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How to buy
For those who live in Philippines, a great way to invest in Facebook shares is, definitely, this popular broker.
eToro*, one of the main brokers around the world, is registered and licensed, among others, by the Cyprus Securities and Exchange Commission, and therefore complies with all the regulations of the European Union, the most demanding in the world.
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 Philippines, 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 inbox: you 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 trade
As soon as 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.
*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.
Facebook business explained
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.
- You can copy trading tactics
- Admits short-trading
- It's very user-friendly
- Leverage is allowed
- There are tons of investment options
Go to the official website in English: www.etoro.com *
In case you are considering acquiring Facebook shares from Philippines, eToro is certainly the best option.
“Social trading”, an innovative investment method that consists in replicating techniques and moves from other experienced investors, has become popular because of eToro.
If you are a novice user or haven't gained much experience in investments, eToro is very useful. You can rest assured that you will be doing a smart investment move when replicating those from subjects with a great deal of expertise. On the contrary, if you are an expert in the subject willing to share your abilities with the community, eToro pays up for it.
Another thing to mention is how intuitive the platform is, which turns out perfect for new users that are just learning all about the trading world.
These are the financial assets you can trade in eToro
We already know about stocks, there are other financial instruments you can trade in this broker.
ETFs or Exchange-Traded Funds are similar to index funds. They can be described as a merge between stocks and mutual funds. They can be traded like regular stocks, but include a wide diversity of assets and have lower fees.
Index funds are most adequate for those interested in long-term trading, mostly for beginners. If you don't need to take back your money in less than five or ten years, index funds are a safe option.
Contrary to common perception, it is very hard to beat the market (yes, you have surely heard of investors who obtain huge profits).
But except for Warren Buffett and a couple more, not everything is as good as it sounds: when someone brags about having beaten the market, they have probably done so for a short period, or the rates are so high that it ends up being better for you to index (whit minimal commissions). Besides, take into account that if something happened in the past it doesn't necessarily represent a regular behavior.
The great advantage of index funds is that they perfectly solve these two issues: their fees are insignificant and in the long term they almost always beat active managers.
Most people invest in raw materials because of their stability. While other assets present higher fluctuation, raw materials prices vary less and offer security against inflation or market volatility. Nevertheless, prices are subject to supply and demand in the market, so if the fear of possible inflation provokes higher demand for a certain good, the price will also rise.
Note that commodities don't pay dividends. Thus, the only prospective earnings would come from a sale of the asset.
Commodities can be classified into two main types: hard raw materials and soft raw materials. The former include precious metals (such as gold, silver, copper, and platinum), industrial metals, and oil; while the latter are agricultural goods, such as sugar, coffee, corn, soy.
eToro payment methods
Among the payment options available on eToro are: bank transfer, PayPal, credit card, Neteller, and Skrill. Making a deposit with eToro is so simple: click “Deposit funds”, choose an amount and the payment method you prefer.
Of course, take into consideration that for security policies, you need to be the owner of the account or the credit card.
The minimum amount you can deposit is $ 200 and there is a limit of how much you can deposit if you are not verified. Therefore, in case you want to trade with higher amounts, contact Support beforehand to verify your account.
eToro accepts deposits in any currency, but you will have to pay a fee for the conversion to USD. So it is better to use USD from the beginning.
How to use eToro
We mentioned previously that eToro is very easy to manage. Anyone can start investing without having to read endless explanations.
You won't have any issues with the interface if you are familiar with any of the most common social networks.
We will talk about the registration process and the different tabs you will find on the page.
When you open your account, you will have to enter your personal data, like first name, last name or address.
Also, you will see that they ask you some questions about your experience at investing.
But don't feel intimidated, there is no right or wrong answer. They only intend to find out how much you know and which instruments to recommend for you.
As soon as you are registered and have completed your profile, the “incomplete profile” bar will disappear.
Next, we will talk about the different sections of the interface.
“Set Price Alerts” allows you to set alerts on the price of certain securities. It is a very useful tool for when you want to purchase a security 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.
“Discover” includes the tabs “Instruments”, “People” and “CopyPortfolios”. And we discussed previously in this guide the different financial instruments on eToro:
- Exchange-Traded Funds
- Raw materials
- Forex trading
- Index funds
The term “social trading” makes sense in the section “People”: that is where you can replicate the movements of any user you choose with just one click.
In this section, you can find those traders that you find more interesting. You can search by risk level, financial instruments, or average profits, among other filters. When you select an investor and indicate how much money you want to invest, eToro will automatically replicate their movements, proportionally. For instance, if you have $ 1000 and the user puts 20% of their funds in an asset, the platform will invest $ 200 of your funds in the same asset as well.
You will also see the three main types of CopyPortfolios, which are classified into “Top Trader”, “Market” and “Partner”.
Sometimes it might be better to copy from CopyPortfolios than to particular users, since 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 sector, such as gaming or healthcare, has a good chance of prospering, you should probably look for that specific portfolio.
What is social trading?
eToro was the first platform that proposed social trading, and this new concept became very successful. Lots of 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 achievement was in the possibility for users to replicate the moves of experienced traders, and to reward the latter for their ideas and knowledge.
In the left menu of the site, you will see “Copy People” and “Invest in CopyPortfolios”.
“CopyPortfolios” contain a collection of assets of the same sector. For instance, if you anticipate that a particular sector will succeed in the near future but you are not sure which investments to make, you just have to choose a portfolio that includes a variety of related companies in that industry.
You should know that in the last twelve months, CopyPortfolio has given returns of 100%. And you can benefit from it just by choosing a portfolio, enter your selected amount, place the stop-loss order and click on “Invest”.
The other alternative is to directly copy users of the platform: in “Copy People” you can find eToro users who are very successful investing and whose strategies you can duplicate.
You will see in the profile of users: the type of financial instruments they operate with (forex, cryptocurrencies, raw materials, stocks…), their risk profile (a higher risk implies higher possibilities of earning more or losing more money), as well as their performance history.
Replicating other people's investments can be very interesting and useful, but it is also a good idea to take advantage of the community to read other users and learn from them. If your goal is to end up living from trading, it is a good place to absorb a lot of knowledge.
There are many ways to operate cryptocurrencies: for instance, you can buy and hold, or you can day trade (and benefit from price fluctuations).
My suggestion for those who are starting to invest is going halfway between the two options: when you open your position, set a stop-loss 15-20% under the highest price, and forget about the operation.
For instance, if you purchase a cryptocurrency when it is worth $ 15, then it increases to $ 25 and falls again to $17, the stop-loss will close your position at $ 21 or $ 22. Thus, you will get a satisfactory income.
I know it might sound more appealing to sell when the price is at its maximum, right before corrections, but unless you're psychic, that will never be possible. The above method 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.
In case you still don't know what “leverage” is, we'll put it short. When trading, it's the capacity of enlarging your investment by borrowing money from the broker. For example, you can enter with $ 100, but if you leverage x2, your initial investment will be $ 200.
Leverage, Take Profit and Stop Loss
Let's pretend that you are sure that Facebook will raise its price, and you want to “go long”, but you only have $ 1,000 available. However, you have the option of investing more money and get higher profits.
Possibly, you could ask your bank for a credit, put something as a guarantee, wait for it to be accepted, wait for the money, and then purchase Facebook… But maybe once you have made all that, your prediction could've been confirmed already and Facebook price is at such a high price that it is not worth investing.
Leverage is exactly like a loan, and you will only have to click a few times to get it! You will be able to operate with much more money than what you have on the platform. As in the image below, you will see the different options you have:
Trading with other assets allows you to use more leverage. Why? Because cryptocurrencies are a value that is invested in the medium-long term. However, leverage is used especially for short-term operations or day trading. 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).
- A few days later, Facebook price does rises, as you assumed, and now the price of your investment is $ 2,400 (20% higher), so you decide to sell back.
- Once the $1,000 from leverage is deducted, you will have $ 1,400 left; which means you've earned $ 400, since the other $1,000 was yours initially.
With $ 1000 you get $ 400, in other words, 40% more. That's not bad at all.
It may sound too good to be true. The thing is, it can also play against you. If everything goes according to plan and the price goes up, you will earn profits in little time; but if the opposite occurs, you will also lose more really quickly.
For instance: if the price falls by 10%, you do not lose $ 10, but $ 20, because of the leverage. For that reason, the terms “Take Profit” and “Stop Loss” are so important when trading 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 Facebook shares at $ 100, you program eToro to close once it reaches $ 120. That way, you make sure you won't be blinded by greed and decide to keep waiting in case it keeps rising, which could make you lose it all.
Stop Loss is even more important, mostly when trading with leverage, since a small loss could have a significant impact on your wallet. Consider that eToro will recommend a limit for Stop Loss, but you should place it lower than the platform suggests.
Virtual portfolio: How does it work?
In case you do not have much experience investing, you can start by practicing with a “demo” option. Setting a virtual account and trading with fictional money is very simple.
A virtual portfolio can help you to practice and gain experience before starting to trade with real money. When you open your demo account, you will begin with a virtual balance of $ 100.000, to trade with a variety of financial instruments available on eToro (not just with Facebook).
If your trials don't go as planned and you lose your funds, you can always ask the platform to replenish $ 100k of virtual balance. You'll probably do better on the second try.
But keep in mind that trading is mostly about being cold-minded, and demo account trading can have an adverse effect. It is not the same to risk your own money than to operate with a false balance which loss does not suppose any drama.
Evidently, the demo mode is kind of absurd if you want to invest in the medium or long-term (with almost guaranteed returns only by replicating an index), since you would be wasting years. Demo accounts may be useful for trying out short or medium-term operations.
Frequently asked questions
* 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.