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eToro is an excellent broker for those who are in South Africa and want to acquire Dash
Why do we recommend it?
- It is possible to make investments in plenty of other goods
- Leverage is allowed
- It's really simple and intuitive
- It offers strategies from successful traders so you can copy them
- You can short sell
Go to the official website: www.etoro.com/dash
You should definitely consider eToro in case you are interested in acquiring Dash from South Africa.
“Social trading”, an innovative form of investing by replicating techniques and moves from other experienced investors, has become trendy because of eToro.
eToro has solutions for you, especially if you don't have much experience in trading, because it puts your investment on automatic by repeating strategies from those who have been doing it for years and making profits. And for those skilled investors willing to share their techniques, eToro rewards your knowledge with money.
Besides, the interface of this site is amazingly manageable, ideal for users who want to begin in the Dash world, without getting crazy with tons of graphs and figures.
About Contracts for Difference
If you already have been on eToro, you probably realized that the acronym CFD appears repeatedly. We will come back to it, but you should know first that cryptocurrency trading on the platform is only CFD when you are short-selling.
We will also explain terms such as going short and leverage, in case you are interested in day trading cryptocurrency or more advanced operations.
Even if you aren't “in the black”, you can still operate on eToro with CFDs. In a hypothetical case: you have the certitude that the Dash will go down, so probably you consider that the best thing to do is refrain from getting in until it actually falls. However, if it really falls, it might mean extra money for you.
The operation known as “going short” will allow you to do that. It functions, pretty much, like this:
- Someone lends you, let's say, 100 units of Dash, which cost $ 5,000 (these are completely fictional numbers)
- You earn $ 5,000 by selling them at the market price
- The Dash devaluates from $ 50 to $ 30
- You buy the 100 units again, but at their current price, $ 3,000
- You return the 100 units to the loaner
- The difference is yours, so, you will have made $ 2000
Consider that it is much simpler than it sounds: we can summarize this whole operation by saying that by trading in Dash you can also earn money if you anticipate it will fall.
What's the difference between CFDs and futures?
How are Futures and CFDs different?
- Which are the counterparties? With Futures, the counterparty is another trader. In CDFs, it’s the broker (eToro)
- Expiration date Futures have a determined expirationdate, while CFDs don’t have expiration date
- Markets available for trading Futures include fewer options to trade. With CFDs you can trade in several different markets.
- Minimum investment amount or “trade size” Being higher numbers, Futures require, proportionally, lower costs. Costs for CFDs are a bit higher.
- Use of leverage With Futures, you can’t leverage; while with CFDs leverage is always available.
Have you heard about “leverage”? We'll put it simply:
the good thing about trading is that it allows you to invest more money than you can have in a given time. Let's say that you have $ 100 and you choose to leverage x2, the amount of your investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say now that you are sure that the price of Dash is about to raise its price, thus you decide “going long”.
You are certain that Dash will go up, but you can only invest $ 1,000. Despite that, why miss the opportunity to make more money?
Perhaps you could go to your bank, request a loan, wait for it to be accepted, wait for the money, send the money to eToro, confirm that it arrived, and then buy Dash… Nevertheless, when you finish doing all that, probably Dash would be already at a much higher price, and investing wouldn't be a good idea at that moment.
Leverage is just like a credit, and you will only have to click a few times! eToro allows you to operate with much higher amounts than what you actually have on the platform's wallet. As in the image below, you will see the different options you have:
Trading with other assets allows you to use higher leverage. The reason is that cryptocurrencies are a value that is invested in the medium-long term, and leverage is used primarily for day trading or short-selling. 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 (remember that$ 1,000 are a “loan” from eToro).
- Then, turns out that Dash does increases, as you assumed, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back.
- Once the $1,000 from leverage is returned, you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours initially.
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is quite good.
It may sound too good to be true. The trick is that the risk of losing out also increases. If everything goes as you planned, you will earn profits in little time; but if the opposite happens, you will also lose more really fast.
For instance: if instead of increasing by 20%, the price falls by 10%, you do not lose $ 10, but twice (the leverage) that figure, that would be $ 20. That is why the concepts of Take Profit and Stop Loss are so important when using leverage.
Take Profit is an automatic order of selling once the asset achieves a certain price: you buy Dash at $ 100 and you ask eToro to close your operation as soon as the price goes up to $ 120. It is very useful to avoid being blinded by greed: we would all accept a 20% profit when making the investment, but when you reach that 20% it is easy to ask yourself “what if this keeps going up and I can earn even more?”. It's like you got assured in advance that you won't be irresponsible.
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). For that reason, it is vital to establish a Stop Loss lower than that suggested by the broker.
ETFs
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are somewhere between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Equities
Stocks are the most common securities. Some publicly traded companies divide their capital into portions: you can be one of those shareholders, but first, you have to know where and how to make your investment.
We can classify 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 their earnings among the stockholders; the latter, on the contrary, 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 give it up just because it does not pay you every year, since selling the shares in the future could pay a lot more.
On eToro, if you invest in stocks that distribute dividends, you will receive them in your account, and you can collect them in cash or reinvest them. Our suggestion is, if you don't have financial urgencies, that you don't renounce the magic of compound interest and reinvest it in the company itself.
Consider that on eToro you can use leverage to “dope” your trades, but in that case, you will not receive returns as it would be a CFD. That is why for long-term investments, it is better not to use leverage: you can end up not gaining at all, since you will not receive interest and also you will have to pay fees while your operation is open.
Commodity market
Most people invest in raw materials due to their stability. While other assets present higher fluctuation, raw materials prices vary less and offer security against inflation or market volatility. Nevertheless, 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 increase.
Consider that, unlike shares, commodities don't pay dividends. Therefore, by trading with these you will only have a further profit by selling them back.
Commodities are commonly classified into hard raw materials, which include precious metals as gold, silver, or copper, as well as industrial metals, and oil; and soft raw materials, which are basically agricultural goods, like soy, cocoa, corn, or rice.
Forex trading
Forex or currency trading is the exchange between two currencies.
In case you decide to trade euros and dollars, you purchase euros at their price in dollars, with the expectation that after obtaining the first currency (the euro) it will raise its price 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 exit when it is worth 1.15: thus, you will gain that margin.
As you may have deduced, operating with currencies requires investing a lot, because prices never increase that much, or using a lot of leverage, which is a bit like skating on thin ice. In case you are new to the world of trading, we don't recommend beginning with this market, because it is very risky and complex.
eToro allows exchanging the most popular currency pairs. However, consider that in this market sales are made through CFDs, thus the underlying asset won't be yours.
Investment strategies
There are different methods or ways for crypto trading, such as day trading or buying and holding, for naming just a couple.
My suggestion for those who are beginning to invest is something in the middle: when you open your Dash position, place a stop-loss order 15-20% below the highest price, and let the rest happen on its own.
This means that if, for instance, you purchase a cryptocurrency at $ 10, it rises to $ 20 and then falls to $ 12, your operation will be closed at $ 16-17 and you will make a pretty good profit.
I know it's tempting to look to sell when the price is at its peak, but unless you're clairvoyant, that will never be possible. The mentioned method is much more down-to-earth and it can give great results.
Later on, you will be able to apply more sophisticated techniques, such as going short or using leverage.
Is eToro trustworthy for purchasing Dash?
eToro is very careful with the data about past performances from users, and its integrity has been tested many times by independent organizations.
The main headquarters of eToro is in Cyprus, and therefore it is approved by the Cyprus Securities Market Commission (known as CySEC), which can cover up to € 20,000 from its client's debts, including those from South Africa. The platform complies, on the other hand, with all the strict regulations 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 around the world, and it has been operating for fifteen years. In short, we can be confident that our money is in safe hands.
It is also important to mention the good functioning of its customer service. They have a phone number for assistance, a ticket system, and a live chat.
How does a virtual portfolio work?
For those who still don't have much experience in investing, a demo account can be useful. Just assure yourself that the virtual mode is set in the upper left corner of the page and you can start practicing with an “imaginary” balance.
A virtual account can be a good way of practicing before starting to trade with real funds. When you create your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of assets available on the platform, besides Dash.
If your performance is not that good and you lose your funds, there is always a possibility to replenish your virtual funds. You'll probably do better on the 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 virtual funds that you don't mind losing.
Evidently, if you are interested in trading in the long or medium-term, there is no point in using the virtual mode and having to wait for years. But it can be ideal if you want to practice short and medium-term trading.
How does eToro work?
We already said that one of the best things about eToro is how simple it is to use the interface. It isn't necessary to read a lot or have previous knowledge to start trading.
You won't have any issues with the interface if you are familiar with any of the most common social networks, like Whatsapp or Linkedin.
We will explain the registration steps and the different tabs that you will find on eToro.
First, 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 trade experience.
But don't feel intimidated, there is no right or wrong answer. The objective is to know more about you and be clear about which financial instruments they should suggest according to your knowledge and experience.
Let's see what the different sections of the platform are.
“Set Price Alerts” allows you to put alarms on the price of certain assets. You only need to click on the three points at the end of the line and you will be able to program a price alert. This is very helpful when you are after a security which price is decreasing, but perhaps you think that it will decrease even more.
In the “News Feed” tab is the most social part of eToro: where users are interacting all day and sharing valuable information.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the different financial instruments that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Commodities
- Forex trading
- Index funds
In “People”, you can find the public profiles of eToro users and their performances. This is where you can replicate with just one click the movements of the investors that inspire you the most.
Through the search engine, you can find the investors that you find more interesting: by risk level, types of instruments, average earnings… Just indicate the amount of your investment and eToro itself will replicate the movements made by the selected investor, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, eToro will invest also 10% of your money (that is, $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into three categories, Top Trader, Market, and Partner.
The advantage of copying to CopyPortfolios instead of people is that this way the risk will be more diversified. There are all kinds of portfolios that you can recognize easily and are divided by sectors. Therefore, if you think a specific sector, like gaming or drones, will prosper in the future, you should look for that specific portfolio.