).
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, and the second try you should do better.
Nevertheless, remember that you need to be prudent for trading, and demo account trading can have an adverse effect. It is completely different to risk your real savings than to trade with virtual funds which loss does not suppose any drama.
And of course, if you want to invest in the medium or long-term, with profits almost assured just by duplicating an index, it is absurd that you invest in the virtual mode and wait for years. On the other hand, short and medium-term investments are perfect to try out with the demo mode.