Contents
eToro is an excellent trading platform for those who want to purchase Ethereum from USA
Advantages:
- There are lots of possibilities for investments
- You can trade leveraged
- Really user-friendly and straightforward
- It uses other successful investment strategies so you can emulate them
- Admits short-trading
Official homepage: www.etoro.com/ethereum
If you are considering buying Ethereum from USA, eToro may be the best way to do it.
“Social trading”, an innovative investment method that consists in replicating techniques and strategies from other experienced investors, has become trendy because of eToro.
If you are a novice user or haven't gained much investment experience, eToro is very helpful. You can rest assured that you are making a smart investment since the site emulates those from subjects with a long profit record. And for those skilled investors willing to share their techniques, eToro pays for it.
It is also very convenient how easy is to manage this platform, ideal for new traders who are starting with Ethereum.
About ETFs
Exchange-Traded Funds or ETFs are a type of passively managed fund, similar to index funds. They can be described as a combination of stocks and mutual funds, including the best of both. They are publicly traded and therefore can be bought and sold at any time at market price. However, their advantage is that they offer more alternatives compared to stocks, and the rates are much lower than those of an actively managed fund.
Foreign exchange market
Currency trading or Forex consists, as the name says, in the exchange of currencies. It is the conversion of one currency to another, and the aim is, evidently, to obtain a benefit out of this.
If you decide to trade EUR and USD, you purchase euros and pay with dollars, with the expectation that after obtaining the first currency (the euro) it will increase compared to the second (the dollar), to make a profit by selling it. Suppose you entered when the price of one euro is 1.10 USD and you close when it is worth 1.15: that margin is yours once you make the operation.
As you may have deduced, this kind of trading requires investing a lot, because prices rarely increase that much, or using a lot of leverage, which is always a risk. Our recommendation for those starting in the world of trading is to choose another market to begin with, since Forex is risky and complex.
eToro allows exchanging the most usual currency pairs. However, take into consideration that Forex functions through contract for differences, thus the underlying asset won't be yours.
Raw materials
The main advantage of investing in raw materials is that prices are more stable than those of other financial assets. In fact, their stability is what makes people often invest in raw materials, to take refuge from market volatility or inflation. Even so, the prices of commodities are defined by their demand. Therefore, if a generalized fear of inflation causes higher demand, the prices will also rise.
Consider that, unlike stocks, raw materials don't pay dividends. Thus, by investing in them you will only have a further income by selling them back.
Commodities can be divided into two main types: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals (for instance, iron, nickel, or aluminum), and oil; while the latter are agricultural resources, such as wheat, soybeans, vegetables, or even dairy, among many others.
About Index Funds
Are the best option for those who want to invest for the long term, mostly 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.
You may think differently, but beating the benchmark is far from being a piece of cake and very few fund managers achieve that, apart from some specific cases.
If a fund manager brags about having beaten the benchmark, they probably did it for a short time or on particular occasions, or sometimes the charges are so high that indexing would be a better decision (with minimal commissions).
Index funds offer these two advantages: although in the long term, they frequently beat active managers, and the fees are so much lower.
eToro deposit methods
When it comes to depositing money on eToro, there isn't really much to say, since it is really straightforward. You only need to select “Deposit funds”, type an amount, and choose your payment method. You can use PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
(Keep in mind that you must be the account or credit card holder, for security policies).
You can start from $ 200, and there is a limited maximum for unverified accounts. So, if your intention is to deposit higher amounts, you should contact Support to verify your account.
Finally, know 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 Contracts for Difference
You probably have found the acronym CFD all the time if you already accessed eToro. We will come back to it, but first, you should know that cryptocurrency operations on eToro are only CFDs if you are short-selling.
If you want to try at some point day trading cryptocurrency and other advanced operations, below we will also cover concepts like leverage and “going short”.
The good thing about eToro is that it allows you not only to bet “in the black”, but through CFDs you can also bet “in negative”. In a hypothetical case: you believe that the Ethereum will go down, so probably you consider that it is better to wait until it does and then go in. But if you really consider that it's going down, why not making some profits?
You can do that by “going short”. Basically, this is how it works:
- They lend you, for example, 100 units of Ethereum, with a total price of $ 5,000 (these are completely imaginary figures)
- You make $ 5,000 by selling the 100 units
- The price falls, as you thought, and the unit of Ethereum now costs $ 30 instead of $ 50
- You purchase the 100 units again, but their current value is now $ 3,000
- You return the 100 units to whom made the loan in the first place
- The difference is yours, so, you will have made $ 2000
Take into account that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Ethereum you can also earn money if you predict the downs.
How does eToro work?
As we have mentioned before, one of the best features of eToro is its simplicity: anyone can trade without having to read endless guides.
You won't have any problems with the interface if you have used any of the most common social networks.
We will explain, roughly, the registration process and the different sections that you will see on the platform.
When you open your account, you will have to fill in all the information that eToro asks for: first and last name, address…
They will also ask you about your previous trading activities.
But don't feel intimidated. They only intend to find out about your previous experience and knowledge to know which assets to recommend for you.
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. This is perfect if you want to purchase a security that is falling but you believe 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 six types of instruments on eToro are:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex
- Index funds
In the section “People”, you will find eToro users and their performances. This is where “social trading” makes sense since you can copy the movements of your preferred investors.
Through the search engine, you can find the investors that you find more interesting: by average profits, types of instruments or risk level, for example. Just indicate the amount you want to invest and eToro itself will replicate the movements made by the selected investor, in proportion. This means that if you have $ 1000 and the investor puts 10% in an asset, the platform will invest also 10% of your money (in this case $ 100) in that same asset.
In this part you will also see the three most popular types of CopyPortfolios, which are Top Trader, Market, and Partner.
In some cases, it might be better to copy from CopyPortfolios than to individuals, because the former offer more diversity. The different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector is going to succeed in the future? Then you will surely find a CopyPortfolio about it.