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Why we reccomend eToro for investing in Bitcoin Cash in Thailand?
Why do we recommend it?
- There are uncountable goods you can invest in
- You can trade leveraged
- It's really straightforward and manageable
- You are able to copy investment tactics
- Accepts short-selling
Official page in English: www.etoro.com/bitcoin-cash
In case you are thinking about investing in Bitcoin Cash from Thailand, eToro is certainly the best option.
This platform is well-known for making “social trading” fashionable, an innovative form of investing in which users can replicate the techniques of other traders who have been generating income over time.
If you are still a newbie 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 great deal of expertise. On the other hand, if you are an investor and decide to share your techniques with others, eToro rewards you with money.
It is also worth mentioning how accessible is the platform, perfect for new traders who are taking their first steps with Bitcoin Cash.
About 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. However, their advantage is that they offer more alternatives compared to stocks, and have lower fees.
Forex trading
What is known as Forex trading consists in the exchange of currencies. It's the conversion of one currency to another, and the aim is, evidently, to obtain a benefit out of this.
If you decide to exchange euros and dollars, for instance, you purchase euros at their price in dollars, with the expectation that the euro will raise its price compared to the dollar. Then, if you bought each euro for 1.15 USD and you sell them back when their price is 1.20 USD, you'll be earning that difference.
You may be thinking by now that trading with currencies requires high investments, and that is correct, since fluctuations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. In case you are just starting to trade, it is not a good idea to begin with Forex, because it's not the safest alternative.
You can trade with almost every popular currency on eToro. Nevertheless, take into account that in Forex sales are always made through contract for differences, therefore you will not be the owner of the real asset.
Stocks
Stocks or shares are the most common financial assets. Some corporations decide to split into portions: you can be one of those shareholders, but first, you should know where and how to make your investment.
We can categorize 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 be a good idea too since the profit you can make by selling the shares can be even larger.
When trading on 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 don't renounce the magic of compound interest and reinvest it in the company.
If you trade with stocks on eToro, you can use leverage to “dope” your trades. However, it is not advisable, since it would be a CFD and you would not receive dividends. Besides, shares are regularly long-term investments, and you have to pay commissions.
About ETFs
Have you heard about Exchange-traded funds or ETFs? They are passively managed funds, known for merging the benefits of stocks and mutual funds, because they can be traded at any moment in the market, but have much more investment possibilities and considerably lower fees.
About Index Funds
Index funds are the best option for those interested in long-term investments, mostly for beginners. If you don't need to withdraw your money in less than five or ten years, index funds offer you security and diversity.
Contrary to common perception, very few fund managers can beat their benchmark return (yes, you have surely heard of investors who achieve huge returns).
But putting aside some exceptional cases, not everything is as good as it sounds: when someone brags about having beaten the benchmark, it was probably for a limited time, or their charges are really high. In the end, indexing is better because commissions are minimal. Also, take into account that if something happened in the past it doesn't mean necessarily that it will happen again in the future.
Index funds offer solutions to both concerns: their rates are insignificant and in the long term they almost always beat active managers.
Can you trust eToro?
Many tests from independent consultants have been applied to the platform to verify its reliability in the handling of data from previous users. Every time, results have shown that eToro is rigorous with the information.
The main office of eToro is in Cyprus, and therefore it is certified by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 from its client's debts, including those from Thailand. On the other hand, eToro meets all the strict requirements of the European Union.
It is also supported 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 fifteen years. In short, we can be certain that our money is in safe hands.
Their customer service functions perfectly. You can use the online chat, and they also have a phone number available for assistance.
What are Contracts for Difference?
If you have entered eToro previously, you probably noticed that the acronym CFD appears frequently. We will come back to it, but first, you should know that cryptocurrency operations on eToro are only CFDs if you go short.
FYI, and in case you are considering day trading cryptocurrency or other operations, you will also find concepts such as short-selling and leverage.
eToro allows you to bet both “in the black” and “in negative”. Let's say that you are sure that the Bitcoin Cash will go down, so you obviously think “if it is going to depreciate or go down in price, I simply wait and I'll go in when it has gone down”. However, if you are pretty sure that it is going down, why not take advantage of that and earn money?
You can do that by “going short”. Here's how it works:
- Someone lends you, let's say, 100 units of Bitcoin Cash, which cost $ 5,000 (these are completely fictional figures)
- You make $ 5,000 by selling the 100 units
- The price is reduced, as you guessed, and the unit of Bitcoin Cash now costs $ 30 instead of $ 50
- You obtain the 100 units again, but at their current price, $ 3,000
- Then you pay back the 100 units
- The rest is yours, so, you will have earned $ 2000
Consider that it sounds much more tricky than how eToro CFDs actually work: we can just say that by trading in Bitcoin Cash you can also make money if you anticipate the downs.
How to use eToro
As we have mentioned previously, one of the best features of eToro is its extraordinary simplicity: anyone can invest without having to read endless explanations.
If you are familiar with any of the most popular social networks today, such as Whatsapp or Pinterest, you can perfectly use eToro's interface.
We will explain, roughly, the registration process and the different sections that you will find on the page.
When you register, you will have to fill in your personal data, like first name, last name, address….
They will also ask you about your previous experience as an investor.
But you don't need to worry: it's not about passing an exam. They only intend to know how much knowledge you have and what type of assets they can suggest. For instance, if you have never invested before, they will not recommend that you invest in futures.
Let's get to know the fundamental sections of the site.
With the “Set Price Alerts” tool, you'll be able to program an alert when an asset is at a certain price. Just click the tab and you will be able to set it. This is perfect if you want to purchase an asset and you are waiting for it to decrease.
“News Feed” is the more “social” section. There, users can interact and share their knowledge.
In “Discover” you will find the investment tabs: “Instruments”, “People” and “CopyPortfolios”. As we discussed previously, the six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Stocks
- Raw materials
- Currencies
- Index funds
In the tab “People”, you can find eToro users and their performances. This is where “social trading” makes sense since you can duplicate with just one click the movements of the traders that you prefer.
In this section, you will be able to 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, proportionally. For instance, if you have $ 1000 and the user 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.
Finally, you will also see the CopyPortfolios divided into three main kinds: “Top Trader”, “Market” and “Partner”.
Sometimes you might prefer copying to CopyPortfolios than to other traders, since you avoid putting all your eggs in one basket. 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 industry is going to succeed in the future? Then you will surely find a CopyPortfolio about it.
Investment strategies
You can trade cryptocurrencies in many different ways: for example, you can buy and hold, or you can day trade using volatility of the market to your advantage.
In case you are new in the world of trading, I suggest a middle point: when you open your Bitcoin Cash position, place a stop-loss order 15-20% under the top price, and let the magic happen.
For instance, if you buy a cryptocurrency when it is worth $ 15, it rises up to $ 25 and decreases back to $17, the stop-loss will allow your operation to be closed, perhaps at $ 21 or $ 22. Therefore, you will get a satisfactory income.
I know it might sound more appealing to sell when the price is at its peak, right before corrections, but that is simply not possible. The mentioned strategy is much more realistic and it can give great results.
Later on, you will be able to apply more complex strategies, like short-selling or using leverage.
Virtual portfolio: How does it work?
For those who still don't have much experience in investing, using a demo account can be very helpful. Just make sure the virtual mode is set in the top left corner of the page and you can start trading with “fake” funds.
A virtual portfolio can help you to practice and gain experience before starting to operate 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 financial instruments available on the platform, besides Bitcoin Cash.
Don't worry, since if you lose all your virtual funds, you can contact support so they can add them back to your portfolio and you can make a second attempt.
But remember that you need to be prudent for trading, and demo account trading can have an adverse effect. It is not the same to risk your own money than to do operations with a fake balance 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, the demo mode is kind of absurd if you intend to trade in the medium or long-term, since you would be wasting years to see the outcome. Demo accounts may be ideal for trying out before investing in the short or medium-term.