SMI 20 Index
The SMI 20 Index or Swiss Market Index 20 is a stock market index that tracks the top 20 companies in Six Swiss Exchange in Switzerland. This 20 stocks listed represent the blue chip stocks in the Six Swiss Exchange Market – these are also the most traded stocks in this stock exchange.
The SMI 20 Index Chart
The SMI 20 Index chart is shown above. On the example above this Index is named as SWI20CASH. As a trader you want to find a broker that provides this The SMI 20 Index chart so that you can start to trade it. The stock index example above is of SMI 20 Index on the MetaTrader 4 Forex and Stock Indices Trading Platform.
Other Information about SMI 20 Index
Official Symbol – SMI:IND
The 20 component stocks that make up the SMI 20 Index are picked from the top companies in France. The 20 stocks make up most of the trading turnover volume in the SIX Swiss Exchange Market. The Index calculation is reviewed yearly.
Strategy for Trading SMI 20 Index
The SMI 20 Index tracks the capitalization of the top 20 companies in Switzerland. This index generally moves up over the long term because the Swiss economy also shows strong growth. The Swiss also has one of the strongest banking system in the world – making the Swiss one of the most reliable economy.
As a trader you want to be biased and keep buying as the index moves up. When the Swiss economy is doing well most of these top stocks will continue to move up and therefore this index will also move in an upward trend. A good stock index trading strategy would be to keep buying 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 - CHF 100
Value per 1 Pip - CHF 0.5
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.