Trading on eToro – the complete beginner’s guide
eToro isn’t a trading platform that specializes solely in cryptocurrency trading. In fact, it offers a wide range of products on which you can position yourself, such as forex, traditional equities and, therefore, cryptoactives. Are you thinking of registering on this platform in order to trade on it? In the rest of this comprehensive guide, we’ll take you through the various steps you need to take to sign up, make a deposit and start investing in complete security.
All you need to know about trading
Whether it’s cryptocurrencies, stocks, Forex or anything else, trading involves buying an asset, security or token and selling it (ideally) at a higher price than the original purchase price.
When it comes to cryptocurrency trading, traders most often use both technical and fundamental analyses to ensure that the project they are positioning themselves on is viable.
These analyses enable informed decisions to be made regarding the purchase or resale of a digital asset. However, cryptocurrency trading does entail risks:
- Fluctuation: as the cryptocurrency market is rapidly evolving and unregulated, fluctuations can be quite significant in a very short space of time.
- Pishing and data theft: as the cryptocurrency market is not yet mature, attempts at theft, pishing and cyberattacks are very common.
- Loss of investments: with cryptocurrencies, it’s possible to lose… everything. Depending on your investment choices (shitcoin, scam), the way you trade (leverage), you can quickly find yourself without your funds.
It’s important for traders to carefully consider these risks and carefully manage their exposure to them. Crypto-currency trading can be risky, but it can also be an exciting and potentially profitable opportunity for those willing to take the risk, especially in such a dynamic market.
What is eToro ?
eToro is an online trading platform that allows users to trade financial assets such as currencies, commodities, indices, stocks and cryptocurrencies.
In addition to trading products, eToro also offers:
- Research and training tools to support novice traders;
- A dedicated trading application.
Founded in 2007, eToroX is now available in over 100 countries worldwide, making it one of the most popular and followed by the investment community.
Finally, the company has also launched a social trading platform, called eToroX, which enables users to follow and copy the trades of other experienced traders.
Why trade on the eToro trading platform?
eToro, while recognized as one of the world’s best trading platforms, is not necessarily the one most favored by cryptocurrency investors, as it doesn’t specialize solely in this area. In fact, it lacks certain services that can easily be found on some of its competitors.
Nevertheless, the platform is well worth a look. Here’s why:
- eToro is an accessible, user-friendly online trading platform that’s easy to use even for novice traders. Signing up is fairly quick and requires no special knowledge.
- It offers a wide range of financial assets to trade, including currencies, commodities, indices, equities and cryptocurrencies. It’s the ideal platform for investors looking to diversify their portfolio and venture beyond the boundaries of digital assets.
- eToro also offers research and training tools to help traders improve their skills and make better trading decisions. It’s the perfect place for those who want to trade and learn at the same time to develop their knowledge and skills.
- It propose a social trading platform, called eToroX, which allows users to follow and copy the trades of other experienced traders.
- Finally, eToro is a regulated and licensed company, which means it follows strict rules and regulations to protect the interests of its users. It is a secure platform that assures investors of the safety of the funds deposited on it.
That said, it’s important to note that cryptocurrency trading involves risk. So take the time to weigh up the pros and cons regarding your investment.
How do I trade on eToro?
Basically, eToro works like any other major trading platform. All you need to do is follow a series of steps to ensure that you’re ready to start trading certain stocks and tokens. Here’s a summary of the process:
- Create an account: Go to the eToro website and create your account. As with all other platforms, you’ll need to provide your email address and generate a secure password.
- Verify your identity: To comply with financial regulations, eToro will ask you to verify your identity. This usually involves uploading a copy of your ID, proof of residence or residential certificate. This is KYC (Know Your Customer).
- Deposit your funds: To start trading on eToro, you’ll need to make an initial deposit of funds. This can be done in a variety of ways. You can make a bank transfer, deposit your agent with a credit card or use electronic payment methods such as PayPal.
- Explore the platform: Take the time to familiarize yourself with the eToro platform and its features. You can do this by exploring the different markets, testing the demo account and reading training materials that are made available to you.
- Choose your trades: Once you feel comfortable with the platform, you can start selecting the trades you want to make. You can choose from a wide variety of cryptocurrencies, as well as other assets such as stocks, commodities and currencies.
- Monitor and manage your trades: It’s important to keep an eye on your trades and make adjustments if necessary. eToro provides tools to help you monitor your positions and make changes to your portfolio if required.
Let’s go into a little more detail about the process, breaking down each of the steps listed above.
Create an account on eToro
To create an account on eToro, follow these steps:
- Go to the eToro website and click on the “Sign up now” button in the top right-hand corner of the home page.
- Enter your e-mail address and create a password. To be validated, the password must meet certain length and special character criteria.
- Click on “Create an account” to continue.
- Enter your personal details, including name, date of birth and telephone number.
- Click “Continue” to proceed to the next step.
- You will also need to verify your email address by clicking on the link received. This link confirms the authenticity of your e-mail, which you can then use for future connections.
- Complete the identity verification process by uploading a copy of your issued ID, proof of residence or utility bill (water, electricity). This is KYC (Know Your Customer).
This is an extremely important process, whether you’re trading on eToro or elsewhere. It enables companies to verify the identity of their customers and assess the risks inherent in, for example, money laundering. This process has become mandatory for trading platforms. Once you’ve completed these steps, your account will be created and you can start trading on eToro.
Deposit your funds
Depositing funds is easy too! In fact, eToro offers a range of methods to suit your preferences. In just a few seconds, you can start trading.
Here’s how to deposit your funds and trade on eToro:
- Bank transfer: You can make a deposit using a bank transfer from your checking or savings account. It’s very simple and only takes a few minutes. You may, however, need to confirm the payment via your banking application.
- Electronic payment methods: eToro supports a variety of electronic payment methods, including PayPal, Skrill and Neteller.
To make a deposit, follow these steps :
- Log in to your eToro account and go to the “Deposit Funds” page.
- Select your preferred deposit method.
- Enter the amount you wish to deposit and fill in the required information.
- Review and confirm your deposit details.
- Click “Deposit” to complete the process.
It is important to note that eToro may have minimum deposit requirements and may charge fees for certain deposit methods. Be sure to check these before making a deposit.
Trading on eToro for the very first time
Again, trading on eToro is pretty easy. The process takes just a few minutes. Be sure to follow the steps below:
- Log in to your eToro account
- Search for the asset you wish to trade, using the search bar or by browsing the available markets.
- Click on the asset to access the trading page. Then click on the green “invest” button in the top right-hand corner of the page.
- Enter the details of your transaction, including the amount you wish to invest and any stop loss or take profit orders.
- Check and confirm your transaction details.
- Click on “Open transaction” to complete the process.
Caution. From the moment you open your position, you expose yourself to the risk of loss. And don’t forget to check your leverage (whether you want it or not, to avoid unpleasant surprises in the event of a setback).
The different products you can trade on eToro
eToro offers a wide range of assets you can trade, including:
- Crypto-currencies: eToro lets you trade popular crypto-currencies like Bitcoin, Ethereum, Litecoin, and more. As a reminder, the crypto-currency market is highly volatile!
- Equities: You can trade shares of individual companies listed on major stock exchanges around the world. It’s a great way to position yourself on stocks you’re particularly interested in.
- Commodities: eToro offers you the opportunity to trade commodities such as gold, silver, oil, gas and more.
- Currencies: You can trade major and minor currencies, including the US dollar, the euro and the British pound. This is the Forex (Foreign Exchange) market.
- ETFs: eToro offers a selection of exchange-traded funds (ETFs) that allow you to invest in a wide range of assets.
In addition to these asset classes, eToro also offers a variety of financial instruments, including futures, options and contracts for difference (CFDs). Be sure to carefully consider the risks and suitability of these instruments before trading. We discuss this in our full eToro review.
Follow your trading history on eToro
To view your transaction history on eToro, follow these steps:
- Log in to your eToro account and go to the “Portfolio” page.
- In the top menu, click on “History”.
- You’ll see a list of your recent transactions, including deposits, withdrawals and trades. To view the most detailed information on a particular transaction, click on the transaction in the list.
- To filter the list by transaction type, date range or asset class, use the options in the top menu.
- You can also download a copy of your transaction history by clicking on the “Export” button in the top menu and selecting the desired format. This can be useful if you need to provide proof of your transactions for tax or other purposes.
Regulating the risk of losing money through trading on eToro
Trading on eToro is easy. However, as with any other investment platform, there are risks involved, which we’ve already mentioned. But how can you limit them? Here are a few tips:
- Start with small amounts: If you’re a beginner trader, the best thing to do is to start by investing small amounts. These small investments will enable you to learn without too much risk. If you want to trade on eToro, you can also opt for the virtual platform, which lets you learn without losing anything!
- Diversify your portfolio: Although this is not investment advice, one of the most widely accepted rules when it comes to investing is never to put all your eggs in one basket. By diversifying your portfolio, you can hedge your risk of loss.
- Use stop-loss orders: a stop-loss order consists in placing a sell order that automatically passes if the token price falls. This order can be used to avoid excessive losses.
- Stay informed, do your research and get trained: trading is a science in its own right. Keep abreast of developments in the cryptocurrency market, learn about projects that interest you, do your research and train yourself along the way to gain knowledge and confidence.
- Don’t trade with money you can’t afford to lose: Crypto-currency trading carries a high level of risk, and it’s important to only trade with funds you can afford to lose.
- Learn to manage your risk: one of the keys to not losing it all at once is risk management. Make sure you stay on track, give yourself limits you never want to exceed, and don’t hesitate to pull out as soon as you sense something is wrong.