Hey... So, another question I've been asked is "what's the difference between a trade
and an order on Etoro?" And it's really quite simple - there's a few things which
are a bit technical, but really, it's a simple thing. So, whenever you buy
something on eToro, you're normally buying it - you see the
price listed on the page... So, if we go to Bitcoin - let's go to Bitcoin, because
that's been doing well... So - here we see the normal price. That's how much we
normally would buy Bitcoin for... Here's the trade button - we're used to that. When we go
to the 'trade' button - say we want to buy some Bitcoin... So obviously, if you're
buying, it means you're betting the price is going to go up, and if you want to sell,
it means you're betting the price will go down - you want to make money that way.
So, we're normally - we see this thing... Here's the price - Now, we see that the 'buy' price
and the 'sell' price are different. That's the spread fee... So, when I press those
buttons - you see this number changing - now... But normally, when we open a trade, we
expect to open the trade instantly, okay - I want to buy it right now, I don't want
to wait, I don't care how the price is going to change... I do, but only in future
I want to buy it now, and that's - my, kind of, bet is placed. Now, over here, we see the
button which says 'trade'. If we click on that button, we can see that there's
another option which is 'order', and this is - some people have asked what's this
about... Really basically, all it is is that an order
is that you.... When you select order, you can set a price that you want to buy it at...
or if you're selling, that you want to sell it at - doesn't have to be the
price it's at now, okay. So, you're putting an order in - let's say I want to buy it...
I think that Bitcoin is going to go down below 8,000 let's say. So I want to set
an order at 7,900 okay so I can do it here - I can specify
any level - any price that I actually want to buy it at, which isn't the one where it
is currently. That's basically all an order does. Now, we're kind of used to
using orders... When you set up a trade, and you start a new trade - you
often set a 'stop loss'. So, a stop-loss is actually an order - it's a stop loss order...
What you're saying is that 'if it ever gets to this predefined level, cancel it,
sell - close the position, sell my trade - I want to get out of it." Same with the 'take
profit'... If I go into any of my trades, here in the portfolio... It's my
virtual portfolio... Here's my 'take profit'. So, the take profit is saying 'if it
ever gets to 396.29, close the trade, and I want to
get out of it.' - that's a type of order okay... So a 'take profit' is an order, a 'stop
loss' is in order, but with all trades, it automatically asks you if you want to
set those up. Because one's for security, and one's to take your profits.
So even though take profit and stop-loss are actually orders, they're very
different from what we're talking about when we say 'what's the difference
between a trade versus an order'. I just, kind of, wanted to give the fullest
information about what an order is, so that people can understand - we can
understand - that we use them anyway... It's not like some mysterious
thing. Now, take profit and stop-loss... Here I am on 'Zendesk'. If I press trade...
Here's the take profit, and here's the stop-loss, and here's the order. Here's
really what we're talking about. 'At market' and 'order'. So, the take profit and
stop-loss - they're not called orders on eToro, okay... So, it's a bit confusing if I
say that - if I even call them 'orders' because people might get confused...
When we talk about orders, we're talking about these things here... Where we want to buy
into a stock or an asset at a particular price, these ones - the take profit, and
stop-loss... they both deal with when we want to exit a trade at a particular
price, okay... So those are orders to exit a trade, but we don't call them orders - so
you won't find them up here - you can't set your stop loss from the order bit...
Whenever you start a trade, you'll see your take profit is here, and your stop
loss is there. Anytime, if we're in a trade, and it's already active, we can go
to our portfolio, and we can go to any trade and - here's the stop loss and take profit.
And we can just click on it, and we can edit that, even whilst the trade is
active, okay. So those orders - they're different okay. They're to exit a trade,
and Etoro puts them there so that we have some security - so that we have a time
where we can either take the profit, because we've made as much profit as we
want, or we think we can make - and we want to get out of the trade, we want to close
the trade. Or stop-loss - because we've lost as much money as we want to lose
we've predetermined that, and it gets us out of the trade. They're both to get out.
The orders we're really talking about are actually the ones when we want to
get into a trade. So it's these ones here... It's that. So... That one - if you're on
a stock, you can find it there, and if you're on
anything else other than a stock, you can find it here, okay. I don't know why
they've done the difference - made it different on stocks and other assets,
but they have. With the rest of them, when you're setting a new trade - so we'll
go back to Bitcoin... That's basically all it's doing - is it's
saying "I don't want to buy it at the current market value." This - what we're
normally doing here, when we buy or sell - is actually known as an 'At Market order'.
or a 'market order', but we don't have that - we just have a 'Buy' button or 'open trade'
button. As standard, the default is actually a 'market order' - this is actually
called a 'limit order' when we set it as an order, but here, it's just called
'order' to keep it simple. When you select order, you can set any price you want, and
there we are... And you can set the order at 8,000 - boom boom boom, so there we are -
8,000, and I set the order, okay. Now, that is going stay open - so if I go here, I'm
back in my portfolio... you see, this button shows my history - the history of my trades...
This is my portfolio, this one will show any orders. So there it is - there's my
order - that's how much I invested, I'm going to execute it at 8,000, and it's
currently here, all right... Now, there are different types of orders you can set - in
other sites. You can set them, you know - it has to be filled by the end of the day
or get rid of it, it has to be filled within so many minutes or get rid of
it... This one is actually - in other places - it's known as a 'Good till ... ' executed... I can't
remember... Whatever, basically the orders we have here will stay open until
they're fulfilled - and they might not be fulfilled - it might not go down to 8,000,
Bitcoin might go higher and higher and higher, never get to 8,000 - in which case
that order's never going to be filled. You're never going to by that amount of
Bitcoin ... So, this order will be executed if it's there - If it's not - it
doesn't get there - the price of Bitcoin, then this order will just stay open.
Whenever you want, you can just go here, and you can cancel the order. Big thing
comes up 'Cancel Oder' - boom - 'pending close' and it's closed. So
that's how orders, kind of, work. Now, why do people use them? Alright, so when
you're - when you're trading, you have two basic big schools of analysis. So there's
'fundamental analysis' - where you're looking at
the sort of - the fundamentals of a company. Is Apple going to do better? Is it
going make money? How they got a new CEO? How's the stock price? Have they got a
lot of debt? what's ... - lots of things - earnings reports...
These are the fundamentals - Have they got new products? Do I think they're
going do well in future, or badly? These are going to affect the price fundamentally
all right... I've heard - good investors that I've listened to have said that 80% of your
reasoning should be fundamental - really... about the fundamentals of a company
if you want to really invest properly... The other part is called 'technical analysis'.
Now, technical analysis is where you're looking at the charts. So, if we go to any
- anything - we go back to Bitcoin, we go here, and we can go to the charts, and we
can see a bit about what it's been doing over time. It's unbelievable, what it's
been doing over time... Now, so - when you decide you want to buy something
or you want to sell something, people say you should do that using 'fundamental
analysis', but then, look - if you look at Bitcoin, it goes up and down, and up and
down, and up, and there's all this sort of variation,
Okay. Now, the study of that variation and how the chart actually moves is called
'technical analysis'. So, you're studying this - which is not about the fundamentals
of a company, it's about how the price is moving on the actual exchanges. So, one
thing they do is - people want to find what's called the best 'entry
points' and 'exit points'. So, once they've worked out that they actually want to
make the trade - they want to invest in a company, they start looking at "all right,
I want to make this buy, but what's the best time to enter?" They know that it
goes up and down, and up and down, so do I want to enter here and it's about to go
down? Or do I want to wait till it's here, and go up? The study of how to find the
best entry and exit points, as well as looking at longer-term movements is
called technical analysis. So you have to study that - technical analysis, you can
study charts, you can study the sort of - the trading instruments... There's lots
of different studies, and 'stochastics' and 'volume charts' - you can put loads of
things over here - different things to help you with your technical analysis.
And you'll have to study them separately - it takes time. But, once you understand
technical analysis - say, for instance, 'resistance' and 'support'
I made a video - a short video about what 'resistance' and 'support' is. Support would
be places where it's bounced off it in the past, and it looks like it
will go up. If it does it enough times, it forms support, so you can be pretty sure
in future, when it hits that, the market's going to say 'hold on, I don't think it's
going to go below here." and go up again. Resistance is the one above - it'll stop
it going up... 'Support' below, 'Resistance' above... Once you know things like that -
even basic things like that, you could set an order for where you see the
support. Do you see what I mean - so I think, when it gets to there - I think it's
going to go up because there's a support level. I'll set an order at that price...
or - if there's a resistance line you say 'okay, I think it's gonna hit that
resistance, and it's going to go back down - so maybe I'll set an order.. If it
breaks out - if it goes just above that resistance, then I think it's going to go to
the moon, so I'm going to set an order there." These are some of the things people can
use orders for, okay. So, you can use it, in conjunction with technical analysis
to find the best possible entry points, and exit points, out of a trade which you
already believe in... In simple terms, that's the difference between a
trade and an order on Etoro.