Contents
eToro is an outstanding broker for those in Philippines who want to buy Bitcoin
Some of its advantages are:
- There are uncountable possibilities for investments
- Leverage is allowed
- It is uncomplicated and manageable
- It offers strategies from successful investors so you can emulate them
- You can short sell
Main site: www.etoro.com/bitcoin
In case you are considering purchasing Bitcoin from Philippines, eToro is certainly the best way to do it.
This platform is well-known for making “social trading” a trend. Social trading is a revolutionary form of investing in which users can replicate the movements of other traders who have been generating income for a long time.
If you are still a newbie or do not have much experience in investments, eToro is very useful, since it automatizes your investment by repeating strategies from other experienced people with a long profit history. And for those skilled investors willing to share their techniques, eToro pays for it.
Another advantage is how easy the platform is, which turns out perfect for new users that are learning all about the trading world.
How to deposit funds on eToro
When it comes to payment on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, put an amount, and choose your payment method. You can pay with PayPal (available for some countries), bank transfer, credit card, Skrill, or Neteller.
Evidently, for security policies, you should be the owner of the account or the credit card.
The minimum amount you can deposit is $ 200 and there is a limited amount if you are not verified, so if you plan to operate with larger sums, contact Support previously to verify your account.
eToro accepts transfers in any currency, but you will have to pay a fee for the conversion to USD. So it is better to use USD directly.
What's the difference between CFDs and futures?
In case you are interested, next you have some major differences between CFDs and Futures:
- Who is the counterparty? In the case of Futures, the counterparty is another investor. In CDFs, it’s the broker (eToro)
- Date of expiration Futures have a determined expirationdate, while CFDs don’t have expiry date
- Markets available for trading Futures include fewer options to trade. CFDs include a wide range of possibilities.
- Minimum deposit Costs for Futures are higher than costs for CFDs.
- Leverage With Futures, you can’t leverage; while with CFDs leverage is always available.
About ETFs
Exchange-Traded Funds or ETFs are similar to index funds. They can be described as a combination of stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Equities
The most common financial instruments are stocks or shares: these are fractions in which an enterprise that chooses to go public is divided. You may own a proportion of a company and obtain a profit, but first, you should know where to invest your money.
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 profits among their shareholders; the latter, on the other hand, do not. Does that mean that you should only consider the former? No, of course not: if a company does not pay every year but has a lot of potential, you should not give it up just because it does not pay you every year, since the capital gain you will get from the sale of the shares can be much greater than what you would earn through dividends.
If you invest in shares that payout, you will receive the funds into your eToro account, and you can withdraw them or invest back. Nevertheless, you can benefit a lot from compound interest, so our suggestion is that you reinvest.
Consider that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive dividends as the trade is a CFD. For long-term investments, it is not advisable to use leverage: you can end up not gaining at all, since you will not receive dividends and, on top of that, you will have to pay commissions while your position is open.
Commodity market
The main benefit of trading with raw materials is that prices are more stable than those of other financial assets. Actually, their intrinsic security is what makes people often invest in raw materials, to take refuge from possible inflation or market volatility. However, the prices of commodities are defined by their demand. Therefore, if a given economic situation provokes higher demand, the prices will also be higher.
Consider that raw materials don't pay dividends. Thus, the only potential further income would come from a future sale of the asset.
There are two basic kinds of commodities: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; and the latter are agricultural goods, like wheat, soybeans, vegetables, or even dairy, among many others.
ETFs
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are publicly traded, that means they can be commercialized at any time at market price. However, their main benefit is that they offer more alternatives compared to stocks, and have lower fees.
Index Funds
This is the best option for people who can invest in the long term, mostly for beginners, because it is less expensive, diversified, and the risk is lower.
You may think differently, but benchmark returns are very difficult to beat and very few fund managers achieve that, apart from some specific cases, like Warren Buffett's.
In practice, if a fund manager achieves to beat the market, it is only for a short time or on a specific occasion. Or perhaps they would charge very high fees and indexing would be a better decision anyway (with minimal commissions).
The good thing about index funds is that they solve those two issues: their fees are minor and in the long term they almost always beat active managers.
What are Contracts for Difference?
You probably have seen the initials CFD repeatedly if you already accessed eToro. Before we explain this further, you must know that cryptocurrency trading on the platform is only CFD if you are short-selling.
We will also explain concepts such as leverage and “going short”, in case you are thinking about day trading cryptocurrency or more advanced operations.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. For example: you believe that the Bitcoin will go down, so probably you think that the best thing to do is wait until it does and then go in. Nevertheless, if it really falls, it might mean extra money for you.
The operation known as “going short” will allow you to do that. It functions, roughly, like this:
- You obtain from a loan 100 units of Bitcoin, which cost $ 5,000 (these numbers are imaginary)
- You sell the 100 units and earn $ 5,000
- As you supposed, the price falls, and the unit of Bitcoin goes from $ 50 to $ 30
- You buy the 100 units again, but their current value is now $ 3,000
- Now you give back the 100 units to whoever loaned them to you
- The difference is yours, so, you will have earned $ 2000
It is far more simple than it may seem. Just take into account that by trading in Bitcoin on eToro, you can make a profit if you foretell downs in the price.
eToro Interface
We already mentioned that one of the best things about eToro is how simple it is. It isn't necessary to read a lot or have previous knowledge to start trading.
Everyone who has used Whatsapp, Pinterest or any of the most common social networks, knows enough to operate with the eToro interface.
Now we will detail the registration process and the different sections of the eToro interface that you should familiarize yourself with.
You will have to provide some personal information when registering.
They will also ask you about your previous trade experience.
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 assets they can suggest. For example, if you have never invested before, they will not recommend that you invest in futures.
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 ideal in case you want to purchase a security and you are waiting for its price to fall.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex
- Index funds
The concept “social trading” comes to life in the section “People”: there, you can duplicate the trading strategies of the users you find most inspiring. You'll be able to see all their profiles and historical performances.
You can search for those traders that you find more interesting. When you choose an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you invest $ 1000 and the trader puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same company or instrument, in this case, $ 200.
Finally, you will also see the CopyPortfolios divided into three main kinds: “Top Trader”, “Market” and “Partner”.
The advantage of copying to CopyPortfolios instead of individual investors is that this way the risk will be more diversified. The portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … You think that a certain sector will prosper in the future? Then look, because surely there is a CopyPortfolio about it.