Contents
Why we reccomend eToro for buying Gram in Thailand?
Why do we recommend it?
- It is possible to make investments in countless of different products
- You can leverage
- User-friendly and simple
- It takes techniques and moves from successful traders so you can replicate them
- Accepts “shorting” or short-selling
Official site in English: www.etoro.com/gram
You should certainly consider eToro if you are interested in investing in Gram from Thailand.
eToro is well-known for making “social trading” a trend. Social trading is a revolutionary form of investing in which traders can emulate the moves of other investors who have been generating income for a long time.
eToro has solutions for you, even if you don't have much experience in trading, since it automatizes your investment by repeating strategies from experienced traders with a very long profit history. On the other hand, if you are an expert in the subject willing to share your knowledge with the community, eToro pays you for it.
Besides, the interface of the website is so uncomplicated, ideal for a user who wants to start in the Gram world, without stressing over lots of graphs and figures.
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 main benefit is that they are more diversified compared to stocks, and have lower fees.
About Index Funds
Are the best option for those who want to invest for the long term, especially for beginners. If you don't need an amount of money for the next five or ten years, index funds are the safest option.
Contrary to what it may seem, very few fund managers can beat their benchmark return (although you have probably heard of investors who achieve huge profits).
But putting aside some exceptional cases (like Warren Buffett's), not everything is as good as it sounds: when someone brags about having beaten the index, they have probably done so for a short period, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, take into account that past performances do not ensure a future one.
The great advantage of index funds is that they solve those two issues: their commissions are insignificant and in the long term they tend to beat active managers.
Commodity market
Most people invest in raw materials because of their stability. While other assets tend to fluctuate more, commodity prices vary less and offer safety against inflation or market volatility. However, prices are subject to supply and demand in the market, so if an economic situation provokes greater demand for a certain good, the price will also go up.
Remember that the only intended income from the investment in raw materials will come from their further sale because, unlike stocks, commodities don't give returns or pay interest.
Raw materials are usually classified into two kinds: first, we have hard raw materials, which are precious metals (gold, silver, copper, and platinum), industrial metals, and oil; in second place are soft raw materials, which are agricultural goods like sugar, cocoa, soybeans, among others.
Do you know the term “leverage”? Just in case, we'll define it shortly:
the good thing about trading is that it lets you invest even more than what you really have. That is, if you have $ 100 and you put them with x2 leverage, the amount of your investment will be $ 200.
Everything you should know about leverage
Let's pretend that you have complete certainty that Gram will rise, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
You could consider requesting a loan at your bank or other financial company, but it is a process that takes time, and by the moment you receive the money, Gram might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is like a credit, but it is only a few clicks away! eToro allows you to invest (and earn) much more money than what you have on the platform's wallet. Before trading, you will how much leverage to use as in the screenshot below:
With other assets, the ability to leverage is greater. The reason: cryptocurrencies usually represent medium-long term investments, and leverage is used especially for short-term operations or day trading. That said, I'm going to explain better how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- A few days later, Gram does rises, as you thought, and now the cost of your investment is $ 2,400 (20% more), 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 initially.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
But watch out: if all goes as you intended and the asset increases, you will make money. However, if the price falls, you will also lose more money than you invested.
Supposing that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. For that reason, when trading with leverage it is fundamental to be familiar with other two terms: 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 Gram at $ 100 and request that your position is closed automatically when it goes up to $ 120. It is very useful to avoid being blinded by enthusiasm: a 20% profit is usually very good, but once you see it goes up, you might consider you can make higher profits, which is not always the case. As a result, you might lose money if you don't close on time. 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). Take into account that eToro will recommend a limit for Stop Loss, but it is better to set it lower than that.
Can you trust eToro?
eToro is very careful with the information about past performances from traders, and its integrity has been tested many times by independent organizations.
eToro follows all the strict policies required by the European Union. Its main headquarters is in Cyprus, where it is validated by the Cyprus Securities Market Commission (known as CySEC), which protects up to € 20,000 of the debts from its clients, including those from Thailand.
It is also supported by the European Financial Instruments Market or MiFID, and in the USA it responds to the Financial Conduct Authority (FCA). In addition to all these regulations, eToro has worked for fifteen years and that it has more than 20 million users, so we can rest assured that our funds are in good hands.
No less important is their excellent customer service. You can use the ticketing system, an online chat, and they also have a phone number available for assistance.
Payment methods on eToro
Among 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 have to go to “Deposit funds”, choose an amount and the payment method you prefer.
Of course, keep in mind that for security policies, you should be the account or credit card holder.
The minimum amount you can deposit is $ 200 and there is a limit of how much you can deposit if you are not verified. Therefore, in case you want to trade with larger sums, you should verify your account previously.
eToro allows deposits in any currency, but charges a fee for making the conversion to USD. So it is better to use USD directly.
How are CFDs and futures different?
If you want to know, these are the most important differences between Futures and CFDs:
- Counterparty
- Futures: the exchange is made with someone else, another trader.
- CFDs: the operations are not made with someone else, the counterparty is the broker.
- Expiry date:
- Futures: they have an expiration date. Once the contract expires, it is closed and can't be reopened.
- CFDs: there is no expiration date. It is possible to get back to a good position before you exit.
- Variety:
- Futures: there are limited options for investment
- CFDs: you have plenty of options to choose from, there is a huge diversity and types of CFDs
- Minimum investment amount:
- Futures: minimum investment is higher
- CFDs: you can get in with a small amount
- Trading costs and charges:
- Futures: as you need to invest more, rates are lower
- CFDs: costs are higher
- Use of leverage:
- Futures: it isn't possible to leverage
- CFDs: it is always possible to leverage
About Contracts for Difference
You probably have seen the term CFD more than once if you entered eToro before. Before we explain what this is, we must say that CFDs on eToro are only possible when you short sell or choose leverage higher than x2 (although the platform does not even allow this option).
FYI, and if you are considering day trading cryptocurrency or other advanced trading practices, later on you will also find information about terms such as leverage and “going short”.
eToro allows you to bet both “in the black” and “in negative”. Let's say that you are sure that the Gram will fall, so you obviously think “if it is going to depreciate (go down in price), I'll just wait and bet when it has gone down”. But if it really falls, it might mean extra money for you.
You can do by “going short”. Its operation, roughly, consists in the following:
- You obtain from a loan 100 units of Gram, valued at a total of $ 5,000 (these are completely fictional figures)
- You sell the 100 units at $ 5,000
- The price falls, as you calculated, and the unit of Gram goes from $ 50 to $ 30
- Again, you purchase the 100 units, but at the current value, $ 3,000
- You return the 100 units
- The rest is yours, so, you will have made $ 2000
It is far more simple than it may seem. Just remember that by trading in Gram on eToro, you can earn money if you foretell downs in the price.
eToro Interface
We mentioned before that eToro is very friendly and intuitive. Anyone can start using it without having to read endless explanations.
You won't have any issues with the interface if you are familiar with any of the most common social networks.
We will explain the registration steps and the different tabs that you will see on eToro.
First, you will have to fill in your personal data, like first name, last name, address….
During the sign-up process, you will also find some questions about your previous trade experience.
But don't feel intimidated. They only intend to find out about your previous experience and knowledge to determine which instruments to recommend for you.
You will see a bar that says “incomplete profile” until you fill in all the information.
Next, we will explain the fundamental sections of the site.
“Set Price Alerts” allows you to set alarms on the price of certain securities. You just have to click on the three points at the end of the line and you will be able to program a price alarm. It is a very useful tool for when you want to purchase a security which price is decreasing, but perhaps you think that it will decrease even more.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we discussed previously, the financial instruments available on are:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Currencies
- Index funds
The concept “social trading” comes to life within “People”: that is where you can duplicate the movements of the best investors with just one click.
You can search for those investors that best suit your interests: by risk level, types of instruments, average earnings… Just indicate the amount you want to invest and eToro will be in charge of replicating the movements made by the investor you selected, in proportion. “In proportion” means that if you put $ 1000 and the investor puts 10% of their capital in Amazon, eToro will invest $ 100 of your money in the same company.
Finally, you will see the popular CopyPortfolios. There are three types: Top Trader, Market, and Partner.
Sometimes you might prefer copying to CopyPortfolios than to individuals, because 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 have success anytime soon? Then look, because surely there is a CopyPortfolio about it.
How does a virtual portfolio work?
In case you do not have much experience as an investor, you can start by practicing with a “demo” option. You only need to set the “virtual” option and your operations will be carried out with an imaginary balance.
This can be a great way of gaining experience and confidence before trading with real money. You will have an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you can trade with all the different instruments available on eToro, not just with Gram.
The first attempt is not usually that good. But you can ask eToro to deposit back the virtual funds to your portfolio, and the second try you should do better.
Nevertheless, remember that investing is mostly about being prudent, and using a practice account can have the reverse effect. It is completely different to risk your real savings than to do operations with virtual funds which loss does not suppose any drama. Also, investing virtual money can prevent you from learning to control your emotions, something you should be able to do when trading.
As you may suppose, the virtual mode is kind of absurd if you want to trade in the medium or long-term, since you would be wasting years to see the outcome. Virtual accounts may be helpful for trying out short or medium-term investments.