The EURO STOXX 50 Index
The EURO STOXX 50 Index represents the trend movement of the top 50 Blue Chip Stocks in Euro Zone. These stocks are picked from the most profitable sectors of the Euro Zone economy. The Top 50 Stocks are also picked from a variety of Euro Zone countries. These 50 stocks are the most liquid stocks in the Euro Zone. The countries Include are 12 in total and these are:
- Germany
- France
- Netherlands
- Portugal
- Spain
- Belgium
- Finland
- Italy
- Austria
- Greece
- Ireland
- Luxembourg
The EURO STOXX 50 Index is represented on a chart as a Financial Instrument just like currencies and stocks, and this Index chart can be traded just like forex currency charts.
The EURO STOXX 50 Index chart movement can be analyzed using technical analysis and other indicators can be placed on this Index Chart.
The EURO STOXX 50 Index Chart
The EURO STOXX 50 Index chart is shown below. On the example below this financial instrument is named as EU50CASH. As a trader you want to find a broker that provides this The EURO STOXX 50 Index chart so that you can start to trade it. The example below is of EURO STOXX Index on the MetaTrader 4 Forex and Stock Indices Trading Platform.
Just as currencies a trader can use their own strategy or trading system to trade these stock index the same way that they trade currencies. Traders can even use their Expert Advisors to trade these Indices.
Other Information about EURO STOXX 50 Index
Market Time - 0900 - 1800 Central Eastern Time
Stock Indices Symbol - SX5E or SX5E:IND
The 50 component stocks that make up the EURO STOXX 50 Index are revised once every year to determine if to change this composition or not.
Strategy For Trading EURO STOXX 50 Index
The EURO STOXX 50 Index is comprised of blue chip stocks picked from the best performing sectors in the Euro Zone; therefore a good strategy to trade the EURO STOXX 50 Index is to trade long most of the times. This is because in general the best stocks in Europe will generally keep moving up and up because the companies behind these stocks are the best and most profitable companies in Europe.
The EURO STOXX 50 Index is also revised every year so that if one stock is not doing well then it is replaced with another stock that is doing good. This ensures that most of the times the EURO STOXX 50 Index will keep going up.
As a trader you want to be biased and keep buying as the index moves up. When the European economies are doing well this upward trend is more likely to be ruling. A good stock index trading strategy would be to buy the dips.
During Economic Slow Down and Recession
During economic slowdown and recession times, companies start to report lower profits and lower business growth prospects. It is due to this reason that investors start to sell stocks of companies reporting lower profits and therefore the stock index tracking these particular stocks will also start to move downwards.
Therefore, during these times stock index trends are likely to be heading downwards and as a trader you should also adjust your trading strategy accordingly to fit the prevailing downward trends of the stock market index that you are trading.
Contracts and Specifications
Margin Required Per 1 Lot - € 40
Value per 1 Pip - € 0.1
Note: Even though the general trend is generally upwards, as a trader you have to factor in the daily market volatility, on some days the stock index may oscillate or even retrace, the stock index market retracement may also be significant at times and therefore as a trader you need to time your entry precisely using this strategy: Stock indices trading strategy and at the same time use proper money management rules just in case of more unexpected volatility in the market trend. About money management rules in stock index trading topics: What is stock index money management and stock index money management methods.
