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 Stop Loss
Stop Loss is a kind of limitation that helps traders not to lose too much money. It is a crucial element in trading. It helps to control the amount of loss that a trader can face. As soon as the level goes too low, it automatically closes the trade.
If the trader is making a selling trade, Stop Loss should be above the entry level. And vice versa: if the trader is making a buying trade, Stop Loss should be below the entry level.
To set Stop Loss in MetaTrader 4 and 5, you need to click “New Order” and then in the popup set the necessary Stop Loss.
Example of Stop Loss
Let’s imagine a trader named Festus. He wants to sell XBRUSD when the level is around $117 before the weekends (as we know, there’s no trading at the weekends) with the target at $112. He is not sure whether the price goes up or down, and of course, Festus wants the profit. He wants to make sure that he won’t miss the fluctuations when the trading begins and won’t lose too much before he checks his MetaTrader. Therefore, he uses Stop Loss at $118 to limit potential losses. If the trade is successful, Festus will get a nice profit; in the bad case, for instance, if XBR rises to $128, he will lose only the amount limited by the Stop Loss and not more. For instant, if his position volume is 0.01, losses will be limited by $10. The avoided loss will be $100. The potential profit in the good case will be $50.
Pros and cons of Stop Loss
There are several benefits of using a Stop Loss. Firstly, you don't have to monitor your trade every second; the system automatically closes the trade when the price reaches the Stop Loss level. Secondly, it usually costs nothing to implement. And finally, Stop Loss also helps isolate decision making from emotional influences. Traders may maintain the false belief that if they give the stock/currency pair another chance, it will come back, but, in reality, this delay can only lead to increased losses. In addition, Stop Loss gives the feeling of security that the trader can’t lose too much.
The downside is that short-term price fluctuations can trigger a Stop Loss prematurely. It’s a common situation when the price fluctuates only for a minute and after that goes in the direction of a trade. However, during the fluctuation the price may trigger a Stop Loss if it’s too small, i.e. too close to the entry level. If a trade is closed automatically, a trader loses the potential profit. That’s why it’s a key skill of a trader to find a good place for a Stop Loss. The Stop Loss shouldn’t be too extreme, because it won’t make any sense, and it shouldn’t be too small, because the trade can be closed in the wrong moment after a tiny fluctuation.
Remember your trading strategy
Knowing how to use Stop Loss productively can be an important skill. It’s the part of your own trading strategy. Try using Stop Loss orders in FBS Demo Account. After regular trading and building your trading strategy, it becomes more understandable what kind of Stop Loss is suitable for you.
2022-05-27 • Updated