eToro, an advisable online trading platform for those who are in New Zealand and want to obtain Gram
- User-friendly and straightforward
- You are able to imitate investment strategies
- Admits short-trading
- Leverage is allowed
- There are uncountable possibilities for investments
Main site: www.etoro.com/gram
In case you are thinking about purchasing Gram from New Zealand, eToro may be the best option currently.
“Social trading”, a relatively new investment method that consists in replicating techniques and strategies from other experienced investors, has become popular thanks to eToro.
If you are still a rookie or haven't gained much experience in investments, eToro is very useful. You can rest assured that you will be making a smart investment since the site emulates those from subjects with a long profit record. On the other hand, if you are an expert in the field and want to share your methods with the community, eToro pays up for it.
It is also very convenient how easy is the interface of this platform, perfect for beginners who are taking their first steps with Gram.
Have you heard about Exchange-traded funds? They are passively managed funds, known for combining the benefits of stocks and mutual funds: they can be exchanged at any moment in the market, but have much more investment possibilities and considerably lower rates.
Stocks are the most common securities. Some companies divide their capital into portions and have several shareholders. By investing money in them, you can own a portion of a company and obtain dividends.
We could say that there are two basic kinds of shares: the ones that divide their earnings regularly among the shareholders, and those that don't. The former ones are great, of course, but investing in the latter can be a good idea too since sometimes you can make even more money by selling the shares.
If you invest in equities 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. Nevertheless, you can take advantage of compound interest, so our suggestion is that you reinvest.
Remember that when investing in shares on eToro you can “dope” your trades with leverage, but in that case, you will not receive interest as it would be a contract for difference. For that reason, for long-term investments, it is not advisable to use leverage: not just because you lose dividends, but you will also have to pay fees while the operation is open, and these can end up with your profit.
What are ETFs?
Exchange-Traded Funds or ETFs are similar to index funds. We can say that ETFs are somewhere between stocks and funds: they can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
The major attraction of trading with raw materials is that their price varies less than that of other financial products. In fact, their security is what makes people often invest in raw materials, to take refuge from 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.
Note that the only intended profit from the investment in raw materials will be the hypothetical capital gain after the sale since, unlike stocks, these do not distribute dividends or pay interest.
Raw materials are generally classified 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, for instance.
How to deposit funds into your eToro account
When it comes to depositing money on eToro, there isn't really much to say, since it is pretty simple. You only need to select “Deposit funds”, type an amount, and choose the payment option you prefer. You can pay with PayPal, bank transfer, credit card (Visa, MasterCard, Diners, Visa Electron and Maestro), Skrill, or Neteller.
Evidently, for security policies, you should be the account or credit card holder.
You can start with a $ 200 deposit, and there is a limited maximum for unverified accounts. So, if you intend to trade with large amounts, you will need to verify your account previously.
The platform accepts deposits in any currency, but charges a fee for making the conversion to USD. That is why we suggest, if it is in your hands, depositing in USD from the beginning.
How are CFDs and futures different?
How are Futures and CFDs different?
- Futures: the counterparty is someone else, another investor.
- CFDs: you don't operate with someone else, but the counterparty is the brokerage, in this case, eToro.
- Expiration date:
- Futures: there is an expiration date. Once the contract expires, it is closed even if you are in red.
- CFDs: there is no expiration date. It is possible to get back to a good position before exiting.
- Trading options:
- Futures: there are limited options for investment
- CFDs: a lot of variety, there is a wide diversity of CFDs
- Minimum deposit amount or “trade size”:
- Futures: you need to start with a larger amount
- CFDs: you can get in with a small initial amount
- Trading costs:
- Futures: being higher figures, the costs are usually proportionally lower
- CFDs: higher (although not too much)
- Futures: you can't leverage
- CFDs: completely available
What are Contracts for Difference?
You probably have seen the initials CFD repeatedly if you already registered on eToro. Before we come back to it, you should know that CFDs on eToro are only possible if you short sell or use leverage over x2 (but the platform does not even allow this).
In case you want to try at some point day trading cryptocurrency and other more advanced operations, you will also find concepts like short-selling and leverage.
With CFDs you can operate on the platform even if you are not “in the black” or having a negative balance. In a hypothetical case: you have the conviction that the Gram will go down, so probably you consider that it is better to refrain from getting in until it does. However, if it actually falls, you can make some profits out of that.
You can accomplish that by “going short”. Basically, it functions like this:
- Someone lends you, for example, 100 units of Gram, valued at a total of $ 5,000 (these are completely imaginary figures)
- You make $ 5,000 by selling the 100 units
- As you presumed, the price falls, and the unit of Gram now costs $ 30 instead of $ 50
- You purchase all 100 units one more time, but at the current value, $ 3,000
- You pay back the 100 units to the person that loaned them to you
- The rest is yours, so, you will have made $ 2000
It all seems more complicated than it really is. Just consider that by trading in Gram on eToro, with CFDs you can make a profit if you foretell downs in the price.
As we have mentioned among the positive aspects of eToro, the best thing about this platform is its extraordinary simplicity: anyone can trade without having to read endless guides.
If you have used any of the most common social networks, like Twitter or Linkedin, you can perfectly manage eToro's interface.
We will explain the registration process and the different sections that you will find.
First, you will have to fill in all the information that eToro asks for: first and last name, address…
To complete your profile, you will have to answer some questions about your experience as an investor.
But don't feel like you are taking an exam. They only intend to find out how much you know and which assets to recommend for you.
You will see a bar that says “incomplete profile” until you complete all the requested information.
Now we will explain 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. Just click the tab and you will be able to set it. This is helpful if you want to purchase a security that is falling but you believe it will decrease even more.
“News Feed” is the more “social” section. There, traders can interact and share experiences.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. As we mentioned previously, the different financial assets that eToro offers are:
- Raw materials
- Forex trading
- Index funds
The concept “social trading” makes sense in the section “People”: there, you can copy the strategies of any user you choose.
Using the search box, you can find the investors that best suit your interests: by average profits, types of instruments or risk level, for example. You just have to type the amount you want to invest and eToro will replicate the movements made by the investor you chose, in proportion. “In proportion” means that if you have $ 1000 and the trader puts 10% of his or her balance in an asset, eToro will invest also 10% of your money (that is, $ 100) in that same asset.
In this section you will also see the three main types of CopyPortfolios, which are Top Trader, Market, and Partner.
Sometimes you might prefer copying to CopyPortfolios than to other traders, because the former offer more diversity. There are all kinds of portfolios that you can recognize easily and are classified by sectors. Therefore, if you suspect a specific industry, such as gaming or oil, has good chances to succeed, you can look for that specific portfolio and invest.
When trading cryptocurrencies, there are different possible methods or strategies, such as buying and holding or day trading (and using market fluctuation to your advantage), for naming just a few.
If you are new in the world of investment, my recommendation is something in between: placing a dynamic stop-loss (15-20% under the highest price) and wait for it to work on its own.
Therefore, if for example you buy a cryptocurrency at $ 10, it reaches $ 20, and after that it falls to $ 12, your position will be closed at $ 16-17 and you will make a pretty good profit.
Perhaps you are wondering: why not selling when the cost is at its highest? But unless you are a psychic, that is just impossible. The mentioned strategy can work perfectly and give good results.
Later on, you will be able to apply more sophisticated strategies, like short-selling or using leverage.
How does a virtual account work?
If you are beginning as an investor, the option to operate in “demo” mode will be useful. Setting a virtual account and trading with fictional funds is very easy.
This tool is great for those who are new to this world and want to give it a few tries before trading with real funds. When you open your account, you will start with $ 100,000 of virtual balance to do your operations, not only with Gram, but you can also create a diverse portfolio.
If your performance is not that good and your balance ends at zero, there is always a possibility to replenish your virtual funds. You'll probably do better on the second attempt.
However, keep in mind that you need to be prudent for trading, and using a demo account can have the reverse effect. It is not the same to risk your own money than to trade with virtual funds that you don't mind losing.
As you may suppose, if you are interested in trading in the long or medium-term, it makes no sense that you try the virtual mode and waste years waiting to see the results. But it can be very useful if you want to practice short and medium-term trading.