Trading Crypto On eToro

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Trading Crypto On eToro

Set up in 2007, eToro became a leading trading platform across the world. Offering investors access to several markets and asset classes, the platform attracts a mix of novice and experienced users, eager to generate a return from their individual strategies.

Cryptocurrencies are one of the latest tradeable markets to be added to the platform. Today, you can trade Bitcoin, Ethereum, and a host of other cryptocurrencies, using several financial instruments. In addition, you can manage all of your investments, including those in forex and stocks from a central, intuitive user interface, which is also available on mobile.

How to Trade Cryptocurrencies On eToro

eToro allows you to invest in a variety of cryptocurrencies. Apart from the most popular ones, the platform also supports Binance Cash, Stellar Lumens, NEO, EOS, and host of other secondary coins. There are different ways to trade cryptocurrencies on the platform, but you would normally follow these steps:

Trade Cryptocurrency on eToro
Screenshots are shown for illustration purposes only. Actual product may vary
  • Step 2 – The page that follows shows all you relevant investment opportunities which are linked to cryptocurrencies, which you can filter using the marked icon
Invest in Cryptocurrencies on eToro
Screenshots are shown for illustration purposes only. Actual product may vary
  • Step 3 – If you would not like to invest your money directly, but instead would like to use eToro’s CopyTrader platform, click on the highlighted link
CopyTrader on eToro
Screenshots are shown for illustration purposes only. Actual product may vary

eToro’s CopyTrading platform is an innovative and popular way to invest in cryptocurrencies using the knowledge and experience of other platform users. Using a series of filters you are able to find successful investors who match your risk and investment strategies and using the platform’s automatic tools, you can emulate their investments with your capital.

When trading cryptocurrencies on eToro you can choose between:

  • Coins – investing directly in cryptocurrency tokens, such as BTC, ETH, and LTC
  • Crypto Crosses – investing in popular crypto/crypto crosses, such as ETH/BTC, ETH/EOS, and BTC/XLM
  • Currency Crosses – investing in popular crypto/fiat crosses, such as BTC/EUR, ETH/EUR, and ETH/GBP
  • Commodity Crosses – investing in crypto/commodity crosses, which are currently limited to just Gold/BTC

eToro is a safe and reliable platform which offers a transparent fee structure, with no commissions or hidden fees. Trades are executed immediately at the listed price, maximising your potential returns. Moreover, you get access to a variety of tools and resources to help you succeed. 

75% of retail investor accounts lose money when trading CFDs with this provider

Do Your Research

The cryptocurrency industry, like most others, has its own jargon and acronyms. Amongst these is DYOR, Do Your Own Research. Whilst the term itself is very easy to understand it is a step which is commonly overlooked by novice traders.

Before you start investing with eToro you should learn the basics about cryptocurrencies and investing. The platform itself also offers a comprehensive educational centre, and for every tradeable asset, you will have access to historical charting information. In order to understand this, you should learn the basics of chart reading and be aware of the latest cryptocurrency news.

With knowledge on your side, you have a higher probability of developing an effective investment strategy which generates a recurring return.

What Resources does eToro Provide?

Bitcoin Graph

To help you trade cryptocurrencies, eToro offers several resources, ranging from simple tools to exceptional features. When you’re first learning about trading digital currencies, you will need to practice as you go along. eToro offers a free demo account with $100,000 in virtual money. This account will behave exactly like the real one, with the only exception being that none of your investment capital is at risk.

Traders looking to understand the long-term trends of particular assets can make use of detailed charts, which include tools to carry out Fundamental Analysis and Technical Analysis. Commonly used in Trend Trading, these studies help determine whether the price of a digital token is reaching a reversal point.

eToro’s resources extend into educational and functional, available on desktop and mobile devices. In addition, the platform offers one of the best mobile applications for trading on the go.

75% of retail investor accounts lose money when trading CFDs with this provider

When are you Buying the Underlying Cryptocurrency Asset vs a Cryptocurrency CFD on eToro?

Generally, when people talk about investment, they assume that they are buying a particular asset, such as an Ethereum or Binance Cash coin. Whilst this is a popular investment option, it is not always the most efficient. Buying assets directly requires storing and security. Traders who do not need to own the underlying asset, but only hope to profit from asset price movements should consider Cryptocurrency Contracts for Difference (CFDs).

Depending on your jurisdiction, you might have the option to choose between buying assets or CFDs. The following is an outline of eToro’s policy on the matter.

eToro (UK) Ltd Clients

Clients registered with eToro’s UK subsidiary purchasing leveraged and short transactions are investing in cryptocurrency CFDs. Underlying cryptocurrency assets are bought with long, non-leveraged transactions.

eToro (Europe) Ltd Clients

Clients registered with eToro’s Cypriot subsidiary short-selling cryptocurrency are investing in CFDs. Meanwhile, investing in any long, non-leveraged positions involves purchasing the underlying asset. eToro (Europe) has also recently introduced the possibility of utilising x2 leverage to purchase the underlying assets, with the exception of CopyTrader and CopyPortfolio transactions. This option is not available to Chinese users.

eToro Aus Capital PTY Ltd Clients

Clients registered with eToro’s Australian are only able to purchase cryptocurrency CFDs.

How to Use Stop Loss & Take Profit to Your Advantage (Explain a bit how Trailing Stoploss works)

Before you execute a cryptocurrency order on eToro you have the opportunity to set automatic limits which lower your risk exposure. Recommended by the majority of investment professionals, these limits are an ideal safeguard in case you are not available when an asset’s price sudden drops or behaves erratically. The two primary limits are:

  • Stop Loss – automatically closes a position in the eventually that your capital has reduced by a pre-determined amount
  • Take Profit – automatically closes a position once your investment has generated a pre-determined amount of profit
Image source: eToro
Screenshots are shown for illustration purposes only. Actual product may vary

Recently, the innovative platform has also introduced a new limit, known as Trailing Stop Loss (TSL). With TSL active, your position will remain open as long as the asset’s price is rising, but will automatically close once the price starts to reverse.

75% of retail investor accounts lose money when trading CFDs with this provider

Invest What You’re Willing to Lose

No matter whether you are investing in cryptocurrency assets or the higher risk cryptocurrency CFDs, you should always only invest what you can afford to lose. The emotions linked to risking more than you are comfortable with will almost certainly become a barrier to good decision making, and the added stress is something which no trader needs more of.

eToro is not a cryptocurrency scam promising you guaranteed returns. It is a trading platform where some investors make money whilst others lose it.

HODL

Hodling is another popular cryptocurrency keyword. It is an investment strategy based on the belief that the price of any digital currency will eventually rise. When the price dips you should not sell out of panic, but instead Hodl until the price increases once more.

Diversifying Your Portfolio

By spreading your investment capital across multiple assets you are decreasing the risk that a bad decision could spell the end of all your money. Whilst you should never spread yourself too thin, investing in two or three coins is better than relying on just one.

75% of retail investor accounts lose money when trading CFDs with this provider

Overcoming Fear, Uncertainty and Doubt

The final acronym you will learn in this guide is FUD. Meaning fear, uncertainty, and doubt, FUD is a barrier to sound investment strategies and should be overcome by those who wish to trade successfully in the long term. Whilst there is no guaranteed way to deal with FUD, it is always a good idea to ensure that before you start investing you have DYOR. In addition, you shouldn’t seek to diversify your investment and ensure that you can afford any losses.

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