What is SX 50 Index Trading Strategy? - How Can I Trade SX 50 Index - Learn Trading SX 50 Index
The SX 50 Index Chart
The SX 50 Index chart is shown below. On the example below this financial instrument is named as SX50CASH. As a trader you want to find a broker that provides this The SX 50 Index chart so that you can start to trade it. The example below is of SX 50 Index on the MetaTrader 4 Forex and Index Trading Platform.
Index Trading Strategy For Trading SX 50 Stock Index
The SX 50 Index is comprised of blue chip stocks picked from the best performing sectors in the Euro Zone; therefore a good strategy to trade the SX 50 Index is to trade long most of the times. This is because in general the best stocks in Europe will generally keep moving up and up because the companies behind these stocks are the best and most profitable companies in Europe.
The SX 50 Index is also revised every year so that if one stock is not doing well then it is replaced with another stock that is doing good. This ensures that most of the times the SX 50 Index will keep going up.
As a Stock indices trader you want to be biased and keep buying as the index moves up. When the European economies are doing well this upward trend is more likely to be ruling. A good strategy would be to buy 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.
Margin Required Per 1 Lot - € 40
Value per 1 Pip - € 0.1
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 indices trading topics: What is stock index trading money management and stock indices trading money management methods.