FTSE 100 Index

The FTSE 100, also known as Financial Times Bourse, is the stock index that shows the top 100 companies in the UK that are on the London Stock Exchange. This stock index is calculated using shares/stocks, which are reviewed every three months. The stocks in the FTSE 100 account for 80% of the total market value of companies listed on the London Stock Exchange.

Because the FTSE 100 index tracks 100 corporations the index will be more volatile as compared & analyzed to an index such as the Germany DAX30 which only tracks 30 corporations.

FTSE 100 Index - How is The FTSE100 Calculated?

The FTSE 100 Trade Chart

The FTSE 100 trade chart is displayed and illustrated and shown above. On example above the index is named as UK100CASH. You want to find an online broker who provides this FTSE 100 trade chart so that you can begin to trade it. Example displayed and shown above is of FTSE-100 on the MT4 Platform.

Other Details about the FTSE 100 Index

Official Symbol - UKX:IND

The 100 components stocks which constitute FTSE100 are chosen and selected from the top United Kingdom companies. The FTSE 100 share stock index is closely followed as an indicator of the prosperity and performance of UK businesses. The constituents which make up this index are reviewed quarterly. The calculation of this index is a simple formula which is based on the market capitalization.

Strategy for Trading/Transacting the FTSE 100 Index

FTSE 100 shows the relative movement of the top 1 hundred stocks in the UK. In general the share size of the top 1 hundred companies will keep heading upwards, therefore this index will also over time keep heading upwards. Should a company not meet the required business growth targets, the corporate will be removed from the index and replaced with an alternative company that has better growth prospects.

As a trader wanting to trade this index, general market direction sentiment at any one moment will likely be bullish than bearish. This is because as long as the 100 corporations being tracked and monitored are doing booming/good biz, then their share value will keep heading upwards, and thence this index will also keep moving and heading in an upward trend.

As a trader focused on stock indices, your preference should lean towards a bullish bias, favoring purchases as the index trends upward. Given that the UK economy often demonstrates robust performance, this upward market bias is frequently the dominant condition. An effective stock index strategy would involve buying on every minor price dip.

During Economic SlowDown and Recession

During economic slowdown & recession times, companies begin and start reporting slower revenues, slower profits and lower growth prospects. It's due to and because of this reason which investors & traders start to sell shares of firms reporting lower profits and hence the stock index keeping track of these specified stocks will also start to move downward.

So, in these periods, index trends often point down. As a trader, you need to tweak your approach to match the falling trends in the stock index you trade.

Contracts and Specifications

Margin Required Per Contract - £ 70

Value per Pip - £ 0.1

NB: Even though the general and overall trend is in general moves upward, as a stock index trader you've got to factor in the daily market price volatility, on some days the stock index may move in a range or even retracement, stocks market retracement may also be substantial sometimes and thence as a trader you need to time your entry precisely when using this strategy: indices trading strategy & at same time use the appropriate and appropriate/proper money management principles & guidelines in case there's unexpected volatility in the market movement. About equity management strategies/guidelines in index lessons: What is index equity management & stock index money management strategies.

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