How to start trading Stocks with FBS?
Experienced investors always adhere to the rule, “Don’t put all your eggs in one basket.” This means that diversifying your funds across different markets and assets can help maximize your profit and minimize your risk.
FBS gives you the opportunity to profit not only from currencies and commodities but also from trading stocks of major US companies.
Shares are a type of security that signifies proportional ownership in the issuing company. In other words, if you own stock in Apple Inc., you own a fraction of the iPhone maker. Traders buy and sell shares of public companies. As a result, stock prices fluctuate, creating fantastic trading opportunities.
About CFDs on stocks and reasons to trade them
Although the opportunity to make a profit from buying and selling shares is open, the actual process is not that simple. To trade stocks, you have to fulfill various documents and invest large sums of money. However, there is an easy solution that allows you to combine the best features of the stock market with the special features of currency trading. This solution is called CFD (Contracts for Difference).
CFD is a special type of contract that is based on the underlying price of the asset (in this case, on the price of a certain share). This allows the trade to make a profit on the difference between the entry price and the exit price of the trade.
Example. If you open a buy transaction on Tesla shares at a price of $300 with a volume of 1 lot and the price increases to $350, you will get a profit of $50 (without commission calculation). With 1:10 leverage you don’t have to have $300 to open this trade: the margin the broker will set aside to cover your position is only $30. When you open trade volumes in larger lots, the potential profit on the same price movement will be greater. The same goes for potential losses if the market turns against you, so you should always have proper risk management in place.
As you can see in the example above, stock CFDs can provide a pleasant experience by predicting stock prices without involving the physical stock from the seller to the buyer.
In general, CFDs have the following advantages:
- You can open buy and sell transactions on stock CFDs, whereas conventional stocks allow you to make a profit only by increasing their price.
- Stock CFDs are traded on margin, so you can have additional leverage compared to buying the underlying stock yourself.
- You can enjoy trading currencies and stocks through the easy-to-understand MetaTrader interface.
What drives stock prices?
Stock CFDs have the same price chart as the underlying conventional stock. To make money on stock prices, we recommend using MetaTrader 5.
Information regarding stock prices on MT5 is sent directly from the American stock market. Therefore, if you open an MT5 account at FBS and install this program on your computer or mobile device, you can trade stocks just like trading on currencies. You can apply all the technical analysis knowledge for Forex trading that you already have here.
However, the fundamental factors that drive stock prices can be different. The dynamics of the stock depends on the financial results and certain news related to the related company. The FBS team monitors every important stock news and provides analysis on the company’s website , so traders will always have the opportunity to profit from the dynamics of the stock price. Not only that, once in a quarter the company publishes earnings and earnings reports . These releases often lead to significant price swings while creating huge profit opportunities for all stock CFD traders.
To start trading stocks, you need to open an MT5 account, as well as download and install this software and login to the account. Next, do the analysis and start knitting your profit!
How to download and open an MT5 account
Below you can find out the easy steps to have an MT5 account.
Step 1. Log in to your personal area via the FBS website. Click “Open an account” on your dashboard.
On the “Account type” menu, select “Cent MT5” or “Standard MT5” and press the “Open account” button. After that you will receive your new account number along with your trading password.
Step 2. Download the MT5 software, either directly from the personal area or from the “Trading” menu on the website. Install it to your computer or smartphone.
Step 3. Login to MT5 using the account info you got when you completed step 1. The login process is declared successful if you see a green icon with your internet connection speed in the lower right corner of the trading platform.
Open the “Market watch” window, right click and select “Show all”. You can view the list of assets available for trading and select the stock you wish to trade. Contract specifications can help you find key info about the CFD.
Start making profit on stocks
The leverage provided for stock trading on FBS is 1:10. Stock trading on MT5 is available from 16:30 to 23:00 MT on weekdays.
Don’t forget to pay attention to an important point regarding commissions: when you open a trade, you won’t be able to see it in the “Trade” tab. However, when you close a transaction, the commission will appear in the account history.
Remember, before you start trading with your personal money, be sure to practice on a demo account first. To do this, select the “Demo” tab in the personal area dashboard and click “Open an account”.
Examples of stock trading
Look at Bank of America (BAC) stocks. The stock showed impressive dynamics in the last quarter of 2019: the price broke above the 2018-2019 resistance line and has continued to show an uptrend since then. In November-December, the price consolidated in a rectangular pattern, but then broke out upwards. The news about the Fed members not predicting a rate cut in 2020 pushed up BAC prices considering that banks advance rapidly if interest rates rise. This news is a fundamental consideration for buying transactions.
Trading stock CFDs on FBS will make it easier for you to make your trades more diverse, as well as offer more profit opportunities. Open an MT5 account and make profit on Google, Facebook, etc shares with FBS!