What is CAC40 Trading Strategy? - Guide for Trading CAC40 Index
The CAC40 Trade Chart
The CAC40 chart is displayed & shown above. On above example this Index is named FRA 40CASH. As a trader you want to find a broker that provides CAC40 Stock Index chart so that you can begin to trade it. Example displayed above is of CAC40 Stock Index on MT4 FX Trading Platform.
Strategy for Trading CAC40 Stock Indices
The CAC40 Stock Indices tracks capitalization of top 40 companies in France. This Stock Index generally move upwards over long term because French economy also shows strong growth.
As a trader you want to be biased & keep buying as the stock index moves upwards. When French economy is performing good most of these top stocks will continue moving up and therefore this index will also move in an upward trend. A good stock indices trade strategy would be to buy the dips.
During Economic Slow-Down & Recession
During economic slow-down and recession times, companies start to report lower profits and lower growth prospect. It is due to this reason that investors start to sell stocks of companies which are reporting lower profits and therefore Stock Indices tracking these specified stocks also will begin to move downward.
Hence, during these times, trends are likely to be moving downwards & you as a trader should also adjust your trading strategy accordingly to suit the prevailing downward trends of the stock index that you're trading.
Contracts and Specifications
Margin Requirement Per Lot - € 40
Value per Pip - € 0.1
Note: Even though general trend is generally move upward, as a trader you've got to consider and factor in daily market volatility, on some of the days the Indices might move in a range or even retrace & pull-back, the market retracement move may also be a substantial one at times and therefore as a trader you need to time your entry precisely when using this trading strategy: Index strategy & at same time use proper equity management guidelines just in case there's more unexpected volatility in the market movement. About indices equity management guidelines courses: What is stock index money management & Indices equity management strategies.
