Contents
eToro is an outstanding broker for those who want to buy Ripple from South Africa
Why do we recommend it?
- There are uncountable possibilities for investments
- You can leverage
- User-friendly and simple
- You can learn from other investment moves
- Allows you to short sell
Go to the official website: www.etoro.com/ripple
You should consider eToro if you are interested in investing in Ripple from South Africa.
“Social trading”, a relatively new form of investing by replicating techniques and moves from other experienced investors, has become popular because of eToro.
eToro is very useful if you don't have much experience in trading, because it puts your investment on autopilot 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.
Another advantage is how easy the interface is, which turns out perfect for new users that are just learning all about the trading world.
Can you trust eToro?
eToro is very careful with the information about past performances from investors, and its reliability has been tested many times by independent organizations.
eToro complies with all the demanding policies of the European Union. Specifically, its head office is in Cyprus, where it is certified by the Cyprus Securities Market Commission or CySEC, which can cover up to € 20,000 of the debts from its clients (those from South Africa included).
eToro responds to the European Financial Instruments Market (MiFID), and to the Financial Conduct Authority (FCA) in the United States of America. You should also know that it has a trajectory of fifteen years, with more than 20 million users all over the world. So, you can be sure that your money is safe.
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
Within the payment methods that you will find on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to explain here: making a deposit with eToro is very easy. Just go to “Deposit funds”, type a number and select your payment method.
Remember that for security reasons, you need to be the owner of the account or the credit card.
The minimum first time deposit is $ 200, and there is a maximum limit for unverified accounts. So, if your intention is to deposit larger sums, you should contact Support to verify your account first.
The platform accepts deposits in any currency, but charges a commission for making the conversion to USD. So it is better to use USD from the beginning.
What is an ETF?
ETFs or Exchange-Traded Funds are similar to index funds. We can say that ETFs are halfway between stocks and funds: they are traded in the market like stocks, during the day. However, their main benefit is that they offer more alternatives compared to stocks, and have lower fees.
Foreign exchange
Forex or currency trading allows obtaining profits by exchanging one currency for another.
In case you decide to exchange euros and dollars, you acquire euros and pay with dollars, with the expectation that the euro will increase 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 that this form of trading requires high investments, and that is correct, because fluctuation in prices is never that dramatic, and if you use a lot of leverage to counter that, you will take a considerable 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 common currency pairs are available on eToro. Still, take into consideration that this market functions through CFDs, which means the underlying asset won't be yours.
Commodity market
The major attraction of investing in raw materials is that prices are more stable than those of other assets. In fact, their security is what makes people often invest in raw materials, to take refuge from possible inflation or market volatility. Even so, the cost of raw materials depends on supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Consider that commodities don't pay dividends. So, the only potential further income would come from a future sale of the asset.
Commodities are usually categorized into hard raw materials, which include precious metals, industrial metals, and oil; and soft raw materials, which are basically agricultural products, like soy, cocoa, corn, or rice, for instance.
About Index Funds
If you are interested in long-term investments, and you won't need to take back your money in at least five years, index funds can be the best choice. This type of investment is also suitable for beginners since the risks are much lower. Besides, they offer more diversity.
Perhaps you have a different idea, but very few fund managers can beat their benchmark return (yes, you have probably heard of managers who obtain huge returns).
But besides Warren Buffett and a couple more, 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 these two advantages: they usually beat active managers in the long term, and the rates are minimal.
About Contracts for Difference
You probably have found the acronym CFD more than once if you already accessed eToro. Before we come back to it, we must say that cryptocurrency trading on eToro is only CFD when you go short or choose leverage above x2 (and this is not even available on the platform).
If you are considering day trading cryptocurrency and other more advanced practices, we will also explain terms like going short and leverage.
eToro allows you to bet both “in the black” and “in negative”. In a hypothetical case: you have the conviction that the Ripple will go down, so perhaps you think that the best thing to do is wait until it does and then go in. Nevertheless, if it really falls, it might mean extra money for you.
You can do this through a practice known as “going short”. Its operation, roughly, works like this:
- Someone lends you, for example, 100 units of Ripple, valued at a total of $ 5,000 (these are completely made up figures)
- You make $ 5,000 by selling the 100 units
- The Ripple goes from $ 50 to $ 30 (as you predicted, it devaluates)
- You purchase the 100 units again, but their total current value is now $ 3,000
- Then you give back the 100 units to the loaner
- The rest is yours, so, you will have made $ 2000
Keep in mind that it is much easier than it sounds: we can just say that by trading in Ripple you can also make money if you predict it will fall.
eToro Interface
We mentioned before that one of the best things about eToro is how simple it is. You don't need to read a lot or have previous knowledge to start trading.
If you are familiar with any of the most popular social networks today, like Twitter or Facebook, you can perfectly manage this platform.
Now we will walk you through the registration process and the different sections of the page that you should know.
First, you will have to fill in all the information that eToro asks for: first and last name, address…
Additionally, you will see that they ask you some questions about your experience as an investor.
But don't feel intimidated. They only intend to find out how much you know and which instruments to recommend for you.
Now we will talk about the different sections of the page.
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 buy a security and you are waiting for its price to fall.
“News Feed” is for social purposes and interaction. This is the section where users can share opinions and information.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we already mentioned the kinds of assets on eToro:
- Cryptocurrencies
- ETFs
- Shares
- Raw materials
- Currencies
- Index funds
In the tab “People”, you can find eToro users and their historical performance. This is where the term “social trading” makes sense since you can copy with just one click the movements of the traders that you find most inspiring.
You can search for those investors that you find more interesting: by risk level, types of instruments, average earnings… You just have to type the amount you want to invest and eToro itself will replicate the movements of the selected investor, in proportion. “In proportion” means that if you have $ 1000 and the trader puts 10% in an asset, the platform will invest also 10% of your money (that is, $ 100) in that same asset.
In this section you will also find the three main types of CopyPortfolios, which are Top Trader, Market, and Partner.
Remember that in some cases, it might be better to copy from CopyPortfolios than to particular investors, because you avoid putting all your eggs in one basket. The portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … You think that a certain industry will prosper anytime soon? Then look, because surely there is a CopyPortfolio about it.
Trading strategies
You can operate cryptocurrencies in many different ways: from purchasing and waiting to day trading using volatility of the market in your favor.
My suggestion for those who are starting to invest is something in the middle: when you open your Ripple position, place a stop-loss 15-20% below the maximum price, and let the rest happen on its own.
For example, if you purchase a cryptocurrency at $ 15, then it rises up to $ 25 and falls back to $17, the stop-loss will close your position at $ 21 or $ 22. Therefore, you will obtain a fine profit.
I know it might sound more appealing to sell when the cost is at its highest, but unless you're clairvoyant, that will never be possible. The mentioned strategy is much more down-to-earth and, well applied, it can work very well.
Eventually, you will be ready for using more advanced investment techniques, such as short-selling or using leverage.
Virtual account
Are you taking your first steps in trading? Using a demo account can be useful. Just make sure the virtual mode is set and you can start practicing with a “fictional” amount.
A virtual portfolio can help you to practice and gain experience before starting to operate with real funds. When you open your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of financial instruments available on the platform, besides Ripple.
The first attempt is not usually that good. But you can ask support to deposit back the virtual $ 100k to your portfolio.
Keep in mind that trading is mostly about being cautious, and perhaps a practice account can prevent you from controlling your impulses. It will never be the same as risking your own money.
And of course, the demo mode is kind of absurd if you intend to invest in the medium or long-term (which almost assures you a profit only by replicating an index), since you would be wasting years. Virtual accounts may be ideal for trying out before investing in the short or medium-term.