Contents
eToro, an advisable broker for acquiring Binance Coin from New Zealand
Why do we recommend it?
- There are uncountable investment opportunities
- eToro offers leverage
- Really user-friendly and simple
- It offers strategies from successful traders so you can copy them
- You can short sell
Official homepage: www.etoro.com/binance-coin
You should certainly consider eToro if you are thinking about investing in Binance Coin from New Zealand.
eToro is popular for making “social trading” a trend. Social trading is an ingenious way of investing in which traders can emulate the moves of other investors who have been generating income for years.
If you are a novice user or haven't gained much investment experience, eToro is very useful, since it automatizes your investment by repeating strategies from those who have been doing it for years. And for those skilled investors willing to share their techniques, eToro pays for it.
Another thing to mention is how manageable the interface is, which turns out perfect for new users that are just learning all about the trading world.
Is eToro reliable for purchasing Binance Coin?
eToro has been independently tested once and again to certify its reliability in reporting previous performance statistics. The results have always confirmed that eToro is rigorous with the figures.
Legally, eToro complies with all the demanding policies of the European Union, legislation in which it is found. Specifically, its head office is in Cyprus, where 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 New Zealand 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 more than 20 million users around the world, and it has been operating for the last fifteen years. In short, we can be confident that our money is in safe hands.
Their excellent customer service is also worth mentioning. They have a phone number for assistance, a ticket system, and a live chat.
Differences between futures and CFDs
What are the main differences between CFDs and Futures?
- 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, while CFDs don’t have expiry date
- Markets available for trading The market for Futures is narrower. With CFDs you can trade in several different markets.
- Minimum investment amount or “trade size” Costs for Futures are higher than costs for CFDs.
- Use of leverage With Futures, it isn’t possible; while with CFDs it is.
In case you are not familiar with the term “leverage”, we'll describe it briefly: it is, simply, the possibility to invest a higher amount than you actually have. For example, you can enter with $ 100, but if you use x2 leverage, you will be investing $ 200.
Leverage, Take Profit and Stop Loss
Suppose now that you are sure that the price of Binance Coin is going to raise its price, thus you decide to take a long position.
You are positive that Binance Coin will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
You could consider asking for a loan, but it is a process that takes time, and by the moment you receive the money, Binance Coin might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is like a loan, and you will only have to click a few times! You will be able to operate with 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:
Trading with other assets allows you to use even more leverage. The reason: cryptocurrencies regularly represent medium-long term investments. However, leverage is used especially for short-term operations or day trading. 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 are a “loan” from eToro).
- Then, turns out that Binance Coin does increases, as you thought, 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 the net profit is $ 400, since the other $1,000 was yours from the beginning.
As you can see, with $ 1000 you get a profit of $ 400, no less than a profit of 40%. That's not bad at all.
But watch out: if everything goes ok and the price goes up, you will make profits. Nevertheless, if the asset decreases, you will also lose more money than you invested.
Supposing that the price didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but $ 40, because of the leverage. That is why to operate with leverage it is essential 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 Binance Coin at $ 100, you request eToro to close when 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 operating with leverage, since a small loss could be tragic for your wallet. Always remember to set a Stop Loss lower than that suggested by eToro.
How to use eToro
We mentioned previously that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.
If you have used before any of the most common social networks, like Instagram or Linkedin, you can perfectly use this platform.
We will explain the registration process and the different sections that you will find.
When you register, you will have to fill in your personal data.
To complete your registration, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. They only intend to find out about your previous experience and knowledge to determine which assets to recommend for you.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's see what the different sections of the platform are.
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 that is falling but you believe it will decrease more to a certain point.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
The concept “social trading” comes to life in the section “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 will be able to search and find users according to your interests. You can apply filters like risk level, average profits, or financial market. When you select an investor and indicate how much you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you invest $ 1000 and the trader puts 20% of their funds in an asset, eToro will invest $ 200 of your funds in the same asset or company as well.
You will also find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Sometimes you might prefer copying to CopyPortfolios than to individuals, since the former offer more diversity. There are all kinds of portfolios that you can identify easily and are divided by sectors. Therefore, in case you think a specific sector, such as gaming or healthcare, has good chances to succeed, you should look for that specific portfolio.
Investment strategies
There are different methods or ways for crypto trading, such as buying and holding or day trading (and using market fluctuation in your favor), for naming just a couple.
My recommendation for those who are beginning to trade is something in the middle: when you open your Binance Coin position, set a stop-loss 15-20% under the maximum price, and forget about the operation.
For example, if you purchase a cryptocurrency when it is worth $ 15, it rises up to $ 25 and decreases back to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Hence, you will obtain a good profit.
It might sound more appealing to sell when the price is at its peak, but unless you're psychic, that will never be possible. The above strategy is much more down-to-earth and it can give great results.
Sooner or later, you will be ready for using more advanced investment techniques, like using leverage or going short to profit from bear markets.
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.
A virtual account can be a good way of gaining confidence before starting to trade with real funds. When you open your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of assets available on eToro (not only with Binance Coin).
The first attempt is not usually that good. But you can ask support to deposit back the virtual $ 100k to your account, 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 the reverse effect. It is not the same to risk your real savings than to trade with virtual funds that you don't mind losing. Also, using fake money can prevent you from learning to control your emotions, something you should be able to do when trading.
As you may suppose, if you are interested in trading in the long or medium-term, it makes no sense that you try the virtual mode and wait for years. On the other hand, it can be very useful if you want to practice short and medium-term investment.