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How to buy
If you live in Egypt, the best way to invest in NIO shares is, definitely, this popular broker.
eToro*, one of the main brokers around the world, is registered and licensed, among others, by the Australian Securities and Investments Commission (ASIC).
We recommend eToro because you can create an account for free with this broker, and its fees for trading online are very low. Besides, eToro is available in our language, accepts users from Egypt, it is really easy to manage, and its friendly interface is ideal for those who are starting to trade with cryptocurrencies and stocks.
How to sign up, step by step
The first thing you need to do is click here and fill in the fields on the right: enter your name, email, and set a password.
Now check your email inbox: you should have received an email from eToro, click on “Verify my email” and your account will be verified.
Once on eToro, you just have to click on “Deposit funds”, in the page menu.
There, you can choose how much money you want to add to your account (the minimum is $ 200) and the payment method:
As you can see in the image, the first deposit can be made by credit card, PayPal, or bank transfer.
If you have a choice, we do not recommend bank transfer because it takes longer, and it can be very frustrating to see the price of NIO rising while you wait for your transfer to be done.
How to make your first trade
As soon as eToro has confirmed the receipt of your credit, you just have to search for “NIO” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.
*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Is NIO a buy?
NIO is a company founded in China by entrepreneur William Li in 2014 that manufactures and markets high-end electric vehicles. At the time of its launch, this company caught the attention of other large companies that decided to invest in NIO and back it. Among them we can mention Lenovo, Tencent, and large investors such as Sequoia Capital.
Since its founding, NIO has grown so much that it currently has offices in Germany, the United States and the United Kingdom. But one of the most remarkable events was the IPO of its shares on the New York Stock Exchange in 2018, where the value of its shares has revalued up to 500%.
This company seeks to lead the way in the transition from internal combustion vehicles to electric vehicles, thus declaring war on Tesla. This has caused the existence of NIO to be framed within the confrontation between the United States and China.
But it should be clarified that NIO is not the only Chinese company producing electric vehicles. And although its goal is to produce intelligent electric vehicles and autonomous driving, it also has ideas that completely differentiate it from Tesla and the other companies competing in this sector.
What makes NIO stand out from its competitors?
NIO offers high-performance electric vehicles that have a range of more than 600 km. But this is something we can find in other electric vehicles from the Tesla brand.
What does set NIO apart is its charging systems, as the charge can be brought to wherever the vehicle is located. It does this with a van that is capable of providing charging for a range of 100km to two vehicles, and can also recharge Tesla vehicles. So, if a Tesla user does not have a Supercharger nearby, they can call NIO.
In addition, a recharging system that completely sets it apart from the rest is battery swapping. NIO has battery recharging stations where the discharged battery is replaced by a fully charged battery.
All this is done automatically and controlled by robots that carry out the whole process in less than three minutes. So NIO owners really care little or nothing about charging time, thus raising the company's service to a new level.
This service works on a subscription basis that users pay monthly and gives them access to the service. With the advantage of making vehicles cheaper by more than 8 thousand dollars, since users do not have to buy the battery but only subscribe to the service.
Small differences in the business model that in the future could tilt the balance towards NIO's side, making it a company that should always be taken into account.
How do Contracts for Difference work?
It is possible that you have seen the term CFD repeatedly if you entered eToro before. We will come back to it, but first, you should know that CFDs on eToro are only possible when you go short.
FYI, and if you are thinking about day trading cryptocurrency or other advanced operations, later on you will also meet concepts like going short and leverage.
eToro lets you bet both “in the black” and “in red”. In a hypothetical case: you believe that the NIO will go down, so perhaps you consider that it is better to wait until it does and then go in. Nevertheless, if it really falls, it might mean extra money for you.
You can do by “going short” which consists in something like the following:
- Someone lends you, for example, 100 units of NIO, with a total value of $ 5,000 (these are completely made up figures)
- You sell the 100 units at $ 5,000
- The price is reduced, as you thought, and the unit of NIO now costs $ 30 instead of $ 50
- Again, you purchase the 100 units, but at the current value, $ 3,000
- You return the 100 units
- You save the $ 2000 difference!
Consider that it seems much more tricky than it really is: we can just say that by trading in NIO you can also earn money if you foretell it will fall.
How to use leverage in trading
In case you haven't heard about the term “leverage”, we'll describe it briefly. When trading, it's the capacity of increasing your investment without putting extra money. For example, if you start with $ 100 and you use x2 leverage, you will be investing $ 200.
Leverage, Take Profit and Stop Loss
Let's pretend that you are confident that NIO will rise, and you consider “going long. You have $ 1,000, but you actually can invest more and make more money.
You could consider requesting a credit at your bank, but you must know that all the process takes time, and by the moment you finally get the money, NIO might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Using leverage, you can obtain that amount really easily. It's like a loan, but much easier and quicker, and with the advantage that you will be getting it directly from eToro which will let you invest much more than you have on the platform. As in the image below, you will see the different options you have:
With other assets, the leverage you can use is higher. This is because cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used mainly for day trading or short-term operations. But let's see how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 are a “loan” from eToro).
- Then, turns out that NIO price does rises, as you thought, and now the price of your investment is $ 2,400 (20% more), so you decide to sell back because you want to play it safe.
- 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 and obtaining $ 400, your net profit would be 40%. That is pretty decent.
Still wondering where the catch is? The thing is, it can also play against you. If everything goes as you planned, you will earn profits in little time; but in the opposite scenario, you will also lose more really quickly.
For example: if the price falls by 10%, you do not lose $ 10, but twice that figure, which means $ 20. That is why the terms “Take Profit” and “Stop Loss” are crucial when using leverage.
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 purchased NIO shares at $ 100, you can ask eToro to close once it reaches $ 120. That way, you make sure you won't change your mind and decide to keep waiting in case it keeps going up, which could be a mistake since the price could go down again really fast.
Stop Loss is even more important, especially if you trade with leverage, since a small loss with leverage can be fatal for your wallet. Always remember to mark a Stop Loss more conservative than that suggested by eToro.
What kinds of assets can you trade in eToro?
You already know about stocks, there are more financial assets you can trade .
Commodities or raw materials
The major attraction of investing in raw materials is that their price fluctuates less than that of other financial assets. In fact, their stability is what makes most investors trade with commodities when facing market volatility or inflation. Still, the cost of commodities depends on supply and demand, so if faced with the fear of inflation, demand rises a lot, so will the price.
Keep in mind that the only intended income from the investment in raw materials will come from their further sale because these kinds of assets do not pay dividends.
There are two basic types of commodities: hard raw materials and soft raw materials. The former are precious metals (such as gold, silver, copper, and platinum), industrial metals (like iron, nickel, or aluminum), and oil; while the latter are agricultural products as cocoa, soybeans, rice, or sugar, among many others.
Exchange-Traded Funds or ETFs are a kind of passively managed fund, similar to index funds. They can be described as a merge between stocks and mutual funds. They are traded in the market like stocks, during the day. However, their advantage is that they offer more alternatives compared to stocks, and have lower fees.
Forex or currency trading is the exchange between a pair of currencies.
In case you decide to trade EUR and USD, you speculate how many dollars it will take to buy a euro, thinking that the first currency (the euro) will revalue compared to the second (the dollar), to make a profit by selling it. Let's say you entered when a euro is worth 1.10 USD and you close when it is worth 1.15: thus, that difference will be yours once you sell back.
You may be thinking that this form of trading requires investing considerable amounts, and you are not wrong, since variations are usually minimal, and if you use a lot of leverage to counter that, you will take a considerable risk. In case you are just starting in trading, it is not a good idea to begin with Forex, because it's not the safest option.
The most common currency pairs are available on eToro but take into consideration that this market functions through contract for differences, which means you will not be the owner of the real asset.
There are lots of cryptotrading methods: for example, you can buy and hold, or you can day trade (and benefit from market volatility).
In case you don't have much experience in investment, I recommend something in the middle: when you open your NIO position, place a dynamic stop loss 15-20% below the top price, and let the rest happen on its own.
This means that if, for instance, you buy a cryptocurrency at $ 10, it goes up to $ 20 and then decreases to $ 12, your position will be closed at $ 16-17 and you will obtain a pretty good profit.
I know it might sound more appealing to sell when the cost is at its maximum, right before corrections, but that is simply not possible. The above strategy is much more realistic and, well applied, it can work very well for you.
Later on, you will be able to apply more sophisticated techniques, such as going short or using leverage.
Practice account: How does it work?
Are you beginning as an investor? Using a demo account can be very helpful. You just need to set the virtual mode and you can start practicing with a “fictional” amount.
A virtual account can help you to practice and gain experience before starting to trade with real funds. When you create 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 NIO.
If your trials don't go well and you lose your funds, you can always ask eToro support to replenish $ 100k of virtual funds. Possibly on the second try you will improve a lot.
Take into account that trading is mostly about being cold-minded, and perhaps using a demo account can make you a bit impulsive. It will never be the same as risking your own money.
As you may suppose, the demo mode is kind of pointless 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 to see the outcome. Virtual accounts may be useful for trying out before trading in the short or medium-term.
We mentioned before that one of the best features of eToro is how simple it is. It isn't necessary to read a lot or have previous knowledge to start investing.
You won't have any issues with the interface if you have used any of the most common social networks, like Whatsapp or Facebook.
We will explain the registration steps and the different sections that you will see on the platform.
When you open your account, you will have to fill in your personal data, like first name, last name, address….
They will also ask you about your previous experience as an investor.
But you don't need to worry: it's not about passing an exam. It is only a way of finding out how much knowledge you have and what type of financial instruments they can suggest. For instance, if you have never invested before, they will not suggest that you invest in futures.
When you fill in all your information in your profile, you will stop seeing the “incomplete profile” message.
Let's review the different tabs of the interface.
“Set Price Alerts” allows you to put alerts on the price of certain securities. You just have to click on the three points at the end of the line and you will be able to program a price alarm. This is very helpful when you want to buy an asset which price is decreasing, but perhaps you think that it will decrease even more.
The section “News Feed” allows users to interact and learn from each other by sharing their opinion and experiences.
“Instruments”, “People” and “CopyPortfolios” are within “Discover”. And we discussed previously in this guide the kinds of assets on eToro:
- Exchange-Traded Funds
- Index funds
In “People” are all the profiles and historical performances of other investors, and you can replicate their strategies with just one click. This is where the “social trading” term is best applied.
You can search and find users according to your interests. You can apply filters like country, average profits, or financial market. When you select an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, in proportion. For instance, if you have $ 1000 and the user puts 20% of their funds in an asset, the platform will also invest 20% of your money in the same asset, in this case, $ 200.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
The benefit of copying to CopyPortfolios instead of people is that this way you will diversify the risk. There are all kinds of portfolios that you can find easily and are divided by sectors. So, if you suspect a specific sector, such as fashion or drones, will prosper in the future, you should look for that specific portfolio.
“Social trading”, an innovative concept
The first platform that conceived trading as a social activity was eToro, and the idea became successful really quick. Other brokers have also adopted this concept, but eToro is way better.
But it wasn't just about creating yet another social network to talk about investment. The real achievement was in allowing users to replicate the moves of advanced investors, who were in turn paid for their ideas.
It is not complicated at all. When you enter eToro you will find in the left menu the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are kinds of ETF or thematic index funds, a portfolio that bundles a number of assets in a certain sector. For example, if you heard that the gaming industry is going to succeed shortly but you don't know which stocks to select, you just have to pick the CopyPortfolio called “InTheGame”, which includes Microsoft, Google, Tencent, NVIDIA, Logitech, Intel, AMD, Nintendo, Ubisoft, Unity…
At the time of writing this article, this CopyPortfolio has generated a 100% return in the last twelve months, and you just need to click on “Invest”, enter the amount, place the stop-loss and wait.
The other option is to directly copy users: in “Copy People” you can find eToro users who are very successful investing and whose moves you can replicate just by clicking “Copy”.
In each user profile, you will see their risk profile (the higher the risk, the more possibilities of winning more and losing more money), their performance history, and what kind of instruments they operate..
And although copying other user's strategies is very interesting, you should also make the most out of the platform's community, read what other users think, and learn from them. If you want to end up living from trading, it is a great place to absorb a lot of knowledge.
* Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Disclaimer: 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.