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S&P/ASX 200 Index

The ASX 200 stock index tracks the top companies in the Australian Stock Exchange market. The total number of stocks used to calculate this index is the 200 top Australian corporations represented in the ASX200. This index is calculated based on the capitalization of the included corporations & it is reviewed quarterly.

Even though this index is calculated based on the capitalization, it doesn't track capitalization: it tracks the change in the stock prices of the various component stocks in this index.

S and P ASX 200 Index - Strategy for Trading ASX200 Index - S&P ASX200 Index

The ASX 200 Index Chart

The ASX 200 Index chart is shown above. On the illustration put on display above this trading instrument is named as AUS200CASH . As a fx trader you want to find a broker that provides this The ASX 200 Index chart so that you as a trader can start to trade it. The example above is of ASX 200 Index on the MetaTrader 4 Forex and Indices Platform .

Other Info about ASX 200 Index

Official Symbol - AS 51:IND

The 200 component stocks that make up the ASX 200 Index are picked from the top Australian companies measured by capitalization. This index has got a particular base upon which the sum total market capitalization is adjusted relative to this base - the calculation formula also has a divisor that means that this index will only reflect a change in movement only when the share prices move up and not when the market capitalization does, henceforth, this index show the difference in the share prices rather than the total market capitalization. This is because the base represents the starts value of all share prices & when this index is calculated it tracks the total change in the share prices.

Strategy for Trading ASX200 Index

The ASX 200 Index will in general move up because share prices always move up over time. This index generally moves up over the long-term because Australia economy also displays robust growth backed up by their mining industry that has great reserves of XAUUSD and other valuable commodities.

As a currency trader wanting to trade this index, the index will move upwards faster when the Australian economic indicators show accelerated economic growth.

As a stock index trader you want to be biased and keep buying as the stock index heads and moves upward. When the Australian economy is doing well (most of the times it's doing well) this upwards trend is more likely to be ruling. A good strategy would be to buy the dips.

Contracts and Specifications

Margin Required Per 1 Lot - AUD 70

Value per 1 Pip(Point) - AUD 0.1

Note: Even though the general and overall trend is in general upwards, as a forex trader you have got to factor in the daily market volatility, on some days the stock may oscillate or even retrace, the retracement might also be substantial sometimes and thence as a forex trader you need to time your trade entry precisely using this strategy: Indices strategy & at the same time use the appropriate/proper money management principles and guidelines just in case of more unexpected market trend volatility. About equity management techniques and guidelines lessons: What's money management and equity management methods.

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