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eToro, our reccomended platform for buying Zcash from South Africa
Why do we recommend it?
- It takes other successful investment strategies so you can replicate them
- Allows you to short sell
- It is uncomplicated and manageable
- eToro offers leverage
- There are uncountable investment opportunities
Homepage: www.etoro.com/zcash
eToro is probably the best option nowadays to obtain Zcash from South Africa.
This broker is famous for making “social trading” a trend, a revolutionary form of investing in which investors can replicate the movements of other traders who have been generating income for a long time.
eToro is very helpful if you don't have much experience in trading. You can rest assured that you are doing a smart investment move when replicating those from subjects with a great deal of expertise. Additionally, in case you do have experience in investment, the platform pays you for sharing it.
Besides, the interface of this site is amazingly intuitive, ideal for those who want to begin in the Zcash world, without getting crazy with tons of graphs and figures.
How do Contracts for Difference Function?
You probably have found the initials CFD more than once if you already accessed eToro. We will come back to it, but you should know first that cryptocurrency trading on eToro is only CFD when you short sell or choose leverage higher than x2 (but the platform does not even allow this option).
We will also refer to terms like going short and leverage, in case you are considering day trading cryptocurrency or more advanced practices.
Even if you aren't “in the black”, you can still bet on eToro with CFDs. For instance, you are sure that the Zcash will fall, so perhaps you consider that it is better to wait until it does and then go in. However, if you are convinced that it is going down, why not take advantage of that?
You can accomplish that by “going short”. Here's how it works ,roughly:
- You ask someone for a loan of, let's say, 100 units of Zcash, which total price at the moment is $ 5,000 (obviously, these figures aren't real)
- You sell the 100 units at $ 5,000
- The price falls, as you calculated, and the unit of Zcash now costs $ 30 instead of $ 50
- You obtain the 100 units again, but their total 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
Consider that it is much easier than it sounds: we can just say that by trading in Zcash you can also make money if you foretell the downs.
Are you familiar with the term “leverage”? We'll put it simply:
trading lets you invest higher figures than what you really have. Let's say that you have $ 100 and you put them with x2 leverage, you will be really investing $ 200.
Why using leverage and how to do it
Let's say now that you know that the price of Zcash is about to raise its price, and you want to take a long position.
You are positive that Zcash 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, put something as a guarantee, wait for it to be accepted, wait for the money, and then obtain Zcash… Nevertheless, when you finish doing all that, probably Zcash would be already much higher, and investing wouldn't be a good idea anymore.
With leverage, you can obtain that amount of money just by clicking your mouse. It's exactly like a loan, but much better: from eToro itself. You can get financing to operate with much more money than you actually have on the eToro Wallet. As in the image below, you will see the different options you have:
Trading with other assets allows you to use even more leverage. Why? Because leverage is most used for short-term operations, and cryptocurrencies tend to be a medium or long-term investment. But let's see how this works with the previous example:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 (remember that$ 1,000 was “borrowed” from eToro).
- A few days later, Zcash does increases, as you thought, and now the cost of your investment is $ 2,400 (20% higher), so you decide to sell back.
- The $ 1k of leverage will be deducted, and you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours from the beginning.
In conclusion, by investing $ 1000 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
But watch out: if everything goes ok and the price goes up, you will make money. On the opposite scenario, if the asset decreases, you will also lose more money than you invested.
Supposing that the asset didn't increase by 20%, but it decreased also by 20%, you won't lose $ 20 but double, $ 40. For that reason, when using leverage it is crucial to know about Take Profit and Stop Loss.
Take Profit is used as a form of reducing risks when trading. When you enter, you can set a profit limit and ask that your position is automatically closed when the asset reaches a price.
If you bought Zcash at $ 100, you program eToro to close once it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to wait a bit longer in case it keeps rising, which could be a mistake.
Stop Loss is even more important, particularly when trading with leverage, since a small loss could be fatal for your wallet. You always need to mark a Stop Loss lower than that suggested by the broker.
About ETFs
Have you heard about Exchange-traded funds? They are similar to index funds and are known for combining the benefits of stocks and mutual funds, because they can be exchanged at any moment in the market, but include a much wider diversity of assets and the fees are significantly lower.
Index Funds
This is the best option for people who can invest in the long term, mostly for those who are starting to trade, because it is inexpensive, diversified, and safer.
Contrary to what it may seem, it is very hard to beat the market (although you have probably heard of investors who achieve huge profits).
But putting aside some exceptional cases (like Warren Buffett's), all that glitters is not gold: when someone brags about having beaten the index, they have probably done so for a short period, or will charge you so many commissions that it ends up being better for you to index (whit minimal commissions). Also, if something happened in the past it doesn't necessarily represent a regular behavior.
Index funds offer solutions to both concerns: their rates are minor and in the long term they almost always beat active managers.
Forex trading
Currency trading or Forex consists, as the name says, in the exchange of currencies. Put differently, is the conversion between a pair of currencies to make a profit through the operation.
If you decide to exchange EUR and USD, you buy euros and pay with dollars, expecting 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, you'll be keeping that difference.
Perhaps you already inferred this, but this kind of trading requires a large capital, since fluctuations are normally low, or using much leverage, which implies an extra risk. If you are just starting to trade, we don't recommend beginning with Forex, because it's not the safest option.
You can exchange with almost every currency on eToro but remember that in this market sales are made through CFDs, so the underlying asset won't be yours.
Commodity market
The main benefit of investing in commodities 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 economic adversities or fears of inflation. Nonetheless, the cost of commodities is determined by supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Remember that the only intended profit from the investment in raw materials will come from their further sale because, unlike shares, commodities don't pay dividends.
Raw materials are usually categorized into hard raw materials, which include precious metals, industrial metals, and oil; and soft raw materials, which are basically agricultural goods, like soy, cocoa, corn, or rice.
Investment strategies
There are many ways to operate cryptocurrencies: from buying and holding to day trading using volatility of the market in your favor.
My suggestion for those who are beginning to invest is going halfway between the two options: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.
For example, if you purchase a cryptocurrency at $ 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.
You may be wondering: why not selling when the price is at its maximum? But that would only work for a psychic or a fortune-teller. The mentioned strategy is completely realistic and can work out perfectly if it is well applied.
Eventually, you will be ready for applying advanced trading strategies, such as using leverage or going short.
How to deposit funds on eToro
Within the payment methods available on eToro are: credit card, PayPal, bank transfer, Neteller, and Skrill. There is not much to say here: making a deposit with eToro is really simple. Just go to “Deposit funds”, type the amount and choose a payment method from the previous ones.
Of course, keep in mind that for security reasons, 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, if you want to trade with higher amounts, contact Support previously to verify your account.
eToro accepts deposits or transfers in any currency, but you will have to pay a fee for the conversion to USD. So it is better to use USD from the beginning.
Can you trust eToro?
Many independent tests have been applied to the platform to prove its reliability in displaying previous performance statistics. The results have always confirmed that eToro is very precise with the data.
eToro follows all the demanding policies requested by the European Union, legislation in which it is found. Specifically, its head office is in Cyprus, where it is validated by the CySEC or Cyprus Securities Market Commission, 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 is under the control of the Financial Conduct Authority (FCA). Besides 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 money is safe.
No less important is their excellent customer service. You can reach them by phone or use their live chat.
How does eToro work?
As we have referred among the positive aspects of eToro, the best thing about this platform is its extraordinary simplicity: anyone can trade without having to read endless explanatory texts.
You won't have any problems with the interface if you are familiar with any of the most common social networks.
We will explain, roughly, the registration steps and the different tabs that you will see.
You will have to provide some personal data when registering.
To complete your registration, you will have to answer some questions about your experience at investing.
But don't feel like you are taking an exam. They only intend to find out about your previous experience and knowledge to determine which assets to recommend for you.
You will see a bar that says “incomplete profile” until you fill in all the information.
Let's get to know the different sections of the platform.
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 purchase an asset and you are waiting for it to decrease.
The section “News Feed” allows users to interact and share their experiences and knowledge.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we already discussed the kinds of assets that are available on eToro:
- Cryptocurrencies
- Exchange-Traded Funds
- Shares
- Raw materials
- Forex trading
- Index funds
The concept “social trading” comes to life within “People”: there, you can duplicate the strategies of the best investors.
Using the search bar, you can find the users that best suit your interests: by average profits, market or risk level, for example. Just indicate the amount of your investment and eToro itself will be in charge of replicating the movements of the investor you chose, in proportion. “In proportion” means that if you have $ 1000 and the investor puts 10% of his or her balance in an asset, the platform will invest also 10% of your funds (that is, $ 100) in that same asset.
In this section you will also see the three most popular types of CopyPortfolios, which are Top Trader, Market, and Partner.
In some cases, it might be preferable to copy from CopyPortfolios than to individuals, since the former offer more diversity. There are all kinds of portfolios that you can identify easily and are divided by sectors. So, in case you suspect a specific sector, like gaming or oil, has a good chance of prospering, you should look for that specific portfolio.