eToro, our favorite broker for purchasing Zcash from Ireland
Some of its advantages are:
- Allows to imitate investment strategies
- Allows short-trading
- It is really simple and user-friendly
- Leverage is allowed
- There are uncountable goods you can invest in
Main site: www.etoro.com/zcash
If you are thinking about buying Zcash from Ireland, eToro may be the best way to do it.
This platform is known for making “social trading” fashionable, a revolutionary form of investing in which investors can replicate the techniques of other traders who have been generating earnings for a long time.
If you are a novice user or do not have much investment experience, eToro is great for you. You can rest assured that you will be doing a smart investment move when replicating those from subjects with a long profit record. Additionally, in case you do have experience in investment, the platform pays you for sharing it with others.
Besides, the platform is so uncomplicated, ideal for a user who wants to start in the Zcash world, without ending up overwhelmed with tons of diagrams and numbers.
How do Contracts for Difference Function?
If you browsed eToro previously, you probably noticed that the acronym CFD appears repeatedly. We will come back to it, but you should know first that CFDs on eToro are only possible when you short sell or use leverage higher than x2 (although the platform does not even allow this).
We will also refer to terms such as going short and leverage, in case you are thinking about day trading cryptocurrency or more advanced practices.
Even if you don't have a positive balance, you can still bet on eToro with CFDs. For instance, you have the conviction that the Zcash will go down, so perhaps you think that the best thing to do is refrain from getting in until it actually falls. Nevertheless, if it really falls, it might mean extra money for you.
You can do 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 cost $ 5,000 at the moment (these numbers aren't real)
- You make $ 5,000 by selling the 100 units
- As you supposed, the price falls, and the unit of Zcash goes from $ 50 to $ 30
- Again, you buy the 100 units, but at the current price, $ 3,000
- You pay back the 100 units
- The $ 2000 difference is yours
Keep in mind that it sounds much more tricky than it really is: we can summarize this whole operation by saying that by trading in Zcash you can also earn money if you predict the downs.
In case you still don't know what “leverage” is, we'll describe it briefly: it is, simply, the possibility to use a higher amount than you actually have. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Let's say that you are sure that Zcash will raise its price, and you want to “go long”. You have $ 1,000, but you actually can invest more and make more money.
You could consider requesting a loan at your bank or other financial company, but it is a process that takes time, and when you receive the money, Zcash might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is like a credit, and you will only have to click a few times! eToro allows you to invest (and earn) much more than what you have on the platform. Before trading, you will see the leverage options as in the image:
Within other markets, the ability to leverage is greater. Why? Because leverage is most common in short-term operations or day trading, and cryptocurrencies tend to be a medium or long-term investment. That said, I'm going to explain better how leverage works.
If you have the $ 1,000 and choose leverage x2, your investment is 2 * $ 1,000, that is to say, $ 2,000. eToro would be “loaning” you the extra $ 1,000.
A week later turns out that Zcash rises up and now the value of your investment is 20% higher, which means, you have $ 2,400 in Zcash. But you don't want to be too greedy, so you decide, wisely, to sell back.
You will have to pay back the $ 1,000 of leverage and the net profit would be $ 400 (since the other $ 1,000 was your initial investment).
In conclusion, by investing $ 1000 you can make a profit of 40% (in the case you earn $ 400). That is pretty decent.
But there's always a drawback. If all goes as you intended and the asset increases, you will make profits. Nevertheless, if the asset decreases, you will also lose more money than you invested.
Supposing that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but $ 40, because of the leverage. Because of that, the concepts of Take Profit and Stop Loss are so important when operating with 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 bought Zcash at $ 100, you request eToro to close when it reaches $ 120. That way, you make sure you won't change your mind and decide to wait a bit longer in case it keeps rising, which could make you lose it all.
Stop Loss is even more important, especially if you trade with leverage, because a reduced loss with leverage can have a significant impact. Always remember to establish a Stop Loss lower than that suggested by eToro.
What do you know about Exchange-traded funds or ETFs? They are similar to index funds and are known for merging the benefits of stocks and mutual funds, because they can be traded at any moment in the market, but offer much more variety and considerably lower rates.
The most well-known financial assets are stocks: these are fractions in which a corporation can be shared. You can obtain a profit with the performance of third-party companies just by investing money in them. But of course, you have to know how to invest.
We could say that there are two main types of shares: those of companies that distribute their earnings among the shareholders and those that don't pay regularly. But 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 in the future 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 collect that money or you can choose to reinvest it. However, you can take advantage of compound interest, so we would suggest reinvesting in the company if you don't need the money immediately.
Consider that when investing in shares on eToro you can use leverage to “dope” your trades, but in that case, you will not receive interest as it would be a contract for difference. For long-term investments, it is not advisable to use leverage: you can end up not gaining at all, because you will not get dividends and, on top of that, you will have to pay commissions while your operation is open.
Most investors trade with raw materials because of their stability. While other assets tend to fluctuate more, commodity prices vary less and offer safety against inflation or market volatility. Nevertheless, prices do depend on supply and demand in the market, so if an economic situation provokes greater demand for a certain good, its cost will also rise.
Keep in mind that the only intended income from the investment in raw materials will come from their further sale because, unlike stocks, commodities do not pay dividends.
Raw materials are generally categorized into hard raw materials, which include precious metals as gold, silver, or copper, as well as industrial metals, and oil; and soft raw materials, which are agricultural goods, like soy, cocoa, corn, or rice, for instance.
You can operate cryptocurrencies using several methods: for example, you can buy and hold, or you can day trade using price volatility in your favor.
My suggestion for those who are starting to invest is something in the middle: placing a dynamic stop-loss (15-20% under the highest price) when you open your Zcash operation and wait for it to work.
Therefore, if for example you acquire a cryptocurrency at $ 10, it reaches $ 20 and then falls to $ 12, your operation will be closed at $ 16-17 and you will have earned a considerable profit.
It may sound more appealing to sell when the price 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.
Sooner or later, you will be ready for applying more advanced trading techniques, such as going short or using leverage.
For those who still don't have much experience in investing, a demo account can be very helpful. You just need to set the virtual mode and you can start operating with fictional funds.
This can be a great way of practicing before starting to trade with real funds. The platform will give you an amount of $ 100.000 (“fake” or virtual, of course) to begin with, and you can trade with all the different assets available on eToro, not only with Zcash.
The first attempt is not usually that good. But you can ask support to deposit back the virtual $ 100k to your account, and the second try you should do better.
Keep in mind that you should always be cautious when investing, and perhaps using a demo account can make you a bit impulsive. It is not the same to operate with your own money than with fake funds, which you can lose without a problem.
Evidently, if you intend to invest in the medium or long-term, with earnings almost guaranteed just by replicating an index, it is absurd that you waste years investing with a virtual account. On the contrary, short and medium-term investments are ideal to try out with the virtual mode.
How to use eToro
As we have mentioned before, one of the best features of eToro is its extraordinary simplicity: anyone can trade without having to read endless guides.
If you are familiar with any of the most common social networks, like Whatsapp or Facebook, you can perfectly use eToro's interface.
Let's talk about the registration process and the different sections of eToro that you should know.
First, you will have to fill in your personal data.
Additionally, you will see that they ask you some questions about your experience as an investor.
But don't worry: it's not about passing an exam. They are only measures to know how much knowledge you have and what type of assets they can recommend. For instance, if you have never invested before, they will not recommend that you invest in futures.
As soon as you are registered and have completed your profile, the “incomplete profile” bar will disappear.
Let's see what the different sections of the platform are.
In the “Set Price Alerts” tab, you have, as its name indicates, the possibility to put alarms on the price of certain assets. You only need to click on the three points at the end of the line and you will be able to program a price alert. This is very useful when you want to buy an asset that is falling, but perhaps you think that it has not finished falling yet.
In “News Feed”, investors interact and share opinions, tips, and other valuable information.
In “Discover” you will find: “Instruments”, “People” and “CopyPortfolios”. And we already discussed the different financial instruments that are available on eToro:
- Exchange-Traded Funds
- Index funds
In “People”, you can find the profiles of eToro users and their past performance. This is where “social trading” makes sense since you can replicate with just one click the strategies of your preferred investors.
In this section, you will be able to find those users that you find more interesting. When you select an investor and indicate the amount you want to invest, eToro will automatically replicate their movements, proportionally. If you have $ 1000 and the user puts 20% of their funds in an asset, eToro will also invest 20% of your money in the same company or instrument, in this case, $ 200.
You will also find the CopyPortfolios divided into three main categories: “Top Trader”, “Market” and “Partner”.
Remember that in some cases, you might prefer copying to CopyPortfolios than to particular users, since you avoid putting all your eggs in one basket. There are all kinds of portfolios that you can find easily and are classified by sectors. Thus, if you think a specific sector, such as fashion or oil, will prosper in the future, you can find that specific portfolio and do your investment.