As a new trader you may have a lot of questions regarding the choice of the trading platform – can I trust my platform, can I withdraw money, etc. In this article, we will try to answer some of the most important questions.
Can I trust my trading platform, for example eToro?
Yes, the trading platforms featured on coinisseur.com have a high standard. But you should make sure independently that the trading platform you want to use is subject to financial regulation. The information is usually stated at the bottom of the front page, or under “about”. Many brokers have addresses on Cyprus, which are not technically a problem, legally speaking. Cyprus is subject to the same laws as the rest of the EU. On Cyprus, carrying out investment services (brokerages) requires permission from the cypriot authority, Cyprus Securities and Exchange Commission (CySEC). This means that the business is subject to the general EU-based financial regulation, which ensures a degree of transparency in the financial markets and ensures a high level of investor protection, especially for private investors.
| At eToro you can trade 49 currency pairs, including several cryptocurrencies. Join eToro |
Can I be sure that I can get my money paid out?
If the brokers have permission to provide investment services in the EU, you as an investor have a higher degree of security. However, you should be aware that money withdrawal is often connected to a fee. And the amount can easily fall around 25 EUR.
Is it true that I have to submit my passport and a lot of ID papers to the trading platform?
Yes, when you register on a trading platform the same conditions apply as when you open an account with your local bank. The trading platform has to obey these rules, as they among others prevent money laundering and other criminal activity. Therefore, the trading platform has to be certain about who you are. This also applies to the address information, that as a rule should be three months old at the most.
Do I risk losing my money with brokers?
If the broker has been approved to provide investment services in the EU, the security level is quite high. Your money won’t just disappear without a reason. However, it is very important for you to look into how individual brokers handle your trades. You can invest in leveraged products, where profits and possible losses multiply in line with the given factor. If the price suddenly tanks, it can mean that you quickly lose money in your investment. Many inexperienced investors wrongly believe that the trading platforms have “taken” their money. What happens in reality is different. Beginner investors often don’t familiarise themselves with the environment and its requirements before trading. They may be too prone to risk, and even fail to set a “stoploss”. On many platforms, it is possible to lose more than your deposits. With others, it is NOT possible to lose more than your deposits. This applies to for example eToro and Markets.
| At eToro you can trade 49 currency pairs, including several cryptocurrencies. Join eToro |
You should also be aware that many platforms have an inactivity fee. If you don’t trade in a month, the fee will be subtracted from your account. The fee can vary from a few dollars to more significant amounts. A single trade will defer the fee again, but it’s up to you as a private investor to familiarise yourself with rules of the given platform.
Why does my trading platform receive negative reviews?
On some websites, people can anonymously post their opinion on anything from trading platforms to a retailer’s service. It’s quite common for trading platforms to receive negative reviews from users. The main reason being that it is actually difficult to be a daytrader. Many beginners lose their money when trying to trade very quickly on the prices of oil, gold, etc. And when they lose their money, their anger usually turns towards the trading platform. While many trading platforms offer deposit and trade BEFORE one submits their ID documentation and is approved as an investor when the investor later wishes to pay out their money he or she is often met with statutory requirements regarding identification and ID papers, which may be another source of frustration. In this process, it is important to be patient and submit the required documents. This is not because the platform wants to harass their customers. The papers are simply a legal requirement. Additionally, it is possible for the platform to be overburdened by the sudden arrival of new customers, in which case the waiting time may be longer. The best advice is to be patient.
When I trade cryptocurrencies, does it mean that I get virtual coins?
Not necessarily. If you want to own virtual coins, you need to have a wallet. A wallet can be opened on numerous exchanges, for example, Kraken or Bitfinex. Unfortunately, the majority of them are NOT subject to financial regulation, and therefore you will have to settle for much lower investor protection. For example, Bitfinex got hacked back in 2016, and 119.756 BTC were stolen. Moreover, you may find that your local banks will refuse to accept profits from an unregulated exchange.
| eToro is the world’s leading brokerage platform for social and copy trading. A 1000 different products are available on eToro, divided into 12 stock indices, 7 commodities, 53 ETFs, 49 currency pairs, including several cryptocurrencies (e.g. Bitcoin and Ethereum). Leverage of up to a 100 (leverage degree differs for some assets) is available. In our opinion, eToro is the best regulated exchange. You can join eToro here |
Instead of buying “virtual coins” it could be more flexible to simply speculate on the value of each cryptocurrency, for example, Bitcoin, Ethereum, or Ripple. It can be done with a so-called CFD contract or equivalent that reflects the price graph. This can be done on for example eToro. Your profits or losses will be the same as if you owned the coins. The advantage of a CFD trade (or similar) is the fact that you can trade on a regulated trading platform, and therefore are covered by higher investor protection. At the same time, CFD ensures that you can short your position, and typically get in and out of the market more quickly. Additionally, trading on a regulated platform means that you can also easily get your profits paid out via your local bank. With eToro you buy actual cryptocurrencies, but as no wallet is connected to you, it is similar to CFD trading, and therefore as a trader, you can enjoy the same flexibility.
