Contents
eToro, our favorite option for acquiring EOS in South Africa
Why do we recommend it?
- You are able to replicate investment tactics
- Allows you to short sell
- It's very user-friendly
- Leverage is allowed
- It is possible to invest in thousands of different goods
Official main site: www.etoro.com/eos
If you are thinking about purchasing EOS from South Africa, eToro may be the best option today.
This broker is popular for making “social trading” a trend, an ingenious form of investing in which users can replicate the techniques of other traders who have been making profits over time.
eToro has solutions for you, especially if you are still a beginner in trading, because it automatizes your investment by imitating moves from other experienced people with a long profit history. On the contrary, if you are an investor and want to share your methods with the community, eToro rewards you with money.
It is also very convenient how accessible is this platform, excellent for new traders who are starting with EOS.
Is eToro trustworthy for purchasing EOS?
eToro is very rigorous with the information about past performances from investors, and its integrity has been independently tested several times.
In the legal aspect, eToro follows all the strict regulations required by the European Union, legislation in which it is found. Specifically, its main offices are in Cyprus, where it is validated by the Cyprus Securities Market Commission (known as CySEC), which protects up to € 20,000 of the debts that its clients may have with creditors, including those from South Africa.
It is also backed by the European Financial Instruments Market (MiFID), and in the USA it responds to the Financial Conduct Authority (FCA). In addition to all these regulations, it should be mentioned that eToro has worked for fifteen years and that it has more than 20 million users around the world, so we can rest assured that our money is in good hands.
No less important is their excellent customer service. They have a phone number for assistance, a ticketing system, and a live chat.
How to deposit funds into your eToro account
Among the payment methods accepted on eToro 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 click “Deposit funds”, type a number and select a payment method from the previous ones.
(Consider that you must be the account or credit card holder, for security reasons).
The lowest amount you can deposit is $ 200, and there is a maximum authorized if you are not verified. Therefore, in case you plan to operate with larger sums, contact Support previously to verify your account.
The platform allows transfers in any currency, but you will have to pay a fee for the conversion to USD. That is why we recommend, if possible, using USD from the beginning.
How are CFDs and futures different?
In case you want to know, next you have some major differences between Futures and CFDs:
- Who is the counterparty? In the case of Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- Date of expiration Futures expire in a variable given date. CFDs don’t expire
- Variety of options for trading Futures include fewer options to trade. With CFDs you can trade in several different markets.
- Minimum deposit amount or “trade size” Being higher numbers, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher, although not too much.
- Is it possible to leverage? With Futures, you can’t leverage; while with CFDs it is always possible.
About ETFs
Have you heard about Exchange-traded funds? They are passively managed funds, known for combining the advantages of stocks and mutual funds, because they can be traded regularly at market price, but include a much wider diversity of assets and considerably lower rates.
Foreign exchange
Forex or currency trading allows obtaining profits by exchanging one currency for another.
If you decide to exchange the EUR/USD pair, for instance, you buy euros and pay with dollars, thinking that the euro will rise compared to the dollar. Therefore, if you bought each euro for 1.15 USD and you sell them back when their price is 1.20 USD, that margin will be yours.
You may be thinking by now that operating with currencies requires high investments, and that is correct, since variations are usually minimal, and often you will need to use high leverage (which is an important risk). Our advice for those who are new in the world of trading is not to start with Forex, but with a safer and more secure market.
The most known currency pairs are available on eToro but remember that this market works through CFDs, thus you will not own the underlying asset.
Equities
Let's talk about the most well-known assets: stocks or shares. Stocks are fractions of publicly traded corporations. It is possible to be a shareholder of a company and have returns, but you must know where to invest your money.
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 earnings among their shareholders; the latter, on the other hand, do not. However, this is not to say that the latter have less to offer. If a company does not pay every year but has a lot of potential, it can still represent a good inversion, since selling the shares eventually could pay a lot more.
If you invest in shares that pay out dividends, you will receive them into your account on eToro. Therefore, you can withdraw that money or you can choose to reinvest it. Nevertheless, compound interest can do magic, so our suggestion is that you reinvest in the company.
Consider that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive dividends as the trade is a CFD. For long-term investments, it is not advisable to use leverage: you can end up losing money, since you will not get dividends and, on top of that, you will have to pay fees while your operation is open.
ETFs
ETFs or Exchange-Traded Funds are a type of passively managed fund, similar to index funds. We can say that ETFs are halfway between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
How do Contracts for Difference Function?
You probably have found the term 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 when you go short or leverage above x2 (and this is not even available on the platform).
If you are considering day trading cryptocurrency or other advanced trading practices, below you will also meet terms such as going short and leverage.
The advantage of eToro is that it allows you not only to bet “in the black”, but through CFDs you can also bet “in red”. Let's say that you believe that the EOS will fall, so perhaps you think that the best thing to do is refrain from getting in until it does. However, if it really falls, it might mean extra money for you.
You can accomplish that by “going short”. Basically, this is how it works:
- You get from a loan 100 units of EOS, with a total price of $ 5,000 (these are completely made up numbers)
- Then, you get $ 5,000 by selling them at the market price
- The EOS goes from $ 50 to $ 30 (as you presumed, the price decreases)
- Again, you purchase the 100 units, but now their price is $ 3,000
- Now you return the 100 units to whoever loaned them to you
- You will have made $ 2000, since you keep the difference
Consider that it is much simpler than it sounds: we can just say that by trading in EOS you can also earn money if you predict the downs.
How to use eToro
We mentioned before that eToro is very easy to manage. Anyone can start using it without previous experience or long explanations.
If you are familiar with any of the most popular social networks today, such as Instagram or Facebook, you can perfectly use this platform.
We will talk about the registration process and the different sections of eToro.
When you register, you will have to fill in your personal data.
During the sign-up process, you will also find some questions about your previous trade experience.
But don't feel like you are taking an exam. They only intend to find out about your previous experience and knowledge to know which financial instruments to recommend for you.
Let's see what the different sections of the page are.
With the “Set Price Alerts” tool, you'll be able to program an alarm when a security is at a certain price. This is helpful if you want to buy an asset that is falling but you believe it will decrease even more.
“News Feed” is the more “social” section. There, users can interact and share experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. As we discussed in this guide, the different financial assets available on are:
- Cryptocurrencies
- ETFs
- Stocks
- Commodities
- Forex
- Index funds
The concept “social trading” makes sense within “People”: there, you can copy the strategies of any user you choose. You'll be able to see all their profiles and performances.
Using the search box, you can find the investors that you find more interesting: by average earnings, market or risk level, for instance. You just have to choose the amount you want to invest and eToro itself will be in charge of replicating the movements of the investor you selected, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% in an asset, eToro will invest also 10% of your funds (in this case $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
Remember that in some cases, it might be better to copy from CopyPortfolios than to particular traders, since the former offer more diversity. The different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … You think that a certain sector is going to have success anytime soon? Then look, because surely there is a CopyPortfolio about it.
Investment strategies
There are different methods or ways for crypto trading, such as buying and holding or day trading (and using price volatility in your favor), for naming just a couple.
My recommendation for those who are starting to trade is something in the middle: when you open your EOS position, set a dynamic stop loss 15-20% below the highest price, and let the rest happen on its own.
For instance, if you purchase a cryptocurrency when its price is $ 15, it rises up to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will get a pretty good income.
I know it might sound more appealing to sell when the price is at its peak, but that is simply not possible. The mentioned strategy is much more realistic and, well applied, it can work very well for you.
At some point, you will be ready for more advanced investment strategies, like using leverage or going short.