Robo Advisor – what is it?

Robo advisors are digital investment assistants designed to help private savers invest. In recent years, many of these programs have become established and are available to users as free help. The great advantage of Robo Advisors is their independence from product providers.

Analysis methods such as machine learning or big data

So they don’t advise you on a specific investment product, they just help you set up a strategy for your money. To do this, they use various analytical methods such as machine learning or big data and can thus make excellent estimates of where the markets will develop.

However, there are also disadvantages: For one thing, robo advisors cannot provide personal advice and therefore have to do without functions such as chat. For another, it is possible that they will make mistakes – after all, these are computer programs and not humans. Nevertheless, many private investors hope for the help of robots and already trust them in many areas of life.

Advantages of a Robo Advisor

A Robo Advisor is a type of digital asset manager that assists investors by managing their capital. By using a Robo Advisor, investors can benefit from many advantages:

No issue surcharges: Most Robo Advisors can be used free of charge and do not charge any front-end load. Thus, the investor’s capital remains largely untouched and can be invested immediately in shares, funds or other investment products.

Quick decisions: A Robo Advisor enables the investor to make decisions quickly and easily. By using clearly structured forms, the investor can easily specify his wishes and needs and immediately receives a recommendation for a suitable investment.

Individual advice: Some robo advisors also offer individual advice. This is particularly ideal for newcomers to the field of investments, as it gives them the opportunity to bring their questions directly to an expert.

Advantages at a glance: 3 aspects for your plant

Robo Advisors, the essentials for beginners.

• Robo advisors enable more efficient asset management through the automated implementation of investment decisions.
• Robo advisors offer a more transparent cost structure than traditional asset managers, allowing for more accurate cost control.
• Robo advisors, due to their technical capabilities, are able to consider a broader range of investment options and thus implement more customized investment strategies.

Disadvantages: Weighing for your facility

Robo advisors are a relatively new invention and not yet perfect. Their disadvantages are:

• The costs: Robo Advisor services can be expensive. The fees per year can amount to several hundred euros.
• The risk: As with any investment, there is some risk with Robo Advisors. However, this risk is relatively low as most Robo Advisor services offer diversified portfolios.
• Complexity: Robo advisor services are often more complex than traditional wealth management services. Therefore, it is important to inform yourself thoroughly before using them and to read the operating instructions carefully.

How does a Robo Advisor work?

A Robo Advisor is a wealth-building tool that works without human intervention. It uses machine learning and artificial intelligence to identify and manage financial products tailored to your risk tolerance and financial goals.

More than just passive investments in ETF

Robo advisors offer more than just passive investments in ETFs. They can also include stocks, bonds, derivatives and real estate investments. These options allow users to create a portfolio that meets their investment needs.

Algorithms decide instead of people

Robo advisors differ from traditional asset managers in that they are based on algorithms. This means that they make investment decisions automatically and without human intervention. This approach eliminates emotional factors in the selection of financial products. However, there are drawbacks: Robo advisors have no understanding of clients’ personal preferences or their individual needs. Therefore, you should be careful when dealing with Robo Advisors and keep an eye on your exposure.

Robo advisors can be purchased through online brokers or financial institutions. No matter which route you choose, the same applies: Always carefully review all features and costs of each product.

Remember: a Robo Advisor is an automation solution for your personal wealth management – so always make sure it’s a good fit for you!

What are the different types of robo advisors?

There are two types of Robo Advisors: active and passive. Active Robo Advisors follow an active investment strategy where asset management is constantly monitored. They select a specific portfolio of stocks, bonds and other investment products and change it regularly to achieve maximum returns. Passively oriented robo advisors follow a passive investment strategy using highly diversified ETFs (exchange-traded funds). These are not monitored or adjusted and the focus is on achieving a long-term goal.

Robo advisors also differ in the services they offer. Some focus on portfolio management, while others offer more advisory and financial planning services. Many also offer tax planning and tax preparation services to help you save more for your money.

Costs for automated asset management

Another important aspect is the cost structure of the different Robo Advisors. Since the costs affect the overall return, you should examine them carefully before choosing one. Some have a fixed fee model with annual fees per year or per trade; others charge a percentage fee based on your total assets or a combination of these models. It is therefore advisable to compare different options to find the best one for your individual needs.

Overall, using Robo Advisors offers many advantages: you can get professional advice without high costs; you can achieve your investment goals more effectively; and you can save yourself time by using automated processes. If you are looking for a reliable partner to help you invest, it is advisable to think about using Robo Advisors – especially if you are new to investing or need more support.

Conclusion: Robo Advisor – worthwhile investment in the future

A robo advisor is a digital asset management service that uses algorithms to make your investment decisions. This type of investment is a worthwhile investment for many people. Robo advisors offer a number of advantages over traditional banks and wealth managers. For example, they are able to offer you a broader range of investment options based on your risk tolerance and financial goals. In addition, Robo Advisors are typically less expensive than traditional banks and wealth managers.

If you’re not ready to entrust all of your assets to a robo advisor, you can still put some of your money in one. This is a good way to find out if this type of investment is right for you. However, if you decide to use a Robo Advisor, you should be aware that you are still taking on some risk. Therefore, before you start investing, make sure you understand the risks involved and do your research.

Compare providers now

Compare Robo Advisor providers for free now, it’s that easy:

• Robo Advisor Comparison

No investment advice or purchase recommendation

All information provided here does not constitute investment advice or a recommendation to buy. All statements are my general published opinion. I have obtained the information from my experience as a private investor. This experience report cannot and is not intended to replace personal investment advice from professionals.

Trading: Which app is useful?

All of them have been test winners in renowned compare, depending on which aspects were more or less in the focus of the test.

The A&O for trading is the quick and easy (also free of charge) deposit opening. Usually 3-5 minutes with the ID card for identification and you’re ready to go. There should be no costs for the depot, but also for trading. Tip: Place 1 + 2 are 100% free, as far as depot and trades are concerned.

In addition, of course, there is the large product selection. Starting with shares from different countries, ETFs (i.e. “bundled shares”), cryptocurrencies, commodities such as gold, oil, etc. At eToro (2nd place), you can “follow” other traders as an extra feature. This automatically copies their trades, all purchases and sales. With a look back at their investment history, an interesting tool for investors.

The most important services from experience:

• Availability via app (smartphone) and browser (notebook)
• Quick and easy deposit opening
• No account and custody fees
• Fair fixed prices
• Favorable conditions
• Large product selection (stock, ETF, crypto, commodities, etc.)

Caution. 3 simple golden trading tips

Before we get to my app recommendations and experiences, here are 3 important ground rules for beginners:

1. Don’t put all your eggs in one basket – diversifyyour investments
2. Trading only with “play money” – money that is not needed
3. “All time high” – values always rise in the long run (safe ETF and funds [like DAX or DOW), think long term

Short / medium and long term: trading differences

Here again, very, very generally set up, which types of investments take place in which time periods:

• Long-term / quiet “trading” – Tip: Buy first property
• Long / medium term trading – ETF (“bundle of shares” of one industry)
• Medium-term trading – shares
• Medium / Short Term Trading – Cryptocurrency
• Short term trading – currencies

Long term: > 1 year
Medium term: ~ 1 – 12 months
Short term: ~ 1 week – 1 month

Tip. If cryptocurrency (like BitCoin, Ethereum, etc.) is held for more than 1 year, the gains are tax-free. Otherwise, capital gains tax (25% on gains) will apply.

Trade Republic: Rank 1 / Rating 8.9 out of 10

Trade Republic is Made in Germany and one of the success models and “Unicorns” (startup worth over 1 billion) in Germany. “Despite” being located in Germany, the app for iOS and Android offers the finest trading experience, from home and on the go.

All major stock market securities can be traded in the app: Stock, ETF, Crypto, Commodities, etc. Registration and login is done in less than 5 minutes.

Trade Republic does not cost money, the app is free, account management and custody, there are also no order fees. Therefore, deservedly, according to all experience in the first place.

Advantages / Disadvantages: No fees, operated + Made in Germany

My rating for the eToro app:

8.9 / 10 *

Trade Republic Disadvantages:

• Fast online registration (with ID card)
• No order fees
• No custody fees
• Developed and operated in Germany

Trade Republic Disadvantages:

• None

Trade Republic App Download: Free

Open a Trade Republic account now:

• Trade Republic

EToro: Rank 2 / Rating 8.8 out of 10

eToro is, next to Trade Republic, my favorite app for trading on the go, in the office and at home. eToro is probably already known to many from TV commercials. As a US company, the startup naturally has much more capital than Trade Republic, for example.

After all my eToro experience, I can guarantee that the app is stable. Simple and fast registration via the app, deposit money, and you’re ready to go.

eToro has no custody fees, no account fees, no order fees. By the way, this is only the case with #1 and #2, the other apps always charge at some point. More about that in a moment!

Advantages / Disadvantages: No fees, traders copy, …

My rating for the eToro app:

8.8 / 10 *

Advantages of eToro:

• Fast online registration (with ID card)
• No order fees
• No custody fees
• Copy other traders (their trades)

Disadvantages of eToro:

• Caution: Only private people are allowed to trade (business will be terminated immediately; even in minus)

EToro App Download: Free

Open an eToro account now:

• EToro

Here are two extra guides from me, for eToro Trading:

• EToro App: Experiences
• Copy trader

Scalable Capital: Rank 3 / Rating 7.4 out of 10

Scalable Capital ‘s app runs flawlessly, almost everything can be traded, but the securities account costs 2.99 euros per month. Okay, it’s only 3 euros, but custody account fees are no longer state of the art. Therefore, in line with the 3 euros per month, only in 3rd place in the ranking and test, the app from Scalable Capital.

Advantages / Disadvantages: Custody fees, …

My rating for the Scalable Capital app:

7.4 / 10 *

Advantages of Scalable Capital:

• Fast online registration (with ID card)
• No order fees

Disadvantage of Scalable Capital:

• Deposit fees: 2.99 euros per month

Trade now with Scalable Capital:

• Scalable Capital

Flatex: Rank 4 / Rating 7.1 out of 10

Solid app, solid trading, but: What is even “worse” than custody fees of 2.99 euros per month, as in 3rd place? Order fees. Because for each trade at flatex, is paid extra. If you don’t trade in 1,000 euro or dollar increments, but with only 50 euros per trade or 100 euros per trade, you lose money that you don’t have to lose (see 1st, 2nd and maybe 3rd place).

That’s why it’s only 4th in the ranking of the best trading apps.

Advantages / Disadvantages: Order fees for stock trading, …

My rating for the eToro app:

7.1 / 10 *

Advantages of flatex:

• Fast online registration (with ID card)
• No custody fees

Disadvantages of flatex:

• Order fees

Flatex App Download: Free of charge

Open a flatex securities account now:

• Flatex

More trading knowledge for beginners

Here’s a little bonus and digression about trading with apps:

Share, ETF, Crypto & Co. – My experience

Stocks, ETF, Forex, Cryptocurrency, Social Trading – Here’s a little list of a few learnings that cost me money but are so simple you should know them! Want to buy stocks, index funds, cryptocurrency like Bitcoin or Ethereum, foreign exchange (currencies)?

• Trade and experience

Currencies – Trading with “classic” FIAT currency

Learn currency trading – How can you trade with Euro, Dollar & Co. How does currency trading (Forex/FOREX) work? ETFs are speculative, stocks are more speculative, currency trading is mostly trading in real time: Constantly stay in between financial / political / economic news and price development. For beginners, this means building understanding step by step. What is it about?

• Currency trading

Cryptocurrencies – Trade BitCoin, Ethereum & Co.

Crypto Trading – Make quick money with cryptocurrencies! The world is not that simple! Or is it? With the important trading strategies, can be achieved with cryptocurrencies, as strong returns, as with shares, of course, with higher risk. But how does crypto trading work? Are there differences in trading and risk?

• Trade cryptocurrencies

How do I learn to act? Methods

In the past, this was virtually the only way to do it:

Trial and Error.

Trial and error means you actively participate in trading and thus learn, mostly through mistakes you make, i.e. losses. Today, you can “just copy” traders. Let’s look at the function of “social trading” and the 2 ways or methods with which you can improve your trading knowledge (besides Youtube videos, books, etc.), directly in the app.

First, the “classic method” of trial and error.

No investment advice or purchase recommendation!

All information provided here does not constitute investment advice or a recommendation to buy. All statements are my general published opinion. I have obtained the information from my experience as a private investor. This experience report cannot and is not intended to replace personal investment advice from professionals.

Trial and error: learning from mistakes

The classic way – The classic way is, “learning by doing”! You hear about methods, strategies, you read about them, you try them yourself. In the process, you usually lose a lot of money. But that’s okay, because (!) you use for trading of course only money that you have left. One of the most important rules!

Only invest money that you have “left over

This is the only way to stay calm, even if prices slip into the red.

But you can also “copy profiles”, observe traders and draw your own conclusions for your trading strategies. Passively your assets will increase, if chosen correctly.

Now before we “celebrate trading”, here’s a look at a day full of red numbers! Losses, risk, “play money”, be aware of all these factors if you want to trade. In the morning, it can look like this.

Trading app in the browser (price losses):

If you can handle it, let’s move on!

Trader copy: Modern anlagen

The modern method – Modern means in this aspect, copy the investment portfolio of a successful trader. This is exactly the advantage of eToro. Through this “copy feature” in social trading, you can easily copy investment portfolios of other traders.

After copying, the app triggers all actions exactly as the trader does. Accordingly, all financial products are bought and sold simultaneously. As a result, your assets grow and are reinvested, automatically. The big advantage is that your portfolio acts on the basis of the actions of an experienced trader. This reduces risk.

Social Trading: Copy investment portfolio and traders

Social trading is therefore, among other things, another step towards minimizing risk. Why? You do not manage your portfolio yourself and have to check the daily news, financial data, other stock values.

You do not give away your money. You just copy the portfolio and all the trader’s actions. In the eToro app you can take a close look at all movements and transactions. This way, in addition to your own learning, you can build up further practical knowledge. Simply by checking daily which movements are triggered by the experienced traders.

Before I get to the individual functions, here are my quick experiences.

My experience: The first 3 months

I was bored at Christmas and this is exactly where I tried eToro for the first time.

What I really liked was the extremely fast registration. Other trading apps often take days, banks even weeks. Here, the entire registration process was over after 10 minutes and everything was verified after 30 minutes. Accordingly, I was able to start on Christmas Eve and copied my first profiles.

Gain 24/7 trading experience instead of hiring banks

In my experience, it is a nice feeling when you can rely on an experienced person for the first time. PS: Yes, there are classic banks that take over the trade for you, but here you have no real-time insights, you get “only” monthly evaluations. In the app, you are live 24/7 if you want.

For the first time I didn’t have to check the news every morning, someone else does that. I just check the portfolio, compare the different traders with each other and optimize every 14 days. That is, I change a few traders, sometimes only assets allocated to individual traders.

This is what the app looks like (menu and watchlist):

Asset accumulation in history: comparisons

Another big advantage, which I find particularly good in this context, of course, is that you can look at the trader’s asset accumulation in the entire history.

So I can not only look at how the current investment portfolio of the respective trader looks like, I can also look at how the individual months have gone in retrospect. When did the trader achieve returns, when did he or she make losses?

Comparability – The simple and quick overview allows me to compare different traders with each other. So I can easily decide which trader or investment profile I want to copy.

Find a trader: Guidance and overview for beginners

Finding traders – Your very first step is to compare different trailers. As I just described, the overview in eToro is really strong. In the overview you can see the most popular trailers.

Filter – Through the filter function, you can go even deeper. For example, you can search for traders who have a relatively low investment risk, thus a lower return but stable and safer. You can also select traders who have a higher risk, e.g. because they invest in cryptocurrencies or because they trade with leverage. Accordingly, the profits are higher, but so are the losses – be careful!

You can also select individual countries, so that you only follow traders from your home country, for example, who may then also invest in financial products that you know.

This is how the overview of trader profiles looks like:

Trade Profile: Investment portfolio, see profits and losses

Within the overview you will then find the individual traders, with their investment portfolio and the history of their trading, that is, profits and losses in retrospect for the individual months and years. If you now open several tabs on your browser, you can easily compare the different traders and make your choice! Tip: Shortcut ” Ctrl + Tab “, or for Mac ” CMD + Tab ” to switch tabs.

Diversify investments – As always in trading financial products, the more diverse your portfolio, the less risky your investment. Accordingly, you should also divide your assets among different traders.

One trader may invest more in the American market, another more in the Asian market and yet another somewhat more speculative also with cryptocurrencies. Through the mix are the default risk of a single product.

Another advantage – Due to the fact that your single product is a trader, your investment portfolio is already broad anyway. Most traders on eToro hold between 10 and 50 financial products. Usually, of course, stocks.

This is how trading works: trader copy

Once you have copied a Trader Portfolio, the individual financial products are automatically bought / sold in the same ratio.

If you now wait a few hours or a few days, you will see that the first values are also sold again. Traders usually do not hold individual financial products for years, but they use ups and downs of the prices to generate additional profits.

So after a few days you will also see the first evaluation of the profits and losses that your trader has told. Since you automatically copy his or her investment portfolio, you have the same profits or losses that the trader has. This way your assets will increase step by step.

Reinvest – Your additional assets that were earned through profits are then reinvested as well. So you trade at some point with 105% of your capital, 110%, 120% and so on. Thus, your assets increase and you can, as described at the beginning, passively actively participate in trading.

Increase profit through asset accumulation

Profit increase through asset accumulation, simply calculated:

• Profit from 100% = 5% | 1,000 Euro = 50 Euro
• Profit from 105% = 5% | 1,050 Euro = 52.50 Euro
• Profit from 110.2% = 5% | 1,102.50 Euro = 55.13 Euro

Capital investment in copying: Overview

The maximum amount you can currently invest in a single trader is 2,000,000 US dollars, equivalent to 1,680,000 euros. You can copy a maximum of 100 profiles per eToro app account. Trades in general are opened from 1 US dollar. Therefore, the minimum amount per trader copy is 200 US dollars, i.e. 168 euros.

In summary:

• Minimum deposit / profile: $200 / €168
• Maximum amount / profile: 2.000.000 $ / 1.680.000 €
• Maximum copies: 100 profiles

Copy functions

If you want to withdraw money from your portfolio, e.g. because you want to invest it, you have several options. You can stop the portfolio of the trader immediately, so that all financial products are closed and you can, depending on stock exchange opening hours, usually within 6 to 12 hours to access your capital. On weekends, of course, it takes longer, due to the exchange opening hours.

If an individual trader still has losses in the portfolio, you also have the option to stop copying only partially.

In the app, you have these options:

• Add Funds
• Remove Funds
• Pause Copy
• Set Copy Stop Loss
• Stop Copying
• Write New Post
• View Chart

Here briefly explained all the functions in copying the trading profiles:

Add Funds / Add money

Here you add additional capital to an existing, copied profile.

Remove Funds / Withdraw Money

With this function you can deduct open amounts (not invested). Usually this is 0.5 – 10% of the invested capital.

Pause Copy / Pause copying

When you stop, all items are immediately closed (sold). If you don’t want that, choose Pause. Now no new trades will be executed. So you could hold the portfolio and sell it yourself, step by step. For example, because you first want to sell only individual items.

Set Copy Stop Loss

Here you determine how much loss you accept. The standard stop loss (SL) is 60%. That means:

• Invested: $10,000
• Depot loss: -$4,000 -> sell

If the individual deposit or copied profile falls below 6,000 US dollars, it is automatically sold. This “protects” you from even higher losses.

Stop Copying / Stop Copying

With “Stop Copying” everything is sold immediately. As described above, the sale takes time depending on which stock exchange which paper is traded on (time zones). Read more about stock exchange opening hours & time zones here.

Write New Post / New Post

Every trader has a profile and a news feed. Like on Facebook, Instagram & Co. With this function you can write new posts, which are then displayed in the trader’s news feed.

View Chart

Here you can see the entire historical course of your investment with profits / losses in a curve.

EToro: Get to know the app

Stocks, ETF, Cryptocurrency (Bitcoin), … Costs, rating + experience – where do we start? Best here! eToro app – trade stocks, ETF, cryptocurrency, in my blog you have already learned a lot about trading.

Lots of questions of course: what app do you trade with, what do I recommend? So today I want to share with you my favorite trading app, eToro. 29.88% asset growth in 12 months, with low risk through “Copy People” and “Copy Portfolios” or up to 127.35% through active trading and trading strategies.

Learn here step by step about the app, fees and much more. Of course, with all the criteria of valuation, costs and all trading options, from stocks to ETF, index fund, currency, cryptocurrency and commodities.

In addition, the ultimate eToro advantage: You can copy successful traders! Keyword “Social Trading”. In the end, you know the app inside out for your first trades. You want to start right away? Start in the browser or get the app:

• EToro

Cryptocurrency: What is it? Explanation

The most important thing to get started: cryptocurrency is simply explained by the term “digital currency”. You trade cryptocurrency or digital currency like shares at brokers or online brokers (apps).

The price is determined by demand and supply. Just like in the real world, there is a quantity X of product Y. The more product Y want, the scarcer as the quantity X. Supply, demand. The more people buy a stock or (crypto) currency, the more expensive the price becomes.

Coins are limited. New ones are produced by “mining”, more about that later.

Cryptocurrency: comparison with investment forms

But shares have the advantage that you have a real value behind them. But behind the Bitcoin (and other coins) is no company, no economy, behind digital currency is psychology. Comparable to gold. Theoretically gold has no value, but by us humans measuring value to gold we can trade it. The scarcer the good, the more demand, the higher the price.

In fact, you can compare cryptocurrency more to precious metals like gold or silver. Possibly diamonds as well. Nobody really needs them but everybody wants them.

Cryptocurrency are like diamonds

I find the example of the diamond even more beautiful. Objectively just a stone. But because everyone wants diamonds, they get a value. But diamonds are actually just a piece of carbon, a better piece of coal.

Coin mining through graphics cards:

Is cryptocurrency a currency like dollars and euros!

No.

Cryptocurrency, unlike classic FIAT currencies (US dollar, euro, etc.) is not determined by central banks, but by market mechanism of demand and supply.

Difference to FIAT currencies:

• Crypto price determines supply / demand
• None Central Bank / Committees
• Ergo, no central control through interest rates, money printing, etc.
• No “money printing” possible (mining very costly)

Limitation of coins and blockchain technology

Blockchain technology – Once you trade cryptocurrency, you will automatically hear about blockchain technology. The amount of cryptocurrency is regulated. Simply explained, new coin blocks need to be calculated.

There can be a maximum of 21 million Bitcoins (example). Each block (each calculation task) becomes more complex. Accordingly, fewer and fewer new Bitcoins come onto the market. This creation of blocks is called “mining”. Mining is a complex process, accordingly producing new coins costs a lot of time (computing power, electricity). This makes for a “limited money supply”.

Limited money supply – By limiting the money supply, the typical concept of scarcity of supply prevails here. While cryptocurrencies were still highly speculative at the beginning, they have now arrived in the middle of society. Even international companies like Paypal or Tesla want to accept Bitcoin as a means of payment in the future.

The Bitcoin is currently, so to speak, the leading currency among the cryptocurrencies.

Unsafe, unserious, … ! Bitcoin history and future

Many “old” investors are still afraid of cryptocurrency: unsafe, dubious, … but let’s be honest:

The Bitcoin was invented in 2009. At that time, the coin was available for a few cents. Few predicted the cryptocurrency future back then. Bitcoin, was an absolute “nerd thing”.

I remember the first jump above $1,000 myself, the $8,000 I still remember, as well as the $14,000. Last week it was still at $45,000 and just now bitcoin has jumped to $54,000.

Tonight we will surely see the $55,000 mark and this year we will see the $100,000 mark.

In addition, news from the economy, such as Tesla or Paypal, that the Bitcoin will soon be accepted as a means of payment. News from politics that individual countries are thinking about introducing their own digital currencies.

Meanwhile, digital currencies are on everyone’s lips. Everyone is talking about them and many trade them, just like stocks. Currently, there are about 1400 different cryptocurrencies. However, only a fraction of them reach a trading volume of over $1000 per day.

Want to see all BTC / ETH transactions?

By the way, through the blockchain technology, all transactions can be looked up. In fact, all transactions are stored live in the blockchain.

Here you can see for example the movements of Bitcoin and Ethereum

Everything is set up as a P2P network (peer-to-peer). Data is therefore stored decentrally. All data blocks are linked to that of the predecessor. Within this distributed database, all transactions are actually known!

So the whole thing is a network where cryptography-signed messages are published – technical term: blockchain. You want to take a look at these transactions? Take a look at how individual trades can sell up to 100 Bitcoins and millions of dollars are transferred across the table:

• Bitcoin transactions – live on blockchain.com
• Ethereum transactions – live on blockchain.com

Digital currency as the future?

Due to the pure supply/demand situation, it’s good that we don’t have a digital currency yet, because it could theoretically go almost completely to 0 in seconds. Example: There is a scandal or security breach, a large portion sells, so the price collapses (no regulation), more investors leave the coin. It would be an economic crisis of unprecedented proportions.

But back to investing in cryptocurrencies!

Is there an insider tip?

I would ask, Stephan what is the insider tip? The big secret tip is practice, learn, build knowledge. Get involved with the financial products and with the news.

Crypto Trading? Learn and practice

Tip. In all good trading apps you can also create a “virtual account”. Here you get 100,000 $ play money to practice. Such a virtual account is great, because here you can gain experience, make mistakes and learn without losing money. After all, it’s all about building wealth!

Learn, practice, move on:

Advantages and disadvantages of trading

The key advantages and disadvantages of cryptocurrencies lie in the higher risk that comes with the simultaneous option of higher profits.

Stock exchange opening hours: 24 / 7 buy and sell

One big advantage I really appreciate when trading cryptocurrency, as an entrepreneur, you can do crypto trading 24 hours a day, 7 days a week. Perfect for off times, mornings, nights and just time on the weekends. That’s why more and more individuals are getting into crypto trading, they are earning passive income.

In stock trading, including ETFs and other financial products, you have to follow the individual stock exchange opening hours, from Hong Kong to New York.

Danger: No real countervalue

At the same time, cryptocurrency has the great danger that the fall in the price can be very high. Whereas financial products, like stocks, have a real exchange value, the company, the ideas and patents, the logistics, the products. Digital currency, on the other hand, is 100% determined by supply and demand. So the price can sometimes plunge by 50% or 60% and more.

Benefits of cryptocurrency:

• High profits possible
• No stock exchange opening hours, trading possible seven days a week

Disadvantages of cryptocurrency:

• High losses possible
• No real equivalent value, price losses higher than for shares

Here you see for example the NYSE (New York). All shares traded here can only be bought and sold during the day. The stock exchange is also closed on weekends and American holidays.

NYSE (New York, Wall Street):

Buy cryptocurrency

How do I buy cryptocurrency? How do I invest in cryptocurrency?

Buying cryptocurrency is not difficult. The only hurdle is signing up for an app. Once you have installed a trading app (online broker), you can immediately buy cryptocurrency. The important thing is: always choose brokers without additional fees!

Normal is the margin. As you can read in the trading strategies, you always pay a small surcharge at the broker, from which the platform lives. When you buy cryptocurrency, this margin is 3%.

• Selling price = Current price
• Purchase price = Current price + Margin (3%)

I’m sure you’ve heard the saying, “there’s profit in buying”. It’s the same with trading cryptocurrencies. What strategies there are, where the differences are, how high the risk is, you learn here in the free article on trading strategies.

• 3 Trading Strategies

Sell cryptocurrency

Selling cryptocurrency is just as easy as buying it. Usually you only need two clicks or taps on your smartphone. You always sell cryptocurrency at the market price.

When selling cryptocurrencies, two functions that you can find at any online broker will also help you. More precisely, the Take Profit (TP), which means a targeted profit taking at a certain, positive price and Stop Loss (SL), the automatic sale at a certain negative price value.

• Take Profit (TP): Take profit from price XY $ / %.
• Stop Loss (SL): Stop losses below price XY $ / %.

Take Profit allows you to take targeted profits just before psychological price limits.

A typical example here would be every 10,000 steps in bitcoin. As soon as bitcoin reaches a level of 40,000, 50,000, many traders take profits. Accordingly, the price goes down. If you really want to trade actively, you should definitely deal with TP / SL.

How do I buy / sell? Example

Here is a small example of how I trade cryptocurrency. I trade actively, so use TP / SL in the trade, so I can take price jumps or profits.

So that I can calculate selling & buying quickly, I made myself a simple spreadsheet. It automatically calculates for me at which point I have to or want to buy again after the price falls at a certain psychological limit. You can also download the table here for free and then use a trading!

Tip: I have also included stocks in the table. With traders like eToro you usually pay a margin of 0.2% (much less than with cryptocurrency).

• Sell / Buy – Table, Download

The table contains:

• Calculation margin sale / purchase for cryptocurrency (% at eToro)
• Calculation margin sale / purchase for shares
• Calculation of lifting effect (spreadsheet 2)

How does the calculation work? Simply enter the target value (market value) for your sale in the “Sell” line. The table automatically calculates at which price you should re-enter. The price value here is realistic, about 6% below the high. That means 2x margin.

In addition, I set up a price alert in the trading app, so I know shortly beforehand and can actively intervene in what’s happening if I want to. As soon as the price high is reached, the price drops and I trigger a new order at a specific, lower price value. I take the value from my table.

Advantage of this crypto trading strategy

The advantage of this trading strategy, I use the falling price, sell and then buy again cheaper. Thus I take the price jump, up to the previous price high, as a profit. Traders who “only” hold, do not take this gap: “Quantum interest”.

Also at this point again the tip, you can learn more about selling cryptocurrency here:

• 3 Trading Strategies

Cryptocurrency Trading Platform Germany

Where can I trade cryptocurrencies? I’d best summarize that point for you quickly. After a lot of practice, training, and time with real trades in all forms, I would summarize the market from trading platforms right now:

• Classic banks, also with online broker and app with fees
• Online broker with fees
• Online broker without fees (my recommendation!)

Traditional banks: custody fees, order fees, …

Traditional banks – house banks do not have the most modern systems. Some do not even have an app. More importantly, the depot registration takes a long time and often the fees are very high. You pay e.g. custody fees, but also order fees, for each individual purchase of financial products. Of course, many are still traditional with your bank and get here shares or ETF savings plans. I would express my recommendations but clearly for online brokers, for those without fees.

Disadvantages:

• Registration takes a long time, mostly contract, verification, everything via mail
• Deposit fees for account management
• Order fees per trade

Tip. Trade with an online broker (browser / app)

Online brokers / apps with fees

Online brokers with fees – Most online brokers have fees, just like banks. However, the fees are usually much lower. The account maintenance fee here is usually not in the triple digits, but maybe only $10 or $20 a year. Many also charge an order fee, usually in the amount of $5, on each individual purchase of securities. Therefore, when choosing your trading platform, make sure that there are no fees other than margin (explanation above).

Tip, always pay attention to this:

• No custody fees
• No order fees

Online Broker Apps / without fees (recommendation)

Online Broker without fees (my recommendation) – The best trading app? The best trading app is the one that costs nothing! So when choosing your trading platform for cryptocurrencies, make sure that you don’t pay any custody fees and no order fees. Especially if you are doing strategies like the high/low trades described earlier. So you would have to pay an additional +$5 with each trade. With 20, 30 trades a day already 100 $, 150 $. Only the margin is what the online broker should earn on the trade.

What do I trade my cryptocurrency with? Read more about mine here:

• Trading App

Cryptocurrencies and rates

As mentioned at the beginning, there are now over 1,400 different digital currencies. Keeping track of them is not that easy! So that you have an overview of which digital currencies are currently interesting, I have a big list and overview for you:

• Cryptocurrencies: List

Accordingly, when you buy and sell cryptocurrency, you are no longer just trading bitcoin. You have the choice between different types of investments. Accordingly, you can diversify your investment portfolio, just like in stock trading. For example, you can bet on new coins that cost less than $1! You can also bet on the established coins, such as Bitcoin, Ethereum, Litecoin or Dash.

Popular cryptocurrencies currently include, for example:

• Binance Coin (BNB)
• Bitcoin Cash (BCH)
• Bitcoin (BTC)
• Cardano (ADA)
• Dash
• EOS
• Ethereum
• Ethereum Classic (ETC)
• IOTA (MIOTA)
• Litecoin (LTC)
• NEO
• Ripple (XRP)
• Stellar (XLM)
• Tezos (XTZ)
• TRON (TRX)
• ZCASH (ZEC)

How such a diversification of your crypto investment portfolio can look like, you can see in this article:

Trading strategies: buy, hold and sell

When to invest in cryptocurrency? Which cryptocurrency to invest in? Buying and holding cryptocurrency is the big challenge for many beginners and novices.

The mistake I made is short-term thinking. The price goes down, instead of profit, you make loss and already you sell! Wrong!

Tip: Read more about my trading experiences and mistakes here.

If you already know how to trade stocks, you have a lot of advantages in crypto trading. Because, you already have the peace of mind to hold values. Price fluctuations in the stock market are quite normal and happen every trading day. Sometimes the prices fluctuate more, sometimes less. Important, keep patience.

Just as the share price can fall by 13% today, it can also rise by 13% tomorrow, or perhaps even by 26%, and your loss has already turned into a 100% profit.

Trading cryptocurrency is accordingly like trading stocks, only on the fly.

The downside of crypto trading, you can’t base your information on economic, financial and political news. The market and psychology play a big role. If the price suddenly drops by 10%, many get weak kneed, sell, the price drops further and further. This happens much faster in cryptocurrency trading than in regular stock trading. Here, the strategies are set for a longer term. Want to learn even more about trading strategies? Then be sure to check out this free guide from me.

• Cryptocurrency: Trading Strategies

ETF Cryptocurrencies: Bitcoin to ZCash

Many then ask the question, isn’t there an ETF for cryptocurrencies? If you’ve never heard of “ETF”, here’s a quick explanation!

So-called ETFs (Exchange Traded Funds) bundle several individual stocks into one financial product.

ETF example: Tesla or e-car sector

Instead of 1 product with 100% risk, you have 1 product that contains many individual stocks that minimize the risk of your investment. Instead of “Tesla”, in the example of stock trading, you buy an ETF that deals with electric automobility and contains, for example, in addition to Tesla also values such as Nio (electric cars from China) and Niu (scooters). The risk is distributed.

In the stock market, ETFs are therefore even called ETF savings plans. Trading with ETFs is therefore about solid asset accumulation with little risk. Individual stocks, as well as shares but also cryptocurrencies, can experience strong price fluctuations due to effects, news. If you are not just in front of your trading app and learned of the news, you lose money quickly.

Risk minimisation through diversification

As described, ETFs bundle various individual stocks into one financial product. This has the advantage that you invest simultaneously, for example, in 30, 40 or 50 shares. If a single stock suffers a strong price loss, it only makes up a part of your portfolio. Thus, a 30% price loss becomes only 1, 2% loss, in the portfolio. This low-risk form of trading stocks is what makes ETFs so interesting for asset managers and private wealth accumulation.

Now back to the question:

Is there an ETF for cryptocurrency?

I would like to answer this question with a yes and a no. There are crypto portfolios that resemble an ETF. But I also want to tell you that the risk of crypto portfolios, whether they are colloquially called “ETF” or not, remains high.

Read more here, with comparison bitcoin / crypto portfolio of my current investments:

• ETF Cryptocurrencies

Buy crypto for small and medium businesses

Speaking of ETFs and relatively safe investments: Doesn’t investing in cryptocurrency then also increasingly make sense for companies?

• Paypal News: Bitcoin is accepted as a means of payment
• Tesla News: Tesla invests 1.5 billion USD in Bitcoin

Just as this article is also for beginners and beginners, mentioned again:

Invest only “play money” in speculative trades!

Especially as entrepreneurs and business owners, a core competence is most likely not the financial products, but in other areas. As an entrepreneur myself, I trade most mornings, nights or weekends – believe me, you don’t have the time for day trading! Between new business, employees, taxes, only invest the money you have left. But if you have profits to spare, crypto trading is an interesting option for your wealth building.

If you look at the performance of stock prices, stock markets in general, over the last few decades, you can see that there are profits to be made over the long term.

Cryptocurrency has now been around since 2009, over a decade. Prices have steadily increased from a few cents to $1, $10, $100, a thousand and maybe soon it will be $100,000. Digital currency is the future. So why not invest some of your profits in cryptocurrency?

• Buy crypto for small and medium businesses

Cryptocurrency or shares

Cryptocurrency or stocks? As previously described, stocks have significantly less risk of default. Stocks are not only subject to the pure market mechanisms of demand and supply, they have substantial goodwill behind them.

Here’s the strategy I use at my company:

In regular times, I invest a maximum of 20% in cryptocurrency.

In case of news and expected price increases, my investments in the cryptocurrency portfolio also increase once up to 40%. Such news are e.g. messages from PayPal that the Bitcoin will soon be accepted as a means of payment. Such news also comes from Tesla, which recently invested 1.5 billion dollars in the Bitcoin.

Cryptocurrency future

Which cryptocurrency is the future? Here is another analysis, looking back at the last 12 months and the cryptocurrency list. With all the digital currencies you should have on your radar if you want to buy, hold and sell cryptocurrency. How has digital currency performed over the last 12 months? An analysis:

• Cryptocurrency future

ETF explained: Bundled values

So-called ETFs (Exchange Traded Funds) bundle several individual stocks into one financial product. Instead of 1 product with 100% risk, you have 1 product that contains many individual stocks that minimize the risk of your investment. Instead of “Tesla”, in the example of stock trading, you buy an ETF that deals with electric automobility and contains, for example, in addition to Tesla, stocks such as Nio (electric cars from China) and Niu (scooters). The risk is distributed.

“Ready-made” portfolio or design your own crypto portfolio?

Basically, you have two options. Option number 1: You invest in a ready-made crypto portfolio that is created and managed by an online broker. That is, you invest equity and then wait and see what happens. Option number 2: You create your own crypto portfolio and decide for yourself how much you want to invest in different digital currencies.

Let’s look at the first, simple option first.

Buy “ready-made” Crypto Portfolio

I myself trade with eToro. I have already described the advantages of the trading app many times. Fast registration, no custody fees, no order fees.

In trading apps like eToro, for example, you can get or invest in different “crypto portfolios”.

The advantage is that trading – buying, holding, and selling individual positions – is handled by another person, just as it is with typical ETFs, which consist of stocks and are managed by a company or your broker. Here, it’s similar. In my example, eToro provides several “Crypto Portfolios”. I can then invest with 2 clicks.

Another advantage, with such managed portfolios you have little work.

These crypto portfolios then include a certain number of cryptocurrencies. For example, you can invest in the two most successful cryptocurrencies, Bitcoin and Ethereum, or in a mix of 15 cryptocurrencies.

Comparison: Bitcoin (single) and Crypto Portfolio

Here I have made two screenshots for you. In screenshot 1 you see Bitcoin individually. In screenshot 2 you see a finished product of the broker called “Crypto Portfolio”.

Bitcoin single (investment dependent on BTC)

Here you can see my purchases from 17.02. to 19.02. – The advantage: I have this one cryptocurrency exactly in view. With tools like Google Alert, I can be informed about news at any time. The trading app itself also offers a “price alert” so I can react quickly to changes. The downside – “all my money” is in one investment.

Importantly, always think risk! This is only a snapshot and not an automatism

Crypto Portfolio (Distribution on 10+ Cryptos)

Here you can see my crypto portfolio at the exact same time. The advantage – My investments are spread across different digital currencies. If one loses value, it hopefully only affects that single asset and the rest of the investment remains unaffected. The disadvantage – Keeping track of all the rates is time consuming. Therefore, it is worth considering such a “cryptocurrency ETF”. Here, as mentioned, purchases and sales are made by the broker.

The risk of these crypto portfolios is high, but so is the potential profit. The values you see above were generated in less than 48 hours. A big driver in this trend is of course always Bitcoin, but also other values like Ethereum, Neo, Dash, many others are rising in value. Just in the last year, cryptocurrency values have shot through the roof again. Check out a review with forecast here, or the review of the last, exciting 12 months in crypto trading:

• Cryptocurrency future

A small reminder of the risk: such a crypto ETF does not offer the same security as a regular ETF from stocks. This is because the individual stocks themselves are subject to such large fluctuations.

Crypto ETF: Create your own investment portfolio

Once you’ve gained a bit of experience in crypto trading, you can also build your own cryptocurrency portfolio.

Caution: Course correlations at Crypto

But then it’s important that you stick with it. Unlike stocks, cryptocurrencies are still very close to each other in their price. If, for example, the Bitcoin sinks, many other cryptocurrencies usually go down with it. This is not always the case, but it is often the case. It’s quite different with stocks, imagine Mercedes sinking in value, that would have no effect whatsoever on McDonald’s stock. However, if a central currency drops again Bitcoin or Ethereum, many of the smaller stocks will drop with it. If a value is sold frequently (by active traders), this can also have a negative effect on the overall psychology in the market (private individuals).

As already described in the article on buying cryptocurrency, cryptocurrency is subject to the pure market principle of demand and supply. There is no overriding, regulating body that defines the price or can readjust it, e.g. by printing money, interest rates and other instruments.

Create your own crypto portfolio

Off of that, creating your own “crypto ETF,” if that’s what you want to call it, is relatively simple. You need to look at the different stocks, then consider which stocks do you want to include in your portfolio? Additionally, ask yourself which stocks are the most relevant and should make up what percentage of the portfolio?

1. What stocks do you want to take in your portfolio?
2. What are the relevant stocks and should they make up what proportion of the portfolio?

Step 1: Important cryptocurrencies

The first step, as I said, is to make yourself a market overview. What are the important cryptocurrencies? So that you don’t spend days on the internet, I have summarized the most important cryptocurrencies in an overview for you.

• Cryptocurrencies: List

Here you can find various important digital currencies. The popular cryptocurrencies currently include e.g.:

• Binance Coin (BNB)
• Bitcoin Cash (BCH)
• Bitcoin (BTC)
• Cardano (ADA)
• Dash
• EOS
• Ethereum
• Ethereum Classic (ETC)
• IOTA (MIOTA)
• Litecoin (LTC)
• NEO
• Ripple (XRP)
• Stellar (XLM)
• Tezos (XTZ)
• TRON (TRX)
• ZCASH (ZEC)

Do your research, talk to friends and acquaintances who trade cryptocurrencies themselves and about having virtual accounts with online brokers. Find out which mix currently delivers the best performance.

Step 2: Cryptocurrencies and their share

If you want your own created ETF to end up with 15 currencies, you need to think about the allocation of your investment. In my portfolio, I have identified 3 cryptocurrencies, of which I have bought a double-digit percentage of each. The remaining 12 currencies are in the single digits.

• A Cryptocurrencies: 3x at 10-20%.
• B Cryptocurrencies:

Under “B Cryptocurrencies” I see mostly new and cheap coins, currently for example Neo. The portfolio then looks like the screenshot above, here again:

Crypto Trading: Learn to trade

Crypto Trading: Make quick money with cryptocurrencies! The world is not that simple! Or is it? With the important trading strategies, can be achieved with cryptocurrencies, as strong returns, as with shares, of course, with higher risk. But how does crypto trading work? Are there differences in trading and risk? Stocks are more speculative than ETFs, cryptocurrency is more speculative than stock trading. So, safe wealth building tends to mean investing in ETFs or stocks. Speculation means higher risk, but at the same time potentially higher profits. As a trader, you have to decide which is more important to you. This is a comprehensive insight for you into crypto trading, with many more links to other crypto topics from me. Good luck with your learning! Buy, invest, hold and sell:

• Crypto trading