The Bitcoin , besides being the most popular cryptocurrency worldwide, is a financial instrument that offers the opportunity to profit due to the high volatility of its price. It is possible to freely buy and sell this cryptocurrency, but also, doing it through CFD brokers has a number of advantages :
Security: It is not necessary to acquire Bitcoins physically, nor to worry about storing them safely, …
It is possible to enter and exit the market in an agile way : Ideal to carry out short-term buying and selling operations. Just a click of the mouse.
Leverage: CFDs offer you the possibility of trading with an amount of Bitcoins greater than the capital you have in your trading account.
Low access requirements: You can open an account with eToro and start investing in Bitcoin with a minimum deposit of € 200.
You can trade both long and short : In this way, you have the opportunity to make profits with the rises (opening a long position to buy) and the falls (opening a short position to sell) in the price of Bitcoin.
Using CFDs (More information: What are CFDs? ) To invest in Bitcoin is very simple, just open an account at an online broker that offers these products (and that, among its catalog of instruments available to invest is the Bitcoin). This article is prepared as a tutorial to see the steps we have to follow to trade Bitcoin with eToro , one of the most complete online brokers that exist:
How to invest in Bitcoin with the eToro broker
eToro is a Forex and CFDs broker , with the feature that offers a social trading service . In other words, it makes available to its users an entire social network specialized in trading (in addition to the platform and tools to use it) . It combines the possibility of trading instruments manually (like any other broker) with the option to follow and copy other expert traders.
Alternatives to invest in Bitcoin through eToro :
CopyTrading: CopyTrading allows you to take advantage of the experience of other traders with knowledge and good investment strategies. Through the eToro platform you can filter those that operate with Bitcoin, select those that perform well and copy their operations.
CopyPortfolios: Its operation is similar to that of an investment fund. You have the alternative of choosing a portfolio based on a predetermined strategy. Of course, as a Bitcoins trader, you will have to choose a portfolio in which this cryptocurrency has a certain specific weight (there are portfolios focused on cryptocurrency investment).
Manual investment: In addition to the two previous alternatives, you can invest in Bitcoin manually, leaving social trading aside . Next, we explain how to trade Bitcoins in this way:
How to invest in Bitcoins with eToro manually?
These are the steps you have to take if you intend to invest in Bitcoin using the services of the eToro broker.
STEP 1 – Access to the platform
To create your account at eToro please click here .
You will access the eToro website and you must click on the “Join Now” button .
eToro has its own platform , totally online (no download required), specialized for the social trading services it offers. However, it also allows trading with Bitcoin manually.
When you open a trading account with eToro, you will establish a username and password to access the online platform of this broker. Simply by entering their website and entering the access credentials, you can enter and start trading. The initial screen looks like this.
By default, we enter the menu section called “Tracking “. As its name suggests, this section allows you to set up and maintain lists of favorite financial assets as a watchdog . It is also possible to trade directly with the listed assets.
Assuming that we do not yet have a list configured in which we can directly follow and negotiate with Bitcoins (and other related assets). The next step to achieve our purpose of investing in Bitcoin is to go to the corresponding section of the vertical menu that we see on the left side of the eToro platform.
NEW :Discover the tutorial we have prepared on the eToro broker . You will be able to discover step by step, with screenshots how the trading platform is managed , the tools available to search and copy other traders and how to open, manage and close positions manually with this online broker.
STEP 2 – Instruments Menu
Indeed, if we look at the image above, the menu created to trade with Bitcoins and any other financial asset is called “Instruments” on the eToro platform . We click on it.
Automatically opens the screen for choosing the financial instrument to operate.
Thus, we check at the top of this screen that assets are classified according to the market in which they are listed . Naturally, to locate Bitcoin, we should look for it in Cryptocurrencies.
As we can see, Bitcoin appears first on the list of cryptocurrencies that allows eToro to be traded.
STEP 3 – Analyze before investing with Bitcoin
Through the icon corresponding to the asset that we intend to trade (Bitcoin) , the trader has the possibility of:
Add it to a watch list.
Check your stock chart for technical analysis purposes.
Operate directly by pressing the “Sell” or “Buy” buttons.
It is advisable to analyze the instrument before making a purchase or sale decision . eToro provides us with an interactive stock chart if we press on the small chart seen on the icon. This is how we do it and access the Bitcoin price graph in real time .
On this graph we have the option of inserting trend lines, supports, resistances, indicators and other elements of the technical analysis that help us to make investment decisions.
In addition, at the top we can see how it is possible to trade with Bitcoins directly from the price chart , on the buttons marked as “C” (Buy) or “V” (Sale) . The listing price (both for the purchase of Bitcoins and for their sale) appears next to us. The difference between both prices is the spread that the broker charges us.
STEP 4 – Open Bitcoin trading position
We have several ways to open a position with Bitcoins in eToro :
From the corresponding icon: It is the primary option, it is about searching for the financial asset in the “Instruments” menu and carrying out the operation through the corresponding purchase or sale buttons.
From the stock chart: directly, after performing a technical analysis. This option is useful for operations that require agility in decision making and order execution (usually very short-term trading).
From the watchlist: If we frequently develop a Bitcoin trading, it would be wise to include it in a watchlist, along with other cryptocurrencies and some assets with which it is correlated (for example, gold, major currency pairs, etc.) . In this way we can have a complete follow-up and make better investment decisions.
To open a long position (buy and then close the deal trying to sell at a higher price) you must press Buy . The reverse operation, called a short position , is performed by pressing Sell (it is about selling the instrument to try to buy it back later at a lower price, in this way you can also take advantage of the price drops of Bitcoin).
Once pressed on any of the buy or sell buttons, the platform will open the dialog box regarding the configuration of our trading position :
The table shows us all the information necessary to launch the purchase or sale order to the broker . The parameters that you have to configure are the following:
It is the volume of the position , that is, the money to invest, but taking into account the leverage (More info about leverage ). That is, it is the amount of the actual investment in the market.
By the way, in the previous image we see that the default leverage is X1. That is, we do not use any leverage (we will discuss this later).
Below (in red letters) appears the cash that we will have to deposit as a margin of guarantee to open a position with a certain volume. It is the leverage that relates the amount of the operation and the margin of guarantee to deposit (the more leverage, you will need less margin).
You have the possibility to choose the amount based on the amount of money or the number of Bitcoins (or fractions) you want to invest.
Example of a trading position with a volume representing a fraction of 0.03 Bitcoins
– Stop Loss
One of the most important orders (if not the most important) when opening a trading position is the stop loss.
The stop loss is a stop of losses , an insurance against the violent fluctuations against us that threaten the capital that we have to trade with Bitcoin . The order is to set a price , at which the transaction will be closed, thus cutting losses. If, for whatever reason, the market turns against us, before losing a significant amount of capital, it is convenient to activate this order and the operation will be closed automatically assuming controlled losses .
It is possible to configure this order based on a maximum amount that you are willing to lose or set a price at which it will be executed.
Among the options to configure our Bitcoin trading position is the possibility of choosing financial leverage .
Normally, online brokers offer a level of leverage (a multiple of the money that we must deposit as collateral to open a trading position). However, brokers that are based in Europe and are regulated by EU law have maximum leverage restricted .
For Bitcoin, as well as for the rest of cryptocurrencies, it is currently possible to leverage the position up to 2: 1 with eToro, since it is under European regulations. This means that, to open a trading position, the operator must leave as guarantee 50% of the actual volume of the position (multiplied by two).
However, eToro allows the option to trade Bitcoins with a leverage of 2: 1 (the maximum allowed in Europe) or 1: 1; that is, without leverage .
Depending on the level of capital you have and the strategy to follow in investing with Bitcoins, you can choose between one or the other option.
– Take Profit
The take profit order is similar to the stop loss order , with the particularity that a profit cap is established for the trader and not a loss. When the Bitcoin price reaches the established price (or the configured profit amount is achieved) the operation will be closed taking profits .
This order is established to determine a profit target of the trading position , avoiding a subsequent turn of the market that causes the reduction (and even evaporation) of the same.
Like the stop loss order, it is optional . It is possible to configure it by setting a specific price or a specific amount of benefits.
– Confirm the execution of the operation
After finishing preparing our Bitcoin trading operation , all we have to do is click on the bottom button “Execute Transaction” and the position will remain open (one of the advantages of CFDs is the liquidity they provide, it is possible to enter and exit the market with great agility).
STEP 5 – Tracking the trading position in Bitcoins
To view and edit the open positions on the eToro trading platform, simply access the “Portfolio” menu on the left.
We check how the trading operation on Bitcoins that we have carried out as an example appears as active. If we press on the bar of the financial instrument, we are shown more detailed information about the various orders that we have open (a priori the global position on each financial instrument appears, which may be made up of various purchase or sale orders).
On this screen you can see :
The type of order (purchase or sale), as well as the date and time it was carried out.
The monetary amount of the real investment (taking into account the leverage) of each active order.
The contractual units (units or fractions of Bitcoins) that represent the volume of the position.
The opening price of the operation and the price in real time.
The price at which the stop loss and take profit order was configured.
By pressing the button with the image of a cogwheel (which usually represents the configure command), you can edit the open trading order on Bitcoin. This is the box shown to modify an operation
The only parameters that can be modified are the stop loss and take profit order , placing them at different prices; either by increasing or decreasing the respective amounts of the loss limit and profit cap.
Then, by clicking on the “Update” button , the modification will be executed.
STEP 6 – Close the trading position with Bitcoins
To close, totally or partially , each of the trading orders, taking profits or cutting possible losses manually (before the respective stop loss and take profit orders jump), simply press on the X that appears at the end of each order on the Portfolio screen (right next to the configure button, with the image of the cogwheel).
When you press on this command, you will see how the dialog box for the position closure opens .
At this point, the trader can press the bottom button to execute the trade . In this way it ends with the operation of trading with Bitcoins completely .
However, you also have the option to close a portion of the position’s volume . To do this, you must select the option that appears in the dialog box, and then configure the effective volume you want to close .
As we have seen along these lines, managing with the eToro trading platform to trade with Bitcoins is easy . Its interface is quite intuitive and its functionality is correct. With a few clicks we can carry out all our Bitcoins trading operations : analyze, follow, open position; edit and close the operation.
If you want to invest in Bitcoins with eToro, you can start with the account opening by accessing the broker’s website here: https://www.etoro.com/.
You can send us your questions or experiences through the comments section at the bottom of this page. You can also freely share this article on social networks so that you can reach other people who may be interested. Thank you
Warning: eToro is a multi-asset platform that offers investments in both stocks and cryptocurrencies, as well as in the exchange of assets through CFDs.75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford the high risk of losing your money.
Cryptocurrencies are a highly volatile unregulated investment product. There is no protection for EU investors. This content is intended for informational and educational purposes only and should not be construed as investment advice or recommendation.
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