NASDAQ 100 Stock Index
NASDAQ 100 is an index that includes 100 of the largest corporations displayed in NASDAQ bourse which are not in the financial sector. The calculation of this stock index is based on weighted factor of market capitalization of the displayed 100 securities. The 100 companies displayed on this stock index are reviewed quarterly.
The 100 companies used to calculate this stock index aren't necessarily based in USA: foreign international companies are also included as long as they're displayed in NASDAQ Bourse.
The NASDAQ 100 Chart
The NASDAQ 100 trade chart is displayed & shown & displayed above. On the example above this index is named as US100CASH. As a trader you want to find a broker that provides NASDAQ 100 trade chart so that you as a trader can begin to trade it. Example displayed above is of NASDAQ 100 on MetaTrader 4 Forex Software.
Other Information about NASDAQ 100 Index
Official Symbol - QQQ:IND
The 100 components stocks that constitute the NASDAQ 100 are calculated using a weighted factor for each stock. The constituent stocks and weighting for each stock is reviewed quarterly.
Strategy of Trading NASDAQ 100 Stock Index
NASDAQ 100 method of calculating makes it more volatile and therefore there are much more wider swings in the price movement of this index. The has a weighting component for each stock included on this stock index. Although this index generally moves upward over the long term because US economy also shows strong growth.
As a trader you want to be biased and keep buying as the index moves upwards. When America economy is performing good, stocks that constitute the NASDAQ 100 stock index will keep gaining in values & thus this stock index is likely to keep moving in an upward trend. A good stock indices trade strategy to trade this Stock Index would be to buy dips.
During Economic Slow-Down and Recession
During economic slow-down and recession times, companies begin to report lower profits & lower business growth prospects. It is due to this reason that traders begin to sell stocks of companies which arereporting lower profits & therefore stock index tracking these particular stocks also will begin to move downward.
Hence, during these times, trends are likely to be moving downwards & as a trader you should also adjust your trading strategy accordingly to fit the prevailing downward trends of the stock market stock index that you're trading.
Contracts & Specifications
Margin Requirement for 1 Lot - $ 30
Value per 1Pip - $ 0.1
NB: Even though general trend is generally move upwards, as a trader you've to factor in daily market volatility, on some days the stock index might oscillate or even retrace, market pull back may also be substantial at times and therefore as a trader you need to time your trade entry precisely using this trading strategy: trade strategy & at the same time use proper money management rules just in case of more unexpected volatility in the market movement. About equity management rules in stock index lessons: What is stock index equity management and stock index money management methods.
