Contents
Why we reccomend eToro for investing in Monero in Philippines?
Why do we recommend it?
- You can replicate investment tactics
- Admits short-selling
- It's straightforward and manageable
- You can trade leveraged
- Lets you invest in plenty of different products
Homepage: www.etoro.com/monero
You should certainly consider eToro if you are interested in buying Monero from Philippines.
This platform is well-known for making “social trading” a trend. Social trading is an innovative form of investing in which investors can imitate the movements of other traders who have been generating income for years.
eToro has solutions for you, especially if you are still a novice user in trading. You can rest assured that you will be doing a smart investment move when replicating those from subjects with a long profit record. And for those skilled investors willing to share their techniques with others, eToro pays for it.
Besides, the platform is so uncomplicated, ideal for those who want to begin in the Monero world, without getting crazy with tons of diagrams and figures.
Is eToro safe for purchasing Monero?
eToro is very rigorous with the data about past performances from traders, and its integrity has been independently tested several times.
The main office of eToro is located in Cyprus, and therefore the broker is certified by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 from its client's debts. On the other hand, eToro meets all the strict requirements of the European Union.
It is also backed by the European Financial Instruments Market (MiFID), and in the USA it responds to the Financial Conduct Authority (FCA). Besides all these regulations, 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.
It is also worth mentioning the great customer service. They have a phone number for assistance, a ticket system, and a live chat.
How to deposit funds into your eToro account
When it comes to payment on eToro, there isn't really much to say, since it is pretty simple. You just have to click “Deposit funds”, type an amount, and choose the payment option you prefer. You can pay with PayPal, bank transfer, credit card, Skrill, or Neteller.
Evidently, for security policies, you need to be the account or credit card holder.
The lowest amount you can deposit is $ 200, and there is a maximum allowed for unverified accounts, so if you plan to operate with larger sums, contact Support beforehand to verify your account.
Finally, know 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.
If you still don't know what “leverage” is, we'll describe it briefly: it is, simply, the ability to use a higher amount than you actually have. For example, if you start with $ 100 and you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Suppose now that you are sure that the price of Monero is about to raise its price, thus you decide “going long”.
You are positive that Monero will rise, and you just have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
There's the possibility of requesting a credit at your bank, but you must know that all the process takes time, and by the moment you receive the money, Monero might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is just like a loan, but it is only a few clicks away! eToro allows you to invest (and earn) much higher amounts than what you actually have on the platform. Before trading, you will be able to choose between the different options as in the screenshot:
Trading with other assets allows you to use higher leverage. This is because leverage is most common in 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 you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was borrowed from eToro).
- A few days later, Monero does increases, as you thought, and now the cost of your investment is $ 2,400 (20% more), so you decide to sell back.
- Once the $ 1k from leverage is returned, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours from the beginning.
As you can see, with $ 1000 you get a profit of $ 400, no less than a profit of 40%. Not bad, right?
But there's always a downside. If all goes as you planned and the asset increases, you will make money. On the opposite scenario, if the asset decreases, you will also lose more money than you invested.
For instance: if the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. Therefore, when using leverage it is very important to know about Take Profit and Stop Loss.
Take Profit is a trading limit you can set for your assets: you program your operation and ask the platform to sell them once they get to a point above the entry price. For instance, you can buy Monero at $ 100 and ask eToro to close your position automatically when it goes up to $ 120. It is very helpful to avoid being blinded by greed: 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 to trade more safely.
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). Consider that eToro will recommend a limit for Stop Loss, but it is better to set it lower than that.
About ETFs
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the advantages of stocks and mutual funds: they can be exchanged regularly at market price, but offer much more diversity and the fees are significantly lower.
Stocks
Stocks are the most popular securities. Some corporations decide to split into portions and have several shareholders. By investing money in them, you can own a fraction of a company and obtain returns.
We can categorize stocks into two different kinds: those that pay dividends and those that do not. Those that pay, at the end of the fiscal year, distribute profits among the stockholders; the latter, on the contrary, do not. But this is not to say that those of the second type have less to offer. If a company does not pay every year but has a lot of potential, it is also worth investing in it, since the capital gain you will get from the sale of the shares can be much greater than what you would earn through dividends.
In the case of eToro, if you choose a company that pay out dividends, you will receive them in your account, and you can withdraw your money or reinvest it. We suggest, if you don't need the money immediately, that you benefit from compound interest and reinvest it in the company.
Take into account that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive dividends as it would be a CFD. For long-term investments, it is better not to use leverage: not only because you lose dividends, but you will also have to pay commissions during the days that the operation is open, and these can end up with your profit.
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 traded at any moment in the market, but include a much wider diversity of assets and considerably lower rates.
Index Funds
This is the best option for people who can invest in the long term, especially for beginners, because it is less expensive, diversified, and safer.
Contrary to what it may seem, it is very hard to beat the market (yes, you have probably heard of investors who obtain huge profits).
But putting aside some unusual cases (like Warren Buffett's), all that glitters is not gold: if you hear of someone who has beaten the benchmark, it was probably for a limited time, or their charges are really high. Also, take into account that past performances do not ensure a future one.
Index funds offer solutions to both concerns: their fees are minor and they often beat active managers, but in the long term.
Commodity market
Most investors trade with raw materials because of their stability. While other assets present higher fluctuation, raw materials prices vary less and offer safety against inflation or market volatility. However, prices do depend on supply and demand in the market, so if the fear of possible inflation produces higher demand for a certain good, the price will also increase.
Note that the only intended profit from the investment in raw materials will come from their further sale because, unlike stocks, commodities don't pay dividends.
Raw materials are generally categorized into hard raw materials, which include precious metals, industrial metals, and oil; and soft raw materials, which are agricultural products, like soy, cocoa, corn, or rice, for instance.
About Contracts for Difference
You probably have found the initials CFD all the time if you entered eToro before. Before we come back to this, you must know that cryptocurrency trading on eToro is only CFD if you are short-selling or use leverage over x2 (although the platform does not even allow this).
FYI, and if you want to know about day trading cryptocurrency and other more advanced operations, later on you will also find out about concepts like short-selling and leverage.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. Let's say that you have the certitude that the Monero will fall, so you clearly think “if it is going to depreciate or go down, I simply wait and I'll go in when it has gone down”. Nevertheless, if you are convinced that it is going down, why not making some profits?
The operation known as “going short” will allow you to do that. It functions, more or less, like this:
- You ask for a loan of, let's say, 100 units of Monero, which total price at the moment is $ 5,000 (these figures aren't real)
- You make $ 5,000 by selling the 100 units
- The price falls, as you thought, and the unit of Monero goes from $ 50 to $ 30
- You buy the 100 units again, but at their current price, $ 3,000
- Now you return the 100 units
- The difference is yours, so, you will have earned $ 2000
It all seems more tricky than it really is. Just take into account that by trading in Monero on eToro, you can earn money if you anticipate downs in the price.
How to use eToro
We said before that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
If you are familiar with any of the most common social networks, such as Twitter or Linkedin, you can perfectly use this platform.
Now we are going to walk you through the sign-up process and the sections of the page that you should familiarize yourself with.
When you register, you will have to enter all the information that eToro asks for: first and last name, address…
They will also ask you about your previous experience as an investor.
But don't feel intimidated. The only intention is to know more about you and determine which financial instruments they should suggest according to your knowledge and experience.
When you fill in all your information in your profile, the “incomplete profile” bar will disappear.
Let's review the different functions of the interface.
“Set Price Alerts” allows you to put alarms on the price of certain assets. 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. This is very useful when you are after a security that is falling, but perhaps you think that it will decrease even more.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the different financial instruments that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Raw materials
- Currencies
- Index funds
In the section “People” are all the profiles and historical performances of other investors, and you can replicate their strategies with just one click. This is where the “social trading” concept is best applied.
You can search for those users that you find more interesting. When you select an investor and indicate how much you want to invest, eToro will automatically replicate their movements, proportionally. For instance, 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.
You will also see the three main types of CopyPortfolios, which are “Top Trader”, “Market” and “Partner”.
Sometimes you might prefer copying to CopyPortfolios than to individuals, since the former offer more diversity. The portfolios are identified so you can recognize them easily: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper in the future? Then you will surely find a CopyPortfolio about it.
Trading strategies
There are different methods or ways for crypto trading, such as day trading or buying and holding, for naming just a couple.
In case you don't have much experience trading, I recommend something in the middle: when you open your position, set a dynamic stop loss 15-20% under the top price, and let the rest happen on its own.
For example, if you purchase a cryptocurrency when its price is $ 15, then it increases to $ 25 and falls back to $17, the stop-loss will allow your operation to be closed, maybe at $ 21 or $ 22. Therefore, you will get a satisfactory income.
Perhaps you are wondering: why not selling when the price is at its peak? But that would only work for a psychic or a fortune-teller. The mentioned strategy is more down-to-earth and can work out perfectly if it is well applied.
At some point, you can take your first steps with advanced trading techniques, such as short-selling or using leverage.
How does a demo account work?
For those who still don't have much experience in investing, a demo account can be very helpful. You just need to set the virtual mode and you can start trading with fictional funds.
This can be a great way of practicing before trading with real funds. You will have an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you will be able to operate with all the different instruments available on eToro, not only with Monero.
The first attempt is not usually that good. But don't worry, because you can ask support to replenish the virtual funds to your portfolio.
But keep in mind that you need to be prudent for trading, and using a practice account can have an adverse effect. It is not the same to risk your real savings than to do operations with a false balance which loss does not suppose any drama. Also, using fake money can prevent you from learning to control your emotions, as a true investor should.
Evidently, if you are going to invest in the medium or long-term, with earnings almost guaranteed just by duplicating a strategy, it doesn't make sense that you invest in the virtual mode and wait for years. On the other hand, the virtual mode can be helpful to experiment with short and medium-term trading.