FTSE 100 Index

FTSE - Financial Times Stock Exchange Market, FTSE 100 represents the Stock index of the top 1 hundred biggest firms in the UK that are listed in the London Stock Exchange. The calculation of this index incorporates stocks which are determined quarterly. These stocks included in FTSE 100 represent 80% of total market value of the London Stock Exchange listed companies.

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 & shown above. On example above the index is named as UK100CASH. As a trader you want to find an online broker that provides this FTSE 100 trade chart so that you can start to trade it. Example displayed and shown above is of FTSE-100 on the MT4 Forex and 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 revised 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 company 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 be more bullish than bearish. This is because as long as the 100 corporations being tracked are doing booming/good biz, then their share value will keep heading upwards, and therefore this index will also keep heading in an upward trend.

As a trader you want to be biased & keep buying as the index moves up. When the UK economy is doing good (most of the times it's performing good) this upward trend is more likely to be in-favor. A good indices trade strategy would be to buy and keep buying the dips.

During Economic SlowDown and Recession

During economic slowdown & recession times, companies begin to report lower profits and lower growth prospect. It is due to this reason which investors start to sell stocks of firms reporting lower profits and hence the stock index keeping track of these specified stocks will also start to move downwards.

Hence, during these times indices trends are likely to be heading downward & as a trader you should also adjust your trading strategy accordingly to suit the prevailing downwards trends of the stock market index that you as a trader are trading.

Contracts & Specifications

Margin Required Per Lot - £ 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 have got to factor in the daily market price volatility, on some days the stock index may move in a range or even retracement, stock market retracement might also be substantial sometimes and hence as a trader you need to time your entry precisely when using this strategy: indices strategy & at same time use proper equity management guidelines just in case of more unexpected volatility in the market movement. About equity management rules in index lessons: What is index equity management and stock index money management methods.

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