How Do You Set Up For Indices Trade?

Stock indexes are the newly introduced leveraged products for trading. Traders wanting to begin trading these indices should first of all take time so as to learn how the markets work. Traders should take their time to learn about leverage - leverage is when a trader is given $100 to trade with for every $1 dollar of their own. For illustration, if a trader has capital of $20,000 dollars to start with, then after getting leverage from their brokers traders will now control $2,000,000 & they can now open trade positions worth upto $2,000,000. This is what leverage is, a stock index trader gets more money to invest with. This is what makes online stocks indices popular.

However, with leverage a trader has to learn how control this leverage by learning equity management system/plan. Money management methods will show traders how to control leverage so that they can use this leverage to their advantage and make profits.

The best way to learn about the indices is to open a demo trade account, that way as a trader you'll learn about index investing without depositing money. The demo account is a practice demo account where a trader can practice with virtual currency - everything else about the demo account is similar to the real/live account except for the virtual currency used in a demo account. The demo account will provide beginner traders with access to the real stock market. One can practice with this demo practice account until they are ready to open a real account & start trading the market with invested capital, where profits can be withdrawn & losses deducted from their capital.

Below is a listing of guides containing all the info that beginner traders require to begin.

1. Introduction to Index

2. Stock Index Instruments

3. Market Hours

4. Strategy

5. System

6. Plan

7. Market Sentiments

8. Advantages of Stock Index

9. One of the Best Broker

The above lessons will provide beginners with the best beginning point when it comes to studying. Other tutorials that can be applied to online indexes are:

Start Stock Index - Index Lessons

How to Start

The first thing that a trader has to do so that as to begin is to download the stock indices platform & then install this platform on their computer so that as to get access to the online market.

Once you've downloaded and installed the platform you will then open a demo practice account, then you'll be ready to start.

The next thing one has to do is to learn the various instruments available for online trading. These instruments are:

EURO STOXX 50
DAX 30
Dow Jones 30
FTSE 100
Nikkei 225
S&P ASX 200
FTSE MIB 40
S & P 500
NASDAQ 100
CAC 40
SMI 20
AEX 25
Hang Seng 50
IBEX 35

In the online stock market only the most popular indices are available for online trading, these are the 14 that are listed above.

Where to Find these Index on the Trading Platform

As beginner you might want to know where to find these financial instruments in your platform, this is displayed and illustrated and shown below.

How Do You Set Up For Online Trading? - How to Trade Index Tutorial

Stock Index Instruments on Software

A trader can find these instruments from the "Market-Watch" window that's displayed and illustrated and shown above. To find the market-watch pop up window on the platform above a trader can follow these steps: click 'View' next to 'File' at the top left corner, from the drop down menu choose "Market-Watch", above Market-Watch window pop-up will appear displaying a list of these stock index. Alternatively use the key-board short cut keys - CTRL+M.

If some of these instruments aren't shown on the platform a trader can follow the steps below so that to have these instruments displayed on the above market-watch window.

Right click within the Market-Watch window & then choose 'Show All' as is illustrated/shown below:

How to Set Up For Online Index - How to Trade Stock Index Tutorial

Display all Index on Software

You can then choose to open charts by choosing a particular index & open its chart.

After opening all the instruments which you want you might also want to then click 'Hide All' as is shown above so as to hide those instruments which you are not trading and also save internet band-width by only realtime the financial trading instruments which you are trading.

After choosing all the 14 indices such as shown above you're ready to begin practice trading these instruments in your demo account.

Trading Charts

Stock Index are analyzed using charts, indices values are drawn on a chart graph & these charts is then traded like a financial instrument for purpose of speculation and making profit.

As an example the US100 weekly trade chart is displayed and illustrated and shown above. The movement is measured in points. The above index current value is 4471.10 - One can buy this trading instrument & if the value then appreciates to 4471.50, trader will have made a profit of 40 points. One can also sell the instrument and if the value moves down to 4470.50, trader will have earned a profit of 60 points.

For index a trader can make money both when the market is moving up or down. When a trader buys this is called going long & when a trader sells this is referred to as going short.

Brokers

Traders get access to the Online market through online brokers. These brokers are the ones that provide trading platforms, demo practice trading accounts, real accounts, trade charts and all the technical analysis tools required for trading index.

The brokers charge a small fee for every trade opened which is known as the spread. For illustration a broker might charge 3 points as their spread, therefore in the above illustration where profit is 40 points a stock index trader would have to also factor 3 points which are charged for the trade by the broker - thenceforth the profit would be 37 pips after factoring the online broker's charges.

How Much Money to Start?

The minimum recommended capital to begin trading with is $10,000. Starting with any amount below this will mean that you will be undercapitalized. Most traders start with $10,000, $20,000 or $50,000, this way they are well capitalized and thence they have better chances of earning and making profits.

Those traders that begin with less capital are undercapitalized and under capitalization is one of the things that makes most traders not to succeed. Just like all other businesses, if you begin any business while undercapitalized chances of the business not succeeding are greater as when compared to when you begin a business while having enough capital - the same with online trading.

How to Use Practice Accounts

Practice accounts allow traders to practice trading without having to invest or deposit money, this way a trader can learn and decide if stock index trading is suitable for them or not. If as a trader once you have practiced and are making profits on your practice account then you as a Stock Index trader can open a live account, deposit money as capital & start trading these instruments for profits.

The recommended time for practice demo trade account practice is 30 days. These 30 days as a trader you'll continue to learn tutorials about stock indices trading so that as you as a stock indices trader can continue to improve your trading skills & at the same time practicing trading on the demo practice.

Technical Analysis and Strategies

The nest thing to do is to make a point of learning the various technical analysis topics used to analyze stock index movements & also strategies used. On this site you will find all the info about these strategies & technical analysis tutorials required to help you improve your skills so as to increase your knowledge and also your chances of making profits in this online stock market.

Get More Tutorials and Lessons & Courses:

Trade Stock Indices