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eToro, recommended online brokerage for those who are in Philippines and want to obtain Tether
Why do we recommend it?
- You can copy investment tactics
- Allows you to go short
- Really user-friendly and simple
- You can leverage
- There are lots of investment possibilities
Homepage: www.etoro.com/tether
If you are considering buying Tether from Philippines, eToro may be the best way to do it.
This platform is popular for making “social trading” fashionable. Social trading is a revolutionary way of investing in which investors can replicate the techniques of other traders who have been generating earnings for years.
If you are still a rookie or haven't gained much experience in investments, eToro is very helpful. You can rest assured that you will be making a smart investment since the site duplicates those from subjects with a long profit record. Oppositely, if you are an investor and decide to share your abilities with others, eToro rewards you with money.
Another advantage is how easy the interface is, which turns out perfect for new users that are just learning all about Tether.
About ETFs
Have you heard about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the benefits of stocks and mutual funds, because they can be exchanged regularly at market price, but include a much wider diversity of assets and the rates are significantly lower.
By the way, do you know what leverage is? We'll put it simply:
another good thing about trading is that it lets you invest higher figures than you can have in a given time. That is, if you have $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.
About leverage, Take Profit and Stop Loss
Let's assume that you are sure that Tether is going to rise, therefore you decide “going long”.
You are certain that Tether will rise, and you have $ 1,000 at that moment, but the fact is, you have the chance of investing more.
You could go to your bank, request a credit, put an asset as collateral, wait for it to be accepted, wait for the money, and then acquire Tether… However, when you finish doing all that, probably Tether would be already at a much higher price (if your prediction got confirmed), and investing wouldn't be a good idea anymore.
Using leverage, you can get that amount really easily. It's like borrowing money, but much better: from eToro itself. You will be able to invest much more money than you actually have on the eToro Wallet. You will simply see the different options as in the screenshot:
Trading with other assets allows you to use higher leverage. Why? Because cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used especially for short-term operations or day trading. Let's talk a bit more about how leverage works.
If you have the $ 1,000 and use leverage x2, your investment is 2 * $ 1,000, that is to say, $ 2,000. eToro would be “loaning” you the extra $ 1,000.
A few days later, as you predicted, Tether raises its price by 20% and the value of your investment is now $ 2,400. Ok, don't be greedy, it's time to sell.
You will have to pay back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
With $ 1000 you get $ 400, in other words, 40% more. Not bad, right?
But watch out: if everything goes ok and the asset increases, you will make profits. Nevertheless, if the price falls, you will also lose more money in the blink of an eye.
Let's say that the price didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but double, $ 40. That is why to operate with leverage it is fundamental to take into account Take Profit and Stop Loss.
Take Profit is the automatic order to sell once the asset is above the entry price: you purchase Tether at $ 100 and you ask eToro to close your position as soon as the price goes up to $ 120. It is very useful 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 won't be irresponsible.
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 place it lower than the platform suggests.
Can you trust eToro?
eToro is very careful with the data about past performances from users, and its reliability has been tested several times times by independent organizations.
In the legal aspect, eToro fulfills all the strict policies required by the European Union, legislation in which it is found. Specifically, its main headquarters is in Cyprus, where it is approved by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 of the debts from its clients (those from Philippines included).
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 certain that our finances are safe.
Their excellent customer service is also worth mentioning. They have a phone number for assistance, a ticket system to track any claim, and a live chat.
How to deposit funds into your eToro account
When it comes to payment on eToro, there is not much to say, since it is really straightforward. You just have to click “Deposit funds”, put an amount, and choose the payment option you prefer. You can use PayPal (available for some countries), bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Consider that for security reasons, you must be the holder of the account or the credit card.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. Thus, if your intention is to deposit larger sums, you should contact Support to verify your account.
eToro allows deposits in any currency, but charges a commission for making the conversion to USD. That is why we recommend, if it is in your hands, depositing in USD directly.
Differences between futures and CFDs
Here are the most important differences between Futures and CFDs, in case you want to know more:
- Counterparties
- Futures: the exchange is made with another investor or trader.
- CFDs: you do not “play” with another individual, the counterparty is the brokerage.
- Expiry:
- Futures: they expire on a given date. As soon as that date arrives, the contract is closed even if you are in losses.
- CFDs: they don't expire. It is possible to get back to a good position before you close.
- Trading options:
- Futures: options are much more limited
- CFDs: a lot of variety, there are CFDs of practically anything
- Minimum deposit:
- Futures: you have to invest much more
- CFDs: very low
- Pricing and charges:
- Futures: being higher figures, the costs are usually proportionally lower
- CFDs: higher (although they are not excessively high either)
- Leverage:
- Futures: there is no leverage leverage
- CFDs: completely available
About Contracts for Difference
If you have entered eToro previously, you probably noticed that the initials CFD appear repeatedly. Before we explain what this is, we must say that cryptocurrency operations on eToro are only CFDs when you go short or use leverage above x2 (although this is not even an option on eToro).
We will also refer to terms such as leverage and “going short”, in case you are considering day trading cryptocurrency or more advanced practices.
With CFDs you can operate on the platform even if you are “in red” or don't have a positive balance. For example: you have the conviction that the Tether will go down, so you clearly think “if it is going to depreciate, I'll just wait and go when it has gone down”. But if it really goes down, it is possible to make some profits out of that.
You can do that by “going short”. Here's how it works ,roughly:
- You ask someone to lend you, for instance, 100 units of Tether, which total price at the moment is $ 5,000 (these numbers are made up)
- You sell the 100 units at $ 5,000
- The price falls, as you thought, and the unit of Tether now costs $ 30 instead of $ 50
- Again, you buy the 100 units, but now they are worth $ 3,000
- Now you return the 100 units
- The rest is yours, so, you will have made $ 2000
Keep in mind that it sounds much more complex than how eToro CFDs actually work: we can just say that by trading in Tether you can also earn money if you foretell the downs.
eToro Interface
We said before that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.
You won't have any problems with the interface if you are familiar with any of the most common social networks.
We will explain, roughly, the registration process and the different tabs that you will find.
You will have to fill in some requested data when registering.
They will also ask you about your previous trade experience.
But don't feel intimidated. They only intend to find out how much you know and which assets to recommend for you.
As soon as you are registered and have completed your profile, the annoying “incomplete profile” bar will disappear.
Let's get to know 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 ideal if 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.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the different financial instruments on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Forex
- Index funds
In “People”, you can find the profiles of eToro users and their performances. This is where you can copy with just one click the strategies of your preferred traders.
Using the search box, you can find the users that best suit your interests: by average earnings, types of assets or risk level, for example. Just indicate the amount you want to invest and eToro itself will replicate the movements made by the investor you selected, in proportion. “In proportion” means that if you have $ 1000 and the trader puts 10% of his or her balance in an asset, the platform will invest also 10% of your funds (in this case $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The benefit of using CopyPortfolios instead of copying individuals is that this way you will diversify the risk. There are all kinds of portfolios that you can identify easily and are divided by sectors. Thus, in case you suspect a specific industry, like biotechnology or drones, will prosper in the future, you can find that specific portfolio and invest in it.
Investment strategies
There are different methods or ways for crypto trading, like day trading or buying and holding, for naming just a few.
If you don't have much experience in investment, I suggest 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 buy a cryptocurrency when it is worth $ 15, then it increases to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will get a satisfactory income.
You may be wondering: why not selling when the price is at its highest? But unless you are a psychic, that is just not possible. The mentioned strategy can work perfectly and is much more realistic.
And when you have more experience, you will be ready for more advanced investment strategies, like using leverage or going short to make money from bear markets.
Virtual portfolio: How does it 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 “fake” funds.
A virtual portfolio can help you to practice and gain experience before starting to trade with real funds. When you open your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of financial instruments available on the platform (not just with Tether).
If your trials don't go as planned and you lose your funds, there is always a possibility to replenish your virtual balance. The second try will always be better.
Nevertheless, keep in mind that investing is mostly about being cold-minded, and using a practice account can have an adverse effect. It is completely different to risk your real savings than to operate with virtual funds that you don't mind losing. 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 assured only by replicating a strategy, it is absurd that you invest in the virtual mode and wait for years. On the contrary, you may be interested in the virtual mode if you want to experiment with short or medium-term operations.