Indices Trading Market Tutorial
Learning to trade the stock indexes trading market will be much easier for beginner indices traders that starts by learning indices trading basics as they will have the basic ideas and concepts that are required to make it easy to understand what is stock indexes trading and how to carry out stock indexes trading.
What is Indices Trading?
Now with the advancement in technology and the growth of the internet stock indexes trading and the coming up of retail brokers indices trading has now become accessible to retail traders and anyone with a computer that is connected to the internet can start trading indices. The minimum starting amount required to start trading is $100 dollars making indices trading affordable to many retail traders and investors.
The retail investor can now get access to the online stock indices market through these retail stock indexes trading brokers. All a indices trader requires is to open an account with a stock indexes trading broker and the indices trader can then trade with their stock indexes trading broker from anywhere in the world.
The retail indices brokers also provide traders with the capital required to trade in the stock indexes trading market using stock indexes trading leverage. Stock Indices trading is traded in standard indices lots or one standard indices trading contract. Because many traders cannot afford this, brokers provide capital to traders and traders can borrow this capital from their indices brokers and trade with it using stock indexes trading leverage. For example a stock indexes broker will provide stock indices leverage of 100:1 meaning that a retail trader can borrow up to 100 times of the capital they have. Therefore, if a indices trader has capital of $1,000 dollars in their account using indices trading leverage 100:1, they can borrow up to 100 times their capital, this will be $1,000 multiplied by 100, which is equal to $100,000 dollars which the indices trader will now control and the indices trader can trade with this amount in the stock indexes trading market. This means that a indices trader with only $1,000 dollars can now trade with $100,000 leveraged amount in Indices after using stock indices leverage of 100:1 from their stock indexes trading broker.
Indices Trading Leverage which means that a indices trader has access to borrowed capital and can trade with this borrowed capital provided by their indices broker is what makes indices trading accessible to may retail stock indexes traders. This stock indices leverage is what has contributed to the growth and popularity of indices trading. In indices trading 95% of all trading transactions is carried out by retail stock indexes traders.
Indices Trading Market Moves
In indices trading, stock indices prices are always moving up or down and it is this movement that traders want to trade in order to try and make a profit from these stock indexes price moves. The daily stock indexes price fluctuation is very small and mostly these moves are less than 1 % in value. This is why indices brokers provide stock indexes trading leverage and why most traders use indices trading leverage so that they can multiply the profits from these market moves. Stock Indices is traded in big lots of many units so as to increase the profits per transaction - However, this can also increase losses as well if the trades go against a trader's position.