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eToro is an outstanding broker for those in Philippines who want to purchase Bitcoin Cash
Why do we recommend it?
- Really user-friendly and simple
- It offers strategies from successful investors so you can replicate them
- Accepts short-selling
- You can leverage
- There are tons of investment opportunities
Go to the official site: www.etoro.com/bitcoin-cash
In case you are thinking about investing in Bitcoin Cash from Philippines, eToro is certainly the best option today.
eToro is famous for making “social trading” fashionable. Social trading is an ingenious form of investing in which investors can imitate the movements of other traders who have been generating profits for years.
eToro has solutions for you, especially if you don't have much experience in trading, since it puts your investment on automatic by replicating moves from traders with a long profit history. Also, in case you do have experience in investment, the platform pays you for sharing it.
Another thing to mention is how intuitive the platform is, which turns out perfect for new users that are just learning all about Bitcoin Cash.
About ETFs
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are halfway between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and their commissions are much lower than those of an actively managed fund.
Shares
Stocks or equities are the most common financial assets. Some publicly traded corporations divide their capital into fractions and have many shareholders. By investing money in them, you can own a fraction of a company and obtain dividends.
We can group stocks into two main types: those that pay dividends and those that do not. Those that pay, at the end of the fiscal year, distribute their profits among their shareholders; the latter, on the contrary, do not. Does that mean that you should only consider the former? No, of course not: if a company does not pay out dividends but has a lot of potential, you should not discard that alternative, since selling the shares eventually could pay much more.
When trading on eToro, if you choose a company that pay out dividends, these will be reflected in your balance, and you can collect them in cash or reinvest them. Our suggestion is, if you don't have financial urgencies, that you benefit from compound interest and reinvest it in the company itself.
If you invest in stocks on eToro, you will be able to use leverage to “dope” your trades. But we don't recommend that, since it would be a CFD and you would not receive dividends. Besides, as equities tend to be long-term investments, you will have to pay fees.
Raw materials
Most investors trade with raw materials due to their stability. While other assets tend to fluctuate more, commodity prices vary less and offer security against inflation or market volatility. However, prices do depend on supply and demand in the market, so if the fear of possible inflation produces greater demand for a certain good, the price will also go up.
Note that commodities don't pay dividends. So, the only prospective earnings would come from a sale of the asset.
Commodities are usually classified into hard raw materials, which include precious metals as gold, silver, or copper, as well as industrial metals, and oil; and soft raw materials, which are agricultural products, like soy, cocoa, corn, or rice.
About ETFs
Have you heard about Exchange-traded funds? They are passively managed funds, known for combining the advantages of stocks and mutual funds: they can be exchanged at any moment in the market, but offer much more diversity and considerably lower fees.
If you are not familiar with the term “leverage”, we'll describe it briefly: it is 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.
About leverage, Take Profit and Stop Loss
Let's pretend that you are confident that Bitcoin Cash will raise its price, and you want to “go long”. You have $ 1,000, but you actually can invest more and make more money.
You could consider requesting a credit at your bank, but you must know that all the process takes time, and by the moment you finally get the money, Bitcoin Cash might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is exactly like a loan, and you will only have to click a few times! You will be able to operate with much higher amounts than what you actually have on the platform's wallet. Before trading, you will be able to choose between the different leverage options as in the screenshot:
When operating in different markets you can use higher leverage. This is because leverage is regularly for short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about 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 puts the remaining amount to reach that figure.
A week later turns out that Bitcoin Cash rises up by 20% and now your investment costs 2,400. But you don't want to be too greedy, so you decide, wisely, to sell back.
Obviously, the 1k $ from leverage will be deducted, and you'll 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.
Does it sound too good? The thing is, you can also lose money. If everything goes according to plan and the price goes up, you will make more money in less time; but if the value of the asset goes in the opposite direction, you will also lose more in less time.
Supposing that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but double, $ 40. That is why the concepts of Take Profit and Stop Loss are so important when operating with leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you purchase Bitcoin Cash at $ 100 and you ask eToro to close your operation as soon as the price reaches $ 120. It is very useful to avoid being blinded by enthusiasm: a 20% profit is usually pretty good, but once you see the price has risen, you might consider you can earn even more, which is not always the case. As a result, you might lose money if you don't close on time. So, Take Profit helps you reduce risks when trading.
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 set it lower than that.
Payment methods on eToro
Among the payment methods available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. Depositing money on eToro is so simple: click “Deposit funds”, type a number and choose your preferred method.
Remember that for security reasons, you must be the owner of the account or the credit card.
The minimum you can deposit is $ 200 and there is a maximum limit of how much you can deposit if you are not verified. Therefore, if you plan to operate with higher amounts, you should verify your account previously.
The platform accepts deposits or transfers in any currency, but you will have to pay a fee for the conversion to USD. That is why we suggest, if possible, depositing in USD from the beginning.
About Contracts for Difference
If you have entered eToro previously, you probably noticed that the acronym CFD appears over and over. Before we explain this further, you must know that CFDs on eToro are only possible if you are short-selling or choose leverage higher than x2 (nevertheless, the platform does not even allow this).
FYI, and in case you want to know about day trading cryptocurrency and other more advanced practices, we will also explain terms such as leverage and “going short”.
With CFDs you can operate on eToro even if you are “in red” or don't have a positive balance. Let's say that you have the conviction that the Bitcoin Cash will go down, so you clearly think “if it is going to depreciate, I simply refrain from getting in and I'll go in when it has gone down”. But if you are sure that it is going down, why not making some profits out of that?
You can accomplish that by “going short”. Basically, this is how it works:
- They lend you, let's say, 100 units of Bitcoin Cash, valued at a total of $ 5,000 (these numbers are entirely made up)
- You sell the 100 units and earn $ 5,000
- As you thought, the price falls, and the unit of Bitcoin Cash goes from $ 50 to $ 30
- You purchase all 100 units once again, but now they are worth $ 3,000
- You pay back the 100 units to whom made the loan in the first place
- The rest is yours, so, you will have earned $ 2000
It is really simple. Just keep in mind that by trading in Bitcoin Cash on eToro, you can make a profit if you foretell downs in the price.
How does eToro work?
We said previously that eToro is very easy to manage. Anyone can start using it without having to read endless explanations.
You won't have any problems with the interface if you are familiar with any other social network, like Linkedin or Instagram.
Now we will walk you through the sign-up process and the different sections of the page that you should know.
You will have to provide some personal data when registering.
They will also ask you about your previous investment activities.
But don't worry: it's not about passing an exam. They are only measures to know how much knowledge you have and what type of financial instruments they can recommend. For instance, if you have never invested before, they will not suggest that you invest in futures.
Now we will explain the different sections of the platform.
With the “Set Price Alerts” tool, you'll be able to program an alarm when an asset is at a certain price. Just click the tab and you will be able to set it. This is helpful in case you want to buy an asset and you are waiting for its price to fall.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we mentioned in this guide, the six types of instruments on eToro are:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Forex trading
- Index funds
The concept “social trading” makes sense in the section “People”: that is where you can duplicate the trading strategies of any user you choose.
You will be able to find those traders 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 the amount you want to invest, eToro will automatically replicate their movements, proportionally. For example, if you invest $ 1000 and the user puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
In some cases, it might be preferable to copy from CopyPortfolios than to individuals, because you avoid putting all your eggs in one basket. There are all kinds of portfolios that you can identify easily and are classified by sectors. Thus, in case you suspect a specific industry, like biotechnology or healthcare, will have good incomes in the future, you should probably look for that specific portfolio.
Investment strategies
There are many cryptotrading trategies: for example, you can buy and hold, or you can day trade using price fluctuations to your advantage.
My recommendation for those who are starting to invest is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work.
This means that if, for example, you acquire a cryptocurrency at $ 10, it reaches $ 20 and then falls to $ 12, your stop loss will close your position at $ 16-17 and you will have made a decent profit.
It may sound way better to sell when the cost is at its peak, but that is simply not possible. The mentioned method is much more down-to-earth and it can give great results.
At some point, you can take your first steps with advanced investment strategies, like short-selling or using leverage.