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Nikkei 225 Index

The Nikkei 225 Index is a stock market index for the Tokyo Stock Exchange in Japan. This index tracks the stocks of the top 225 companies listed in the Tokyo Stock Exchange.

Nikkei 225 Stock Index - Strategy for Trading NIKKEI 225 Index


The NIKKEI 225 Index Chart

The NIKKEI 225 Index chart is shown above. On the example above the index is named as JP225CASH. As a trader you want to find an online broker that provides this The NIKKEI 225 Index chart so that you can start to trade it. The example above is of NIKKEI 225 Index on the MetaTrader 4 Forex and Indices Trading Platform.



Other Information about NIKKEI 225 Index


Official Symbol - NKY:IND


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The 225 component stocks that make up the NIKKEI 225 Index are picked from the top Japanese companies. The NIKKEI 225 share index is closely followed as an indicator of the prosperity of Japanese businesses. The calculation of this index is a simple formula on based on market capitalization.


Strategy for Trading NIKKEI 225 Index

The NIKKEI 225 Index shows the relative movement of the top 225 stocks in Japan. Because this index tracks 225 companies it will be more volatile when compared to an index like the Germany DAX 30 that only tracks 30 companies.


As a trader wanting to trade this index, this index is generally more volatile and the trend for this index although generally upwards over a long time it will have more oscillations than other stock indices. Your strategy should factor in more volatility when trading this index.


When the Japanese economy is doing well (most of the times it is 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 slow down 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 indices trends are likely to be heading downwards and as a stock indices trader you should also adjust your trading strategy accordingly to fit the prevailing downward trends of the stock market index that you are trading.


Contracts and Specifications

Margin Required Per 1 Lot - JPY 90

Value per 1 Pip - JPY 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 may oscillate or even retrace, the 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 topics: What is money management and money management methods.

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