Contents
eToro, a reliable broker for purchasing Binance Coin from Thailand
Why do we recommend it?
- It is possible to invest in countless of different products
- eToro allows leverage
- It is uncomplicated and easy to use
- Allows to imitate investment tactics
- Allows short-trading
Official main site: www.etoro.com/binance-coin
You should absolutely consider eToro if you are thinking about buying Binance Coin from Thailand.
This broker is known for making “social trading” a trend. Social trading is a revolutionary form of investing in which traders can repeat the moves of other investors who have been generating income over time.
If you are still a rookie or haven't gained much experience in investments, eToro is very useful. You can rest assured that you are making a smart investment since the site replicates those from subjects with a long profit record. Oppositely, if you are an investor and want to share your methods with others, eToro pays you for it.
It is also worth mentioning how accessible is this platform, perfect for new traders who are taking their first steps in the investment world.
How to use eToro
As we have mentioned previously, one of the best features of eToro is its simplicity: anyone can invest without having to read endless explanatory texts.
You won't have any issues with the interface if you have used any other social network, like Twitter or Pinterest.
Now we will walk you through the registration process and the sections of the page that you should familiarize yourself with.
You will have to provide some personal data (like full name or address, for instance) when registering.
They will also ask you about your previous trading activities.
But don't feel like you are taking an exam. The only intention is to know more about you and be clear about which financial instruments they should recommend according to your knowledge and experience.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Let's get to know the fundamental sections of the site.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. Just click the tab and you will be able to set it. This is ideal if you want to buy an asset and you are waiting for it to decrease.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets that are available on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Commodities
- Forex
- Index funds
The term “social trading” comes to life in the section “People”: that is where you can replicate the movements of any user you choose with just one click. You'll be able to see all their profiles and performances.
Through the search engine, you can find the users that best suit your interests: by average earnings, types of instruments or risk level, for example. Just indicate the amount of your investment and eToro will replicate the movements made by the selected investor, in proportion. This means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your money in that asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
The benefit of copying to CopyPortfolios instead of individual traders 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, like biotechnology or drones, has good chances to succeed, you should look for that specific portfolio.
Is eToro reliable for purchasing Binance Coin?
eToro is very meticulous with the information about past performances from traders, and its reliability has been tested several times times by independent organizations.
The main headquarters of eToro is in Cyprus, and therefore the broker is approved by the CySEC or Cyprus Securities Market Commission, which can cover up to € 20,000 from its client's debts, including those from Thailand. The platform complies, on the other hand, with all the strict policies of the European Union.
In Europe, it is backed by the European Financial Instruments Market or MiFID, and in the USA it is under the control of the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has more than 20 million users worldwide, and it has been operating for fifteen years. To sum up, we can be confident that our finances are safe.
Their excellent customer service is also worth mentioning. You can use the online chat, and they also have a phone number available for assistance.
In case you still don't know what “leverage” is, we'll put it short. When trading, it's the capacity of increasing your investment by borrowing money from the broker. That way, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
What you need to know about leverage
Let's say that you have complete certainty that Binance Coin will raise its price, and you want to “go long”. You have $ 1,000, but you actually can invest more and make more money.
Perhaps you could go to your bank, request a credit, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then purchase Binance Coin… Nevertheless, when you finish doing all that, probably Binance Coin would be already at a much higher price, and investing wouldn't be a good idea anymore.
Leverage is like a loan, and you will only have to click a few times to get it! eToro allows you to operate with much higher amounts than what you actually have on the platform's wallet. Before trading, you will how much leverage to use as in the screenshot:
With other assets, the leverage you can choose is higher. Why? Because leverage is most common in short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. But let's deepen a bit more on how all this works.
You start with $ 1,000 and decide to use leverage x2, then you would really invest $ 2,000, since eToro would put the other $ 1,000.
A week after that, turns out that Binance Coin rises up by 20% and now your investment costs 2,400. But you don't want to be too greedy, so you decide, wisely, to sell back.
You need to pay back the $ 1,000. You have $ 1,400 left, of which $ 1000 is the money you put in yourself, so you'll have earned $ 400.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
It may sound too good to be true. The trick is that the risk of losing out also increases. If everything goes as planned, you will earn more money in less time; however, if the value of the asset decreases, you will also lose more in less time.
For example: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but $ 20. That is why to operate with leverage it is essential to be familiar with two other concepts: Take Profit and Stop Loss.
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 bought Binance Coin at $ 100, you program eToro to close your operation when it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps rising, which could be a mistake.
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). Take into account that eToro will recommend a limit for Stop Loss, but you should place it lower than that.
How to deposit funds into your eToro account
Within the payment methods that eToro accepts you will find: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is a very easy process. You just need to click “Deposit funds”, type the amount and select your payment method.
Of course, take into consideration that for security reasons, you need to be the account or credit card holder.
You can start with a $ 200 deposit, and there is a limited maximum for unverified accounts. Thus, if your intention is to deposit larger sums, you should contact Support to verify your account first.
Additionally, remember that you can make the deposit in any currency you want since eToro will make the conversion to USD, although it charges a fee, so it is better to make the transfer directly in USD.
About ETFs
Have you heard about Exchange-traded funds? They are similar to index funds and are known for combining the advantages of stocks and mutual funds, because they can be traded at any moment in the market, but have much more investment possibilities and the rates are significantly lower.
Stocks
The most well-known financial assets are stocks: these are portions of publicly traded enterprises. It is possible to get dividends through third-party companies just by putting your money in them. But of course, you have to know how to invest.
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 other hand, do not. Does that mean that you should only consider the former? No, of course not: if a company does not pay every year but has a lot of potential, you should not discard that alternative, since selling the shares in the future could pay a lot more.
On eToro, if you invest in equities that give dividends, you will receive them in your account, and you can withdraw those funds or reinvest them. We recommend, if you don't need the money right away, that you benefit from compound interest and reinvest it 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 receive dividends. Besides, shares are usually long-term investments, and you have to pay commissions.
ETFs
Exchange-Traded Funds or ETFs are a kind of passively managed fund, similar to index funds. We can say that ETFs are somewhere between stocks and funds: they are traded in the market like stocks, during the day. Their main benefit is that they offer more alternatives compared to stocks, and have lower fees.
About Index Funds
This is the best option for people who can invest in the long term, especially for beginners, because it is inexpensive, diversified, and the risk is lower.
Contrary to what it may seem, very few fund managers can beat the benchmark (although you have probably heard of managers who obtain huge returns).
But besides Warren Buffett and a couple more, all that glitters is not gold: if you hear of someone who has beaten the index, it was probably for a limited time, or their rates are really high. In the end, indexing is better because commissions are minimal. Also, if something happened in the past it doesn't necessarily represent a regular behavior.
Index funds provide solutions to both concerns: their commissions are minor and they frequently beat active managers, but in the long term.
Differences between futures and CFDs
How are Futures and CFDs different?
- Counterparties
- Futures: operations are made with another investor or trader.
- CFDs: the counterparty is the brokerage platform (eToro). That means you don't “play” with someone else but with the bank.
- Expiry:
- Futures: there is a date of expiry. Once the contract expires, it is closed even if you have losses.
- CFDs: there is no expiration date. It is possible to wait until you are in a good shape to close.
- Options for trading:
- Futures: there are fewer options
- CFDs: they include lots of different assets, commodities and currencies
- Minimum deposit amount or “trade size”:
- Futures: you have to invest much more
- CFDs: you can start with a low amount
- Trading costs:
- Futures: costs are usually lower
- CFDs: fees are higher
- Use of leverage:
- Futures: it isn't possible to leverage
- CFDs: fully available
How do Contracts for Difference Function?
If you have entered eToro before, you must have seen how the initials CFD appear frequently. We will explain exactly what this means, but you should know first that cryptocurrency trading on eToro is only CFD when you short sell or select leverage higher than x2 (and this is not even an option on the platform).
For the record, and if you are thinking about day trading cryptocurrency or other operations, below you will also meet concepts such as going short and leverage.
With CFDs you can bet on eToro even if you are “in red” or don't have a positive balance. In a hypothetical case: you are sure that the Binance Coin will go down, so probably you consider that it is better to wait until it does and then go in. But if you are convinced that it is going down, why not take advantage of that?
The operation known as “going short” will allow you to do that. It functions, pretty much, this way:
- They lend you, for example, 100 units of Binance Coin, with a total price of $ 5,000 (these numbers are fictional)
- You sell them at their price at the moment, $ 5,000
- As you supposed, it devaluates, and the unit of Binance Coin goes from $ 50 to $ 30
- Again, you purchase the 100 units, but at the current value, $ 3,000
- You give back the 100 units
- The difference is yours, so, you will have made $ 2000
It is really simple. Just remember that by trading in Binance Coin on eToro, you can make a profit if you foretell downs in the price.
Demo account
If you are taking your first steps as an investor, the option to operate in “demo” mode will be helpful. Setting a virtual account and trading with fictional money is very simple.
A virtual account can help you to practice and gain experience before starting to trade with real money. When you open your demo account, you will begin with a virtual amount of $ 100.000, to operate with a variety of financial instruments available on the platform, besides Binance Coin.
If your trials don't go well and your balance ends at zero, there is always a possibility to replenish your virtual funds. Possibly the second time will be much better.
Keep in mind that trading is mainly about being cold-minded, and perhaps a virtual account can make you a bit impulsive. It will never be the same as risking your own money.
Evidently, the virtual mode is kind of pointless if you want to trade in the medium or long-term (which almost assures you a profit only by replicating an index), since you would be wasting years to see the results. Demo accounts may be ideal for trying out before investing in the short or medium-term.