How to open an FBS account?
Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to withdraw the money you earned with FBS?
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to activate Level Up Bonus?
Open Level Up Bonus account in web or mobile version of FBS Personal Area and get up to $140 free to your account.
What is a pullback in stocks?
A pullback on the stock market is a short-term drop or a pause in the long-term uptrend. Usually this is followed by a new rise to a higher level. It often occurs after a significant rise in price and typically results in the price being below the original high. The term pullback is often used interchangeably with the terms consolidation or retracement. However, the term pullback refers to shorter in duration price drops.
There are other terms describing drops in price, that is correction and reversal. Though pullbacks are brief declines of 5% to 10%, corrections are 10% to 20% and reversals are over 20%.
How a pullback works
The reasons behind pullbacks are explained simply with the supply and demand ratio. To put it simply, when the stock price increases, short sellers enter the market and buyers prefer to leave. As a result, when the short sellers hastily close their positions and the buyers pounce on the stock again, the market bounces back instantly in the direction of the main trend. Therefore, demand for the asset does not let it fall, keeping the price at a certain level.
Trends do not last forever and eventually they end. So you have to be careful, there is always a chance that what appears to be another pullback is actually a trend reversal. The more times a stock pulls back and resumes its trend, the less likely it is that the trend will pick up again after the next pullback. In other words, early pullbacks give a better chance of trend continuation.
How to trade with pullback
How to trade trend pullbacks might appear a tricky question, because you have to make a choice:
- to take no action and wait for the trend to resume;
- to close the position and open a new one when the trend resumes;
- to trade against the trend until the pullback is over.
Long-term traders prefer to wait out pullbacks. They almost always have the fundamental data on hand, confirming the imminent resumption of the trend. Swing traders use the standard practice of closing a trade and reopening it after a pullback, which is actually the best way to trade on pullbacks.
When dealing with pullbacks, the most important thing is to establish the moment when the correction begins and ends (or when it transitions into a reversal). To determine the beginning of a pullback, traders usually use momentum indicators.
2022-05-30 • Updated