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Why we reccomend eToro for trading with Bitcoin Cash from New Zealand?
Why do we recommend it?
- It is possible to make investments in plenty of other goods
- eToro offers leverage
- Really intuitive and simple
- It uses strategies from successful traders so you can replicate them
- Allows you to go short
Go to the official page in English: www.etoro.com/bitcoin-cash
In case you are considering it, eToro is the best option today to purchase Bitcoin Cash from New Zealand.
This broker is well-known for making “social trading” fashionable, a revolutionary way of investing in which traders can repeat the strategies of other investors who have been generating income for years.
eToro has solutions for you, even if you don't have much experience in trading. You can rest assured that you are doing a smart investment move when replicating those from subjects with a great deal of expertise. Oppositely, if you are an expert in the field willing to share your knowledge with others, eToro pays up for it.
It is also very convenient how accessible is this platform, ideal for new traders who are starting with Bitcoin Cash.
By the way, do you know what leverage is? Just in case, we'll put it simply:
the good thing about trading is that it lets you invest higher figures than what you really have. That is, if you have $ 100 and you put them with x2 leverage, the amount of your investment will be $ 200.
What you should know about leverage
Assuming that, for instance, you are positive that Bitcoin Cash 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.
There's the possibility of asking for a loan at your bank or other financial company, but it is a process that takes time, and when you receive the money, Bitcoin Cash might be already so expensive that investing wouldn't be convenient anymore.
Thanks to leverage, you can obtain that amount really easily. It's exactly like borrowing money, but much better: from eToro itself. You can get financing to operate with much more money than you actually have on the platform. Before trading, you will how much leverage to use as in the screenshot:
Trading with other assets allows you to use more leverage. This is because cryptocurrencies usually represent medium-long term investments, and leverage is used primarily for short-term operations or day trading. That said, I'm going to explain better how leverage works.
You start with $ 1,000 and pick leverage x2, then you would have $ 2,000 to invest, since eToro would put the other $ 1,000 (which is double the initial amount).
A week later Bitcoin Cash goes up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Bitcoin Cash. So, a wise decision is to sell them back now.
You will have to give back the $ 1,000 of leverage and you will have made $ 400 (since the other $ 1,000 was your initial investment).
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
Does it sound too good? 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 profits in little time; but in the opposite case, you will also lose more really quickly.
Let's suppose that the asset 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 the concepts of Take Profit and Stop Loss are crucial when using leverage.
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 Bitcoin Cash at $ 100 and request that your position is closed automatically when it goes up to $ 120. It is very useful to avoid being blinded by greed: a 20% profit is usually pretty good, but once you see the price has risen, you might want to gain a bit more and decide to wait, but this could be a mistake. So, Take Profit helps you reduce risks when trading.
Stop Loss is even more necessary, especially when operating with leverage, since a small loss could have a significant impact on your wallet. Consider that eToro will recommend a limit for Stop Loss, but it is better to set it lower than the platform suggests.
Is eToro safe for purchasing Bitcoin Cash?
eToro has been independently tested several times to verify its reliability in displaying previous performance statistics. The results have always confirmed that eToro is very precise with the data.
In the legal aspect, eToro fulfills all the strict regulations of the European Union, legislation in which it is found. Specifically, its head office is in Cyprus, where it is certified by the Cyprus Securities Market Commission or CySEC, which can cover up to € 20,000 of the debts that its clients may have with creditors (those from New Zealand included).
It is also supported by the European Financial Instruments Market or 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.
Finally, their excellent customer service is also worth mentioning. You can contact them by phone or use their live chat.
Virtual portfolio
For those who still don't have much experience in investing, using a demo account can be useful. Just make sure the virtual mode is set in the top left corner of the page and you can start trading with “fake” funds.
This is a great tool for those who want to put their talents to the test before playing for real funds. When you open your account, you will start with $ 100,000 of virtual funds to do your operations, not only with Bitcoin Cash, but you can also create a diverse portfolio.
Don't worry, since if you lose all your virtual balance, you can contact support so they can add back the $ 100,000 to your demo account and you can try again.
Nevertheless, remember 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 false balance that you don't mind losing. Besides, using fake money can prevent you from learning to control your emotions, as a true investor should.
Finally, if you are interested in investing in the long or medium-term, there is no point in using the virtual mode and having to wait for years. But it can be very useful if you want to practice short and medium-term investment.
How does eToro work?
We mentioned before that eToro is very friendly and intuitive. Anyone can start investing without previous experience or long explanations.
You won't have any issues with the interface if you are familiar with any of the most common social networks.
We will explain, roughly, the registration process and the different tabs that you will see.
First, you will have to fill in your personal data.
Additionally, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. 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.
Let's review the different functions of the page.
“Set Price Alerts” allows you to put alerts on the price of certain securities. You just have to click on the three points at the end of the line and you will be able to program a price alert. This is very helpful when you are after a security that is falling, but it seems to you that it has not finished falling yet.
“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 discussed before, the types of financial instruments available on are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex
- Index funds
The concept “social trading” makes sense within “People”: that is where you can duplicate the movements of the best investors with just one click.
You can search for those investors that you find more interesting: by average earnings, types of instruments or risk level, for example. You just have to choose the amount of your investment and eToro itself will be in charge of replicating the movements made by the investor you selected, in proportion. “In proportion” means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your balance in that asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The advantage of copying to CopyPortfolios instead of people is that this way the risk is more diversified. There are all kinds of portfolios that you can recognize easily and are classified by sectors. Thus, in case you suspect a specific industry, like gaming or oil, has a good chance of prospering, you should probably look for that specific portfolio.