|Recommended Broker 🇮🇪||
|🌐 Official website:||www.etoro.com *|
How to buy
If you live in Ireland, a great way to invest in Facebook shares is, without any doubt, 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 your language, accepts users from Ireland, 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.
Then check your email: you should have received an email from eToro, click on the button 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 Facebook rising while you wait for your transfer to be done.
How to make your first purchase
When eToro has confirmed the receipt of your credit, you just have to search for “Facebook” in the search bar, click on “Invest” and choose the amount in dollars you want to invest.
What does Facebook do?
Facebook, beyond the famous social network, is a company that is part of the group of the Big 5 of technology along with Alphabet (Google), Amazon, Apple and Microsoft. And in addition to the social network Facebook, with almost 3 billion users, the company owns Instagram and WhatsApp.
The social network Facebook has long remained the most used social network. And WhatsApp, Facebook Messenger and Instagram are not far behind in the ranking as they are only surpassed by YouTube, which ranks second. So, Facebook (company), there is no one to take it out of the big 5 or dethrone it as the number one social network.
All this is well known and many people invest in the company just for this. But Facebook also has other projects that are little known and that can have a great impact for the company. Among them, the most relevant surely is the cryptocurrency Libra, which became a stablecoin called Diem.
The Facebook cryptocurrency: from Libra to Diem
Initially, Facebook announced in June 2019 its intention to create a cryptocurrency that would be integrated into its products (Facebook, Facebook Messenger, Instagram and WhatsApp). This with the intention that users could have a secure and very cheap form of payment in their accounts. This is how Libra was born.
However, this announcement alarmed many countries because as we know, cryptocurrencies are decentralized and cannot be regulated by governments. So many were directly and openly against the company's initiative. Mainly because of the fear that the cryptocurrency would destabilize economies given the number of Facebook users.
After complying with many legal requirements demanded by some countries (including the United States) in which basically mechanisms were agreed to avoid destabilizing the economy and that the State can maintain control of fiscal and monetary policy, Facebook can bring its cryptocurrency to the market, only now it is called Diem.
In addition to the change from Pound to Diem, it is now a stablecoin backed entirely by circulating money. Its value, unlike other stablecoins such as Tether, does not fluctuate and always maintains a 1 to 1 relationship with the reference currency. And we say reference currency because it not only represents the dollar, but also the euro and the pound sterling, among others.
The best thing is that in addition to being Diem a stablecoin, it is backed by the company Facebook and many others among which Coinbase, Uber, Shopify and Spotify stand out. Undoubtedly, this is one of Facebook's greatest successes as a company and will undoubtedly have positive repercussions on its valuation.
About Contracts for Difference
You probably have found the term CFD repeatedly if you already accessed eToro. Before we explain what this is, we must say that cryptocurrency trading on eToro is only CFD if you are short-selling.
For the record, and in case you want to try at some point day trading cryptocurrency or other trading operations, later on you will also find concepts such as going short and leverage.
The good thing about eToro is that it allows you not only to bet “in the black”, but with CFDs you can also bet “in negative”. For example: you are sure that the Facebook will go down, so perhaps it is obvious to think “if it is going to depreciate (go down in price), I'll simply wait until it does and then I'll bet”. Nevertheless, if you are convinced that it is going down, why not making some profits?
You can do that by “going short”. Basically, this is how it works:
- You get from a loan 100 units of Facebook, with a total price of $ 5,000 (these numbers are totally made up)
- You sell the 100 units and earn $ 5,000
- The Facebook goes from $ 50 to $ 30 (as you presumed, the price decreases)
- Again, you purchase the 100 units, but at the current value, $ 3,000
- You return the 100 units
- The $ 2000 difference is yours
It all seems more complex than it really is. Just know that by trading in Facebook on eToro, with CFDs you can make a profit if you anticipate downs in the price.
Futures Vs CFD
If you want to know, next you have some major differences between CFDs and Futures:
- Which are the counterparties? In the case of Futures, the counterparty is another investor. In CDFs, it’s the brokerage, in this case eToro
- Expiration date Futures have a determined expirationdate, while CFDs don’t have expiration date
- Variety: The market for Futures is narrower. With CFDs you can trade in several different markets.
- Minimum deposit: Being higher figures, Futures require, proportionally, lower fees. Costs for CFDs are a bit higher, although not too much.
- Is it possible to leverage? with Futures, it isn’t possible; while with CFDs it is.
How to deposit funds into your eToro account
When it comes to depositing funds on eToro, there is not much to say, since it is pretty simple. You only need to select “Deposit funds”, put an amount, and choose your payment method. You can use PayPal, bank transfer, credit card, Skrill, or Neteller.
Remember that for security reasons, you need to be the holder of the account or the credit card.
The lowest amount you can deposit is $ 200, and there is a maximum allowed if you are not verified. Therefore, if you want to trade with higher amounts, contact Support previously to verify your account.
Additionally, remember that you can make the transfer in any currency because eToro converts it to USD, although it charges a fee, so it is preferable to make the transfer directly in USD.
We said before that eToro is very easy to manage. Anyone can start using it without previous knowledge or long explanations.
If you are familiar with any of the most popular social networks today, you can perfectly use eToro's interface.
We will explain the registration process and the different tabs that you will find.
You will have to provide some personal data (like full name or address, for instance) when registering.
Also, you will have to answer some questions about your experience at investing.
However, it is not like you are answering a test. They only intend to know how much knowledge you have and what type of financial instruments they can suggest. For example, if it is your first experience in the investment world, they will not suggest that you invest in futures.
Let's get to know the fundamental sections of the page.
In the “Set Price Alerts” tab, you have, as its name says, the option to put alarms on the price of certain assets. It is a very useful tool for when you are after an asset which price is decreasing, but perhaps you think that it has not finished falling yet.
“News Feed” is for social purposes. This is the section where users can share opinions and learn from each other.
In “Discover” you will find the investment tabs: “Instruments”, “People” and “CopyPortfolios”. And we already discussed the different financial instruments that are available on eToro:
- Raw materials
- Forex trading
- Index funds
In “People” are all the profiles and historical performances of other users, and you can replicate their strategies with just one click. This is where the “social trading” concept is best applied.
Using the search bar, you can find the investors that best suit your interests: by risk level, types of instruments, average earnings… Just indicate the amount you want to invest and eToro itself will replicate the movements made by 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 funds (that is, $ 100) in that same asset.
Also, here you will see CopyPortfolios classified into: Top Trader, Market, and Partner.
Remember that in some cases, you might prefer copying to CopyPortfolios than to individuals, since the former offer more diversity. Besides, the different portfolios are easily identifiable: one about gaming, another about large drone companies, another about pharmacy … Do you suspect that a certain sector will prosper in the future? Then look, because surely there is a CopyPortfolio about it.
Have you heard about “social trading”?
eToro was the first platform that proposed social trading, and this new concept became very successful. Many other brokers copied this idea, but eToro is still the best.
But it wasn't just about creating yet another social network to talk about investment. The main innovation was in the possibility for users to replicate the moves of experienced traders, who were in turn paid for their ideas.
It is not complicated at all. When you access eToro you will find in the left menu the options “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” are types of ETF or thematic index funds, a portfolio that includes several assets of the same sector. Let's say that you consider that the gaming sector is going to succeed soon but you don't have enough information (or time) to choose stocks, you just have to invest in the CopyPortfolio called “InTheGame”, which includes Google, Microsoft, NVIDIA, Nintendo, Logitech, among others.
At the date of writing this text, this CopyPortfolio has generated a 100% return in the last twelve months, and you just need to click on “Invest”, select the amount, place the stop-loss and wait.
But you can also copy other users of the platform who are successful investors. With “Copy People” you can find them and replicate their strategies easily.
In each user profile, you will be able to see their risk profile (how much risk do they take when trading), their performance, and the kind of assets they operate..
Besides copying other investor's strategies, which is really interesting and helpful, we also recommend that you make the most out of the community by reading other user's remarks. You can learn a lot from their experiences and knowledge, particularly if you aim to make a living from investments.
There are lots of cryptotrading methods: from purchasing and waiting to day trading using volatility of the market in your favor.
If you are just beginning in the world of investment, our recommendation is a middle point: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work its magic.
For instance, if you buy a cryptocurrency when it is worth $ 15, it increases to $ 25 and decreases again to $17, the stop-loss will close your position at $ 21 or $ 22. Hence, you will obtain a fine profit.
It might sound more appealing to sell when the price is at its maximum, but that is simply not possible. The above strategy is much more realistic and it can give great results.
Later on, you will be able to apply more sophisticated techniques, like using leverage or going short to make money from bear markets.
Leverage: maximizing profits
Are you familiar with the term “leverage”? Just in case, we'll define it briefly: the good thing about trading is that it allows you to invest more money than what you really have. That is, if you get in with $ 100 and you put them with x2 leverage, you will be really investing $ 200.
Leverage and the importance of “Take Profit” and “Stop Loss”
Assuming that, for instance, you are sure that Facebook price is going up, and that you have $ 1,000 for “going long”, you should know that you can increase your investment and make more money.
There's the possibility of requesting a credit at your bank, but it is a process that takes time, and by the moment you finally get the money, Facebook might be already at a much higher price, so you wouldn't be able to invest the way you planned.
Leverage is just like a credit, but it is only a few clicks away! eToro allows you to operate with much more money than what you have on the platform's wallet. It is very simple, before investing you will see the different options as in the image below:
Within other markets, you can use more leverage. Why? Because leverage is most common in short-term operations, and cryptocurrencies tend to be a medium or long-term investment. That said, I'm going to explain better how leverage works:
- If you decide to invest $ 1,000 and you use leverage x2, you will be starting with $ 2,000 ($ 1,000 was “borrowed” from eToro).
- Then, turns out that Facebook price does rises, as you thought, and now the cost of your investment is $ 2,400 (20% more), 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.
By starting with $ 1000 and getting $ 400, you'll be earning 40% of your investment. That is pretty good.
But there's always a downside. If everything goes ok and the asset increases, you will make money. Nevertheless, if the price falls, you will also lose more money in the blink of an eye.
Let's imagine that the asset didn't increase by 20%, but it went down also by 20%, you won't lose $ 20 but double, $ 40. That is why to operate with leverage it is fundamental to know about Take Profit and Stop Loss.
Take Profit is the automatic sell order that is above the entry price: you buy Facebook shares at $ 100 and you ask eToro to automatically close your position as soon as the price goes up to $ 120. It is very useful to avoid being blinded by greed: we would all take a 20% profit when making the investment, but when you reach that 20% it is easy to ask yourself “what if this keeps increasing and I can earn even more?”. It's like you made sure now of not acting recklessly in the near future.
Stop Loss is even more important, mostly when trading with leverage, since a small loss could be fatal for your wallet. You always need to establish a Stop Loss lower than that suggested by eToro.
Demo account: How does it work?
If you do not have much experience as an investor, the option to operate in “demo” mode may be useful. Setting a virtual account and operating with fictional funds is very easy.
A virtual portfolio can be a good way of gaining confidence before starting to trade with real money. When you create your demo account, you will begin with a virtual balance of $ 100.000, to operate with a variety of assets available on the platform (not just with Facebook).
If your trials don't go as planned and you go back to zero, there is always a possibility to replenish your virtual balance. The second try will always be better.
Keep in mind that investing is mainly about being cautious, and using a virtual portfolio might have the opposite effect. It will never be the same as risking your own money.
Finally, if you want to invest in the medium or long-term, with profits almost guaranteed only by replicating an index, it doesn't make sense that you invest in the virtual mode and wait for years. On the contrary, short and medium-term operations are perfect to try out with the demo mode.
* 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.