Why we reccomend eToro for acquiring Tezos from Philippines?
Pros:
- There are lots of investment options
- You can trade leveraged
- It is very user-friendly
- It offers other successful investment strategies so you can copy them
- You can go short
Homepage: www.etoro.com/tezos
You should absolutely consider eToro if you are interested in purchasing Tezos from Philippines.
“Social trading”, a relatively new form of investing by replicating techniques and moves from other experienced investors, has become popular because of eToro.
eToro has solutions for you, especially if you don't have much experience in trading. You can rest assured that you are making a smart investment since the site replicates those from subjects with a long profit record. On the other hand, if you are an investor and want to share your techniques with others, eToro pays you for it.
Another advantage is how intuitive the interface is, which turns out perfect for new users that are just learning all about Tezos.
About ETFs
ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a combination of stocks and mutual funds, including the best of both. They can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Exchange-Traded Funds
Have you heard about Exchange-traded funds or ETFs? They are similar to index funds and are known for combining the advantages of stocks and mutual funds: they can be exchanged regularly at market price, but have much more variety and considerably lower fees.
Index Funds
Index funds are most adequate for those who want to invest for the long term, particularly for beginners. If you don't need an amount of money for the next five or ten years, index funds offer you security and diversity.
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), not everything is as good as it sounds: when someone brags about having beaten the market, it was probably for a limited time, or their rates are really high. Also, take into account that if something happened in the past it doesn't mean necessarily that it will happen again.
Index funds offer solutions to both concerns: their fees are insignificant and they regularly beat active managers, but in the long term.
Stocks
Now let's discuss the most popular assets: stocks. Stocks are fractions of publicly traded enterprises. It is possible to get dividends with the performance of third-party companies just by investing money in them. But, obviously, you have to know where to put it.
We can classify stocks into two main types: the ones that divide their earnings regularly among the investors, and those that don't payout. The former ones are great, obviously, but investing in the latter can be a good idea too since sometimes you can make even more money by selling the shares.
If you invest in shares 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 we would recommend reinvesting in the company.
If you invest in stocks on eToro, you will be able to use leverage. But it is not advisable, since it would be a CFD and you would not get dividends. On top of that, as equities tend to be long-term investments, you will have to pay fees.
By the way, do you know what leverage is? We'll put it simply:
trading allows you to invest more money than you can have in a given time. For instance, if you have $ 100 and you use x2 leverage, you will be actually investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's assume that you are sure that the price of Tezos is going to raise its price, therefore you choose to take a long position.
You are certain that Tezos will go up, but you only have $ 1,000 available. Isn't it a shame to miss out on the opportunity to earn more money?
Possibly, you could ask your bank for a credit, put something as a guarantee, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then acquire Tezos… But maybe once you have made all that, your prediction could've been confirmed a long time ago, and Tezos would be already so high that it is not worth investing.
With leverage, you can obtain that amount with two clicks. It's just like a loan, but much better: you will get it from eToro, which lets you invest a lot more than you have on the platform. Before trading, you will how much leverage to use as in the screenshot:
Trading with other assets allows you to use higher leverage. Why? Because cryptocurrencies are usually medium-long term investments, and leverage is used mainly for short-term operations or day trading. Let's talk a bit more about how leverage works:
- If you want to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was borrowed from eToro).
- Then, turns out that Tezos does rises, as you assumed, and now the price of your investment is $ 2,400 (20% higher), so you decide to sell back because you want to play it safe.
- Once the $1,000 from leverage is deducted, you will have $ 1,400 left; which means the net profit is $ 400, since the other $1,000 was yours from the beginning.
With $ 1000 you get $ 400, in other words, 40% more. That's not bad at all, right?
But not everything is wonderful. If everything goes ok and the price rises, you will make money. However, if the price goes down, you will also lose more money than you invested.
Supposing that the price didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. That is why the concepts of Take Profit and Stop Loss are crucial when using leverage.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you purchased Tezos at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps going up, which could be a mistake.
Stop Loss is even more necessary, particularly when trading with leverage, since a small loss could have a significant impact. Consider that eToro will recommend a limit for Stop Loss, but it is better to place it lower than that.
How to deposit funds into your eToro account
Within the payment options that you will find on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. Depositing funds on eToro is so simple: click “Deposit funds”, set an amount and choose the payment method you prefer.
Remember that for security policies, you need to be the holder of the account or the credit card.
The lowest amount you can deposit 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 previously.
eToro allows deposits in any currency, but you will have to pay a fee for the conversion to USD. That is why we recommend, if possible, depositing in USD from the beginning.
eToro Interface
We said before that eToro is very friendly and intuitive. Anyone can start investing without having to read endless explanations.
If you are familiar with any of the most popular social networks today, like Twitter or Facebook, you can perfectly use this platform.
Now we will walk you through the registration process and the different sections of the page that you should know.
First of all, you will have to enter your personal data, like first name, last name, address….
Before you end up with the sign-up process, you will also have to answer some questions about your previous experience as an investor.
But you don't need to worry: it is not an exam. They only intend to know how much knowledge you have and what type of financial instruments they can recommend. For instance, if it is your first experience in the investment world, they will not recommend that you invest in futures.
Next, we will talk about the different sections of the site.
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 buy an asset that is falling but you believe it will decrease even more.
“News Feed” is the more “social” section. There, users can interact and share experiences.
In “Discover” you will find the investment tabs: “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the different financial instruments on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Currencies
- Index funds
The term “social trading” makes sense within “People”: there, you can replicate the movements of the best investors.
You can find those users that you find more interesting. You can apply filters like country, average profits, or financial instruments. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, in proportion. If you invest $ 1000 and the user puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same company or instrument, in this case, $ 200.
Finally, you will also find the CopyPortfolios divided into three main kinds: “Top Trader”, “Market” and “Partner”.
Remember that in some cases, it might be better to copy from 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 … You think that a certain sector will prosper in the future? Then you will surely find a CopyPortfolio about it.
Investment strategies
When trading cryptocurrencies, there are different possible methods or strategies, such as buying and holding or day trading, for naming just a couple.
My recommendation for those who are starting to trade is going for a middle point: when you open your position, place a stop-loss order 15-20% under the top price, and forget about the operation.
For example, if you buy a cryptocurrency when its price is $ 15, then it rises up to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will get a satisfactory income.
I know it's tempting to look to sell when the price is at its maximum, right before corrections, but that is simply not possible. The above strategy is much more realistic and it can give great results.
Later on, you will be able to apply more complex techniques, such as using leverage or going short to make money from bear markets.
Demo account: How does it work?
For those who still don't have much experience in investing, using a demo account can be very helpful. Just assure yourself that the virtual mode is set and you can start operating with “fake” funds.
A virtual portfolio can be a good way of gaining confidence before starting to trade with real money. When you create your demo account, you will begin with a virtual amount of $ 100.000, to trade with a variety of assets available on the platform, besides Tezos.
The first attempt is not usually that good. But don't worry, since you can ask support to replenish the virtual funds to your account.
Nevertheless, remember that you need to be prudent for trading, and demo account trading can have the reverse effect. It is completely different to risk your real savings than to operate with virtual funds which loss does not suppose any drama.
And of course, the demo mode is kind of pointless if you want to invest in the medium or long-term, since you would be wasting years. Demo accounts may be ideal for trying out before investing in the short or medium-term.