Williams’ Strategy
Bill Williams is the creator of some of the most popular market indicators: Awesome Oscillator, Fractals, Alligator, and Gator.
How to trade stocks with FBS?
2021-07-16 • Updated
Information is not investment advice
Experienced investors always go by the rule that says “Don’t put all your eggs in one basket”. It means to diversify the funds between different markets and assets. If some elements of the whole basket of the assets lose their value, their drop can be offset by other assets which increase its price, and the outcome will be positive.
FBS offers various instruments to its clients: from currencies and commodities to stocks of big US companies!
A stock or share is a type of security that signifies proportionate ownership in the issuing corporation. In other words, if you own a stock of Apple Inc., it means that you own a very small part of the iPhone maker. Investors buy and sell stocks of public companies. As a result, stock prices move up and down.
What instruments will help you trade stocks?
The actual process of trading stocks is not that simple. To start, you will need to fill in a lot of documents and invest an ample amount of funds. However, there’s a simple solution that will allow you to combine the best features of the stock market with the features that are typical for currency trading. There is a special type of contract based on the price of an underlying asset (in this case, on the price of a particular stock).
Example. If a trader opens a buy trade on the stock of Tesla at $300 with 1 lot as a volume and the price goes up to $350, the trader will earn $50 (without taking into consideration commission). With the leverage of 1:5, a trader won’t need the entire amount of $300 to open this trade: the margin that will be set aside by the broker to cover your position will equal just $30. If a trader opens a bigger trade size in lots, the potential top-up balance on the same movement of the price will be greater. The same will be true about the loss if the market turns against a trader, so every trader should always make the proper risk management.
As you can see from the example above, stock contracts let investors experience the joy of stock investing without the burden of physical transference of the stocks from a seller to a buyer.
All in all, this way has the following advantages:
- Both buy and sell trades are available, while traditional stocks allow only investing.
- These instruments are traded on margin so additional leverage is available compared to the purchase of an underlying stock itself.
- All the instruments are on one platform!
What drives stock prices?
Stock instruments have the same price charts as the underlying traditional stocks. To have an access to stock prices you will need to set up the FBS Trader app or/and MetaTrader 5.
The information about stock prices arrives on platforms directly from American stock markets. As a result, if you open an account with FBS and install the programs mentioned above, you will be able to trade stocks. If you are familiar with Forex, all the knowledge about technical analysis you already have will be useful for stocks!
However, fundamental factors that drive stock prices are different. The dynamics of stock depend on the financial results and other news related to that particular company. FBS team monitors the key stock news and provides an analysis at the company’s website, so traders can follow them and be updated. Moreover, once in a quarter companies release earnings and revenue. These publications lead to immense swings in stock prices.
To start trading stocks you need to download the FBS Trader app or MetaTrader 5 if you haven’t done it yet.
How to download the FBS Trader app and open an account
FBS Trader's all-in-one trading platform is a great app to trade mobile, and it’s really easy to use!
Step 1. Go to Google Play and download FBS Trader. The app is available only for Android smartphones now, but iOS users will have this opportunity as well soon!
Step 2. Open the downloaded app and register your account.
Step 3. Choose the type of account you want to trade. Create Demo to learn trading or a Real account to enter the real market. By the way, you can use both!
Step 4. Push the button at the lower-left corner with three candlesticks and then scroll the upper menu till you see ‘Stocks’. After that, you will be able to scroll through the list of stocks available for trading and choose the stocks you like.
How to download MT5 and open an MT5 account
Below you will find the simple steps for setting up an MT5 account
Step 1. Go to the FBS website, register/login, and then create the MetaTrader 5 account, if you don’t have one.
Step 2. Open the account settings and download the MT5 platform. Alternatively, go to the “Trading” section of the website menu and install the needed software.
Step 3. Login to MT5 using the account information you got in Step 1. The login process is successful when you see a green icon with the speed of your Internet connection in the bottom right corner of the trading platform.
Open the “Market Watch” window, right-click and choose “Show all”. You will be able to scroll through the list of assets available for trading and choose the stocks you want to trade. Contract specifications will let you discover the key information about these instruments.
Important! The leverage for trading stocks with FBS is 1:5. Stock trading is available from 16:30 to 23:00 MT time on weekdays.
Example of a stock trade
Let’s consider the stock of Amazon – the US tech giant company, involved in e-commerce, cloud computing, digital streaming, and artificial intelligence. It sharply jumped after the coronavirus outbreak as the company benefited from the stay-at-home regime. Indeed, the demand for online shopping, streaming, and cloud services significantly rose during the long lockdowns. Since mid-summer of 2020, Amazon was moving back and forth in a horizontal corridor between $2900 and $3500. This week, it has escaped that corridor breaking above the resistance of $3500! The main reason is that Pentagon has decided to divide the $10 billion contract of a cloud-computing deal between Microsoft and Amazon. The full contract should have gone to Microsoft only, but Amazon argued that it would be unfair and Pentagon agreed! The news provided a fundamental reason for a huge swing up you see in the chart below.
The time for stock trading has come
Trading stocks with FBS will help to make your trading more diverse! Open an account in FBS Trader/MT5 and enjoy trading stocks of Google, Facebook, and more with FBS!
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