What is SX-50 Trade Strategy? - Tutorial to Trade SX 50 Index
The SX 50 Trade Chart
The SX 50 chart is displayed and shown and displayed below. On the example below this financial instrument is named as SX50CASH. As a trader you want to find a broker that provides SX 50 trade chart so that you as a trader can start to trade it. Example displayed below is of SX-50 on MT4 FX & Platform.
Strategy of Trading SX 50 Index
SX 50 is comprised of blue chip 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 times. This is because in general the best stocks in Europe will generally keep moving up and up because the corporations behind these stocks are the best and most profitable corporations in Europe.
The SX 50 is also revised each year so that if a stock isn't doing well then it is replaced with another stock that's doing good. This ensures most of the time SX 50 will keep going upwards.
As a trader you want to be biased and keep buying as the index moves upwards. When European economies are doing well this upwards trend is more likely to be in-favor. A good indices trade strategy would be to buy dips.
During Economic Slow-Down & 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 will also start to move downward.
Hence, during these times, market trends are likely to be moving downward and as a trader you should also adjust your trading strategy accordingly to fit the prevailing downwards trends of the stock market index that you are trading.
Contracts & Specifications
Margin Requirement for 1 Lot - € 40
Value per 1Pip - € 0.1
NB: Even though general trend is generally moves upwards, as a stock indices trader you have to factor in daily market volatility, on some days the 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 equity management and equity management methods.
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