Contents
eToro is an excellent broker for obtaining IOTA from Philippines
Why do we recommend it?
- Allows to replicate investment strategies
- You can go short
- User-friendly and simple
- Leverage is allowed
- It is possible to invest in countless of different products
Official homepage: www.etoro.com/iota
In case you are interested in purchasing IOTA from Philippines, eToro may be the best way to do it.
“Social trading”, an innovative form of investing by replicating techniques and strategies from other experienced investors, has become trendy thanks to eToro.
eToro has solutions for you, especially if you don't have much experience in trading, since it automatizes your investment by repeating strategies from experienced traders with a long profit history. And for those skilled investors willing to share their techniques with the community, eToro pays for it.
It is also very convenient how easy is to manage this platform, excellent for beginners who are starting with IOTA.
About Contracts for Difference
You probably have found the term CFD now and then if you entered eToro before. Before we come back to this, we must say that cryptocurrency operations on eToro are only CFDs if you are short-selling or leverage over x2 (and this is not even available on the platform).
In case you are interested in day trading cryptocurrency or other advanced practices, you will also find out about terms like leverage and “going short”.
eToro lets you bet both “in the black” and “in red”. In a hypothetical case: you are sure that the IOTA will go down, so perhaps you consider that it is better to refrain from getting in until it actually falls. But if it really falls, it might mean extra money for you.
The practice known as “going short” will allow you to do that. It works, roughly, as it follows:
- Someone lends you, for example, 100 units of IOTA, with a total price of $ 5,000 (these numbers are fictional)
- You sell the 100 units and earn $ 5,000
- The IOTA devaluates from $ 50 to $ 30
- Again, you purchase the 100 units, but at the current price, $ 3,000
- Now you pay back the 100 units to the loaner
- The rest is yours, so, you will have made $ 2000
It is far more simple than it may seem. Just consider that by trading in IOTA on eToro, with CFDs you can make a profit if you foretell downs in the price.
Differences between futures and CFDs
What are the differences between CFDs and Futures?
- Counterparties
- Futures: the exchange is made with another investor.
- CFDs: the operations are not made with another individual, but the counterparty is the brokerage.
- Date of expiry:
- Futures: there is an expiry date. Once the contract expires, it is closed and can't be reopened.
- CFDs: on the contrary, they do not have an expiry date. It is possible to wait until you rise up and then exit.
- Options for trading:
- Futures: options are much more limited
- CFDs: a lot of variety, there is a wide diversity of CFDs
- Minimum investment:
- Futures: you have to invest much more
- CFDs: it is very low
- Trading costs:
- Futures: as you have to pay more in the first place, fees are lower
- CFDs: fees are higher
- Leverage:
- Futures: you can't leverage
- CFDs: totally available
BTW, do you know what leverage is? Just in case, we'll define it shortly:
trading lets you invest even more than what you really have. For instance, if you have $ 100 and you put them with x2 leverage, you will be really investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Assuming that, for example, you are positive that IOTA is going up, and that you have $ 1,000 for “going long”, you must know that you can increase your investment and earn higher profits.
There's the possibility of asking for a credit at your bank, but it is a process that takes time, and when you receive the money, IOTA might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is like a credit, and you will only have to click a few times! You will be able to invest (and earn) much more than what you have on the platform. You will simply see the different options as in the screenshot:
With other assets, the ability to leverage is greater. This is because leverage is most common in short-term operations, and cryptocurrencies tend to be a medium or long-term investment. Let's talk a bit more about how leverage works.
You enter with $ 1,000 and decide to use leverage x2, then you would really invest $ 2,000 (the extra $ 1,000 to reach $ 2,000 are “borrowed” from eToro).
A few days later, as you predicted, IOTA increases by 20% and your money has appreciated reaching $ 2,400. But you don't want to take too much risk, so it's time to sell.
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 and obtaining $ 400, your net profit would be 40%. That is quite good.
Does it sound too wonderful? The trick is that the risk of losing out is also there. If everything goes as planned, you will earn profits in little time; but if the opposite occurs, you will also lose more really fast.
Let's say that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. That is why the concepts of Take Profit and Stop Loss are crucial when operating with leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you buy IOTA at $ 100 and you ask eToro to automatically close your operation as soon as the price reaches $ 120. It is very helpful to avoid being blinded by enthusiasm: we would all accept a 20% profit when making the investment, but when you reach that 20% it is easy to want higher profits and put yourself at risk of losing money. It's like you got assured in advance that you will act prudently.
On the other hand, when operating with leverage you should always use Stop Loss, because a small decrease in the price of an asset can have a big impact on your wallet. You always need to establish a Stop Loss lower than that suggested by eToro.
About ETFs
What do you know about Exchange-traded funds? They are similar to index funds and are known for merging the advantages of stocks and mutual funds, because they can be exchanged at any moment in the market, but have much more investment possibilities and the rates are significantly lower.
Foreign exchange
Foreign exchange trading or Forex consists, as the name says, in the exchange of currencies. It's the conversion between two currencies, and the aim is, evidently, to make a profit out of this.
If you decide to exchange euros and dollars, you speculate how many dollars it will take to buy a euro, therefore you hope that after buying the first currency (the euro) it will raise its price compared to the second (the dollar), to make a profit by selling it. Suppose you entered when the price of one euro is 1.10 USD and you close when the price has gone up to 1.15: as a result, you will gain that margin.
You may be thinking by now that trading with currencies requires investing considerable amounts, and that is correct, since fluctuation in prices is never that dramatic, and often you will need to use high leverage (which sometimes can be too much of a risk). If you are a novice in trading, it is not a good idea to begin with Forex, because it is very risky and intricate.
You can exchange with the most common currency pairs on eToro but remember that this market works with contract for differences, thus you won't own the real asset.
Equities
Now let's talk about the most popular instruments: stocks or shares. Stocks are the parts in which an enterprise can be shared, and thanks to capitalism you can obtain a profit with the performance of third-party companies just by investing money in them. But of course, you have to know where to put it.
We can group stocks into two main types: the ones that payout at the end of every fiscal year to the investors, and those that don't payout. The former ones are great, of course, but investing in the latter can also be a good idea since sometimes you can make even more money by selling the shares later.
If you invest in stocks that pay out dividends, you will receive them into your account on eToro. Therefore, you can collect that money or you can choose to reinvest it. However, you can take advantage of compound interest, so our suggestion is that you reinvest if you don't need the money immediately.
Remember that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive returns as it would be a CFD. For long-term investments, it is not advisable to use leverage: you can end up losing money, since you will not receive interest and also you will have to pay fees while your operation is open.
ETFs
ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a merge between stocks and mutual funds, including the best features of both. They can be traded like regular stocks, but include a wide diversity of assets and the rates are much lower than those of an actively managed fund.
Index Funds
This is the best option for people who can invest in the long term, especially for those who are starting to trade, because it is inexpensive, diversified, and the risk is lower.
Unlike a lot of people think, benchmark returns are very difficult to beat and very few fund managers achieve that, apart from some specific cases.
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 rates 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 commissions are insignificant and in the long term they tend to beat active managers.
Trading strategies
You can trade cryptocurrencies in many different ways: from purchasing and holding to day trading using volatility of the market in your favor.
In case you don't have much experience in investment, I suggest something in the middle: placing a dynamic stop-loss (15-20% under the highest price) when you open your operation and wait for it to work.
Therefore, if for example you buy a cryptocurrency at $ 10, it reaches $ 20 and then falls to $ 12, your stop loss will take you out of the trade at $ 16-17 and you will obtain a pretty good profit.
It may sound way better to sell when the price is at its highest, but that is simply not possible. The above strategy is much more down-to-earth and it can give great results.
Later on, you will be able to apply more complex strategies, such as using leverage or going short.
How to deposit funds into your eToro account
When it comes to depositing money on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, set an amount, and choose the payment option you prefer. You can pay with PayPal (available for some countries), bank transfer, credit card, Skrill, or Neteller.
Of course, take into consideration that for security reasons, you should be the owner of the account or the credit card.
The lowest amount is $ 200, and there is a maximum allowed if you are not verified. Therefore, if you want to trade with larger sums, you should verify your account first.
You can pay in any currency and eToro will do the conversion to USD. Nevertheless, we suggest depositing directly in USD since the platform charges a commission.
Can you rely on eToro?
eToro has been independently tested many times to prove its reliability in reporting performance statistics from previous users. And it has been confirmed every time that eToro is meticulous with the figures.
The main office of eToro is located in Cyprus, and the platform is certified by the Cyprus Securities Market Commission (or CySEC), which can cover up to € 20,000 from its client's debts. Furthermore, eToro follows all the strict requirements of the European Union.
It is also 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, it should be mentioned that eToro has more than 20 million users worldwide, and it has been operating for the last fifteen years. To sum up, we can be confident that our finances are safe.
No less important is their excellent customer service. You can reach them by phone or use their online chat.
Practice account
Are you taking your first steps as an investor? Using 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.
A virtual portfolio can be a good way of practicing before starting to operate with real money. When you open your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of assets available on eToro (not just with IOTA).
Don't worry, since if you lose all your virtual funds, you can contact support so they can add back the $ 100k to your portfolio and you can try again.
Nevertheless, keep in mind that you need to be prudent for trading, and demo account trading can have the opposite effect. It is not the same to risk your own money than to do operations with virtual funds that you don't mind losing.
Evidently, 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. On the other hand, it can be very useful if you want to practice short and medium-term trading.
eToro Interface
We mentioned before that eToro is very easy to manage. Anyone can start using it without having to read endless explanations.
Everyone who has used Twitter, Linkedin or any of the most common social networks, has enough skills to use eToro.
We will explain, roughly, the registration process and the different tabs that you will see on the page.
First of all, you will have to enter all the information that eToro asks for: first and last name, address…
To complete your profile, you will have to answer some questions about your experience at investing.
However, it's not like they're testing you or anything. It is only a way of finding out how much knowledge you have and what type of assets they can recommend. For instance, if it is your first experience in the investment world, they will not suggest that you invest in futures.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Next, we will talk about the different sections of the interface.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. This is helpful in case you want to purchase an asset and you are waiting for it to decrease.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we already talked about the different financial instruments on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Currencies
- Index funds
The concept “social trading” makes sense in the section “People”: that is where you can duplicate the movements of any investor you choose. You'll be able to see all their profiles and performances.
You can search for those users that best suit your interests: by risk level, types of financial assets, average earnings… Just indicate the amount you want to invest and eToro will replicate the movements of the selected investor, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, eToro will invest also 10% of your funds (that is, $ 100) in that same asset.
In this section you will also see the three most popular types of CopyPortfolios, which are Top Trader, Market, and Partner.
The advantage of copying to CopyPortfolios instead of individuals 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, if you think a specific sector, such as biotechnology or pharmacy, will prosper in the future, you should probably look for that specific portfolio.