Contents
eToro, an advisable broker for those who want to purchase Gram from Philippines
Advantages:
- There are tons of possibilities for investments
- eToro offers leverage
- User-friendly and straightforward
- It offers other successful investment strategies so you can copy them
- You can go short
Main site: www.etoro.com/gram
If you are interested in investing in Gram from Philippines, eToro may be the best way to do it.
This broker is known for making “social trading” a trend, a revolutionary way of investing in which investors can imitate the movements of other traders who have been generating earnings for years.
If you are a beginner or do not have much experience in investments, eToro is great for you, since it puts your investment on automatic 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.
Another advantage is how intuitive the interface is, which turns out perfect for new users that are just learning all about Gram.
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.
Everyone who has used Instagram, Facebook or any of the most common social networks, knows enough to operate with the eToro interface.
Now we are going to walk you through the sign-up process and the different sections of the page that you should familiarize yourself with.
You will have to fill in some information requested when registering.
They will also ask you about your previous trade experience.
However, it is not like you are answering a test. It is only a way of finding out how much knowledge you have and what type of financial instruments they can suggest. For instance, if you have never invested before, they will not suggest that you invest in futures.
Let's see what the different sections of the page are.
In “Set Price Alerts”, you have, as its name says, the possibility to put alarms on the price of certain securities. You only need to click on the three points at the end of the line and you will be able to program a price alarm. It is a very useful tool for when you are after a security that is falling, but it seems to you that it will decrease even more.
“News Feed” is the more “social” section. There, users can interact and share their knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the kinds of assets on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Commodities
- Currencies
- Index funds
The concept “social trading” comes to life within “People”: that is where you can replicate the strategies of the best investors with just one click.
You can search for those users that you find more interesting: by average profits, types of assets or risk level, for example. You just have to choose the amount of your investment and eToro will be in charge of replicating the movements of the selected investor, in proportion. “In proportion” means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will also invest $ 100 of your money in that asset.
In this section you will also see the three main types of CopyPortfolios, which are Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of particular traders is that this way you will diversify the risk. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … You think that a certain industry is going to succeed anytime soon? Then look, because surely there is a CopyPortfolio about it.
Are you familiar with the term “leverage”? Just in case, we'll put it simply:
trading allows you to invest more money than what you really have. That is, if you have $ 100 and you use x2 leverage, you will be really investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's assume that you are sure that the price of Gram is about to raise its price, therefore you decide to take a long position.
You are completely certain that Gram will go up, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
Possibly, you could ask your bank for a credit, put an asset as collateral, wait for it to be accepted, wait for the money, and then obtain Gram… But by then it is possible that your prediction was confirmed already and Gram is so high that it is not worth trading.
With leverage, you can get that amount of money really easily. It's exactly like a loan, but much better: you will get it from eToro, which allows you to invest a lot more than you have on the platform. Before trading, you will find the leverage options as in the image below:
Trading with other assets allows you to use even more leverage. Why? Because cryptocurrencies are usually medium-long term investments. However, leverage is used mainly for day trading or short-term operations. But let's deepen a bit more on how all this works.
If for your investment of $ 1,000, you choose leverage x2, you will be investing $ 2,000, as we mentioned. eToro puts the remaining amount to reach that figure.
A week later turns out that Gram rises up by 20% and now your investment costs 2,400. But you don't want to be too reckless, so you decide, wisely, to sell again.
You will have to pay 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 quite good.
But there's always a downside. If everything goes ok and the price rises, you will make money. However, if the price falls, you will also lose more money than you invested.
Let's say 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. Because of that, the concepts of Take Profit and Stop Loss are fundamental when operating with leverage.
Take Profit is the automatic order to sell once the asset is above the entry price: you buy Gram at $ 100 and you ask eToro to automatically close your position as soon as the price goes up to $ 120. It is very useful to avoid being blinded by enthusiasm: a 20% profit is usually very good, but once you see it goes up, 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 important, particularly if you use leverage, since a reduced loss with leverage can be fatal for your wallet. You always need to establish a Stop Loss lower than that suggested by the platform.
How to deposit funds on eToro
Among the payment methods that you will find on eToro are: bank transfer, PayPal, credit card, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is a very easy process. Just go to “Deposit funds”, type the amount and choose your payment method.
Remember that for security policies, you must be the owner of the credit card or the account.
The minimum amount you can deposit is $ 200 and there is a limited amount if you are not verified, so if you want to trade with larger sums, contact Support beforehand to verify your account.
Also, remember that you can make the transfer in any currency because eToro converts it to USD, but charges a commission for it, so it is preferable to make the transfer directly in USD.
About Contracts for Difference
It is possible that you have seen the initials CFD all the time if you entered eToro before. Before we come back to this, we must say that CFDs on eToro are only possible if you go short.
We will also explain terms such as going short and leverage, in case you are interested in day trading cryptocurrency or other more advanced operations.
eToro allows you not only to bet “in the black”, but through CFDs you can also bet “in red”. In a hypothetical case: you have the certitude that the Gram will fall, so probably you think that the best thing to do is refrain from getting in until it does. But if you really think that it's going down, why not making some profits out of that?
You can accomplish that by “going short”. Basically, this is how it works:
- You ask someone for a loan of, let's say, 100 units of Gram, which cost $ 5,000 at the moment (these numbers are made imaginary)
- You sell the 100 units and earn $ 5,000
- The price falls, as you guessed, and the unit of Gram goes from $ 50 to $ 30
- You get the 100 units again, but at $ 3,000
- You return the 100 units
- The difference is yours, so, you will have made $ 2000
It is far more simple than it may seem. Just remember that by trading in Gram on eToro, with CFDs you can make a profit when you anticipate downs.
Trading strategies
There are lots of cryptotrading trategies: for example, you can buy and hold, or you can day trade using volatility of the market to your advantage.
If you don't have much experience in investment, my recommendation is a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work on its own.
For instance, if you purchase a cryptocurrency when it is worth $ 15, then 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. Thus, you will obtain a fine profit.
Perhaps you are wondering: why not selling back when the price is at its highest? But unless you are a psychic, that is just impossible. The mentioned strategy can work perfectly and give good results.
Eventually, you will be ready for applying advanced investment techniques, like going short to profit from bear markets or using leverage.
How does a virtual portfolio work?
For those who still don't have much experience in investing, a demo account can be very helpful. Just assure yourself that the virtual mode is set in the top left corner of the page and you can start practicing with an “imaginary” amount.
This is a great tool for those who want to put their talents to the test before playing for real money. When you create your account, you will start with $ 100,000 of virtual balance to do your operations, not only with Gram, but you can also work with a diverse portfolio with all the different assets that are available on eToro.
The first attempt is not usually that good. But you can ask eToro to deposit back the virtual $ 100k to your portfolio, and the second try you should do better.
Keep in mind that you should always be cautious when trading, and perhaps using a demo portfolio can make you a bit impulsive. It will never be the same as risking your own money.
And of course, if you intend to invest in the medium or long-term, with profits almost guaranteed just by duplicating an index, it doesn't make sense that you invest in the virtual mode and wait for years. On the other hand, you may be interested in the virtual mode if you want to experiment with short or medium-term investments.