What is SX-50 Strategy? - Lesson Tutorial to Trade SX 50 Index
The SX 50 Trade Chart
The SX 50 chart is displayed and illustrated and shown and displayed below. On the example laid-out below this financial instrument is named as SX50CASH. As a trader you want to search, look for & find a broker who provides SX 50 trade chart so that as you as a trader can begin to trade it. Example displayed below is of SX-50 on MT4 FX and Platform.
Strategy of Trading SX 50 Index
SX 50 is composed of blue chip shares/stocks choosen from top performing sectors in the Euro Zone: therefore a good indices trade strategy to trade SX 50 is to trade long most of the time. This is because in general the best stocks in Europe will in general keep moving up and up because the corporations behind these stocks are the best and most profitable firms in Europe.
The SX 50 is also revised each year so that as if a stock isn't doing/performing well and good then it's replaced with another stock that's doing good. This ensures most times SX 50 will keep going and moving upwards.
As a index trader you want to be biased and keep on buying as the index moves & heads upwards. When the European based economies are doing and performing well this upwards market trend is more than likely to be the one ruling. A good indices strategy would be to buy dips.
During Economic Slow Down and Recession
During economic slow down & recession periods, companies begin reporting lower earnings, lower profits & lower business growth forecasts. It is due to this reason that traders begin & start to sell stocks/shares of companies which are recording lower profits & therefore stock index tracking these particular stocks will also start to move downwards.
Hence, during these times, market trends are much more likely to be moving downward and as a trader you should also adjust your strategy accordingly to fit the prevailing downwards trends of the stocks market index that you are trading.
Contracts & Specifications
Margin Requirement per 1 Lot/Contract - € 40
Value per 1 Pip(Point) - € 0.1
NB: Even though general trend is in general moves upwards, as a stock indices trader you've got to factor in daily market volatility, on some days the index may oscillate or even retrace, market pull back may also be substantial sometimes and thence as the trader you need to time your entry precisely using this trading strategy: trade strategy & at the same time use proper/suitable money management rules and guidelines in case there's more unexpected volatility in the market movement. About equity management methods and guidelines in stock index lessons: What is equity management & equity management methods/strategies.
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