Forex trading is all about risk control. Pending Orders can be an option to manage the risk of trading the current market. But what happens if the feature turns out to be restricted within some certain price distance?
Understanding Broker's Stop Level
As the name suggests, stop level is the minimum distance that you can place when executing a stop order on the trading platform. These include stop loss, buy stop, and sell stop orders.
So if a broker determines that the minimum stop level is 20 pips, then you cannot place a stop loss smaller than 20 pips. Likewise, when you want to set a buy stop or sell stop, you cannot choose an entry target with a distance smaller than 20 pips from the running price.
Why Should You Choose Low Stop Levels?
Limitations of the broker's stop level can affect risk management and the accuracy of your trading execution. This especially applies to short-term traders who do not set big SL targets and are sensitive to price accuracy.
What if it turns out that the trading system generates an Entry level that is only 10 pips away from the current price? Or, what if it turns out that the your risk tolerance is only up to 15 pips?
If you are that type of trader, then don't make the mistake of registering with a forex broker that has a high stop level.
To make your search easier, we have collected information from various well-known forex brokers. Here are the forex brokers with low stop levels:
FBS
FBS Broker sets their stop levels at 0.0 pips for all instruments provided. In other words, there is no minimum distance at all in stop-order executions at this broker. Traders are also free to choose any trading pair.
For your information, FBS provides 550+ trading instruments in various asset classes. Not only forex pairs, traders can also trade commodities, shares, and indices at this broker. The fees charged are also very affordable with spreads starting from only 0.7 pips and trading commissions starting from 0%.
Exness
Exness applies 0 pips stop level policy in all instruments and account types. The multiple licensed broker however stated that the stop level value is subject to change and may not be available for high-frequency traders and Expert Advisor users.
In addition to trading freedom with no stop level, Exness has trading specifications that are ideal for traders with various strategies. This is because Exness can provide spreads as low as 0 pips in addition to special accounts for trading with US Cent base currency.
IC Markets
In IC Markets, the stop level can be confirmed on their account comparison page under the "Order Distance Restriction" label. In that section, this broker claims to have no restrictions so traders can open pending orders with a stop level as low as 0 pips. This policy is applied to all accounts, be they cTrader, Raw Spread, or Standard accounts.
For your information, the IC Markets Raw Spread account is one of the most popular low-spread trading accounts among retail traders. This broker also provides the Raw Spread Plus feature which is accompanied by exclusive rebate benefits for high-volume traders.
XM
Confirmed directly from the XM broker site, the stop level for all trading instruments in this broker only reaches 0.0 pips. These provisions also apply to Limit Levels, so it can be said that this broker does not apply any limits to all types of pending orders on its platforms.
Trading execution at the XM broker is available with a no requote policy so that pending order transactions are guaranteed to run smoothly. For small-cap traders, this broker has provided a Micro account with a starting deposit of $5 and 1,000 units per 1 lot trading volume.
FXTM
FXTM has joined the trend of providing low stop levels. In fact, this broker does not set stop and limit level restrictions at all on every account type. Traders can also benefit from spreads starting from 0.0 pips in this broker. However, please note that there is a commission of $0.4 to $2 when trading on the Advantage account.
Another condition that needs to be considered at this broker is leverage. The reason is, FXTM implements a floating leverage that is adjusted to the account balance. This feature is activated to limit the risks from high leverage during unpredictable market conditions.
FirewoodFX
FirewoodFX is quite transparent in explaining their stop levels. According to the official information on their website, stop level for all account types is set within a minimum range of 2 pips.
Please note that the Micro account in this broker has a special condition where 1 lot equals 10,000 units, not the usual 100,000. With a minimum 0.01 lot on the account, you can open a position with a volume as low as 100 units. This is very suitable for beginners and strategy testers who tend to ook for real accounts with the lowest risk possible.
Important Tips Regarding Broker's Stop Levels
Even though stop level is important to pay attention to, many brokers never put importance on highlighting their policy on it.
There are brokers who have included it in their account overviews or contract specifications, but there are also those who only provide the information when the trader has registered an account and downloaded their platforms.
Therefore, you need to dig a little bit deeper if you really want to know the broker's stop level before registering an account. What you can do is:
- Thoroughly browse the broker's site, or
- ask customer service directly, or
- register a demo account and see the stop level on the trading platform.
Furthermore, stop level can be different for each trading instrument. Usually, major pairs have lower stop levels than cross and exotic pairs. To measure the standard stop level between brokers, most traders agree to use EUR/USD as the benchmark.
Apart from that, many brokers similarize their stop levels to the minimum distance for limit orders too. In fact, it is not uncommon for brokers to also set it as the minimum take profit.