FTSE100 Stock Index

FTSE - Financial Times Bourse, the FTSE100 index represents the Index of the top 1 hundred largest companies in UK that are displayed and shown in London Stock Market Bourse. The calculation of this stock index is made up of a list of stocks which are determined quarterly. These stocks that are included in the FTSE100 Stock Index represent 80 percent of the total market value of the London Stock Market listed companies.

Because the FTSE100 Stock Index tracks 100 firms the stock index will be more volatile as compared to an stock index like Germany DAX 30 which only tracks 30 firms.

Strategies for Trading/Transacting FTSE100 Indices - FTSE Diagram

FTSE 100 Chart

FTSE100 chart is shown and displayed above. On the above illustration the index is named UK 100CASH. As a trader you want to find an online broker that provides FTSE100 chart so that you as a trader can begin to trade it. The example That is illustrated above is that of FTSE100 Stock Index on MT4 FX Trade Platform.

Other Information about FTSE100 Index

Official Indices Symbol - UKX:IND

The 100 component stocks that makes up the FTSE100 Index are selected from top UK firms. The FTSE100 share index is closely followed as an indicator of the performance of UK businesses. The constituents that make up this index are revised quarterly. The calculation of this stock index is a simple formula which is based on the market capitalization.

Strategy to FTSE100 Index

FTSE100 Index represents the relative trend movement of the top 100 stocks in UK. In general stock value of the top 1 hundred firms will keep moving upward, hence this stock index also will over time keep heading upward. Should a company not meet the required business growth targets, the company will be removed from the stock index & replaced with another company that has better business growth prospects.

As a trader wanting to trade this Index, the over-all general market direction sentiment at any one given moment will be more likely bullish than bearish. This is because as long as these 100 corporations that are being tracked & monitored are doing good in business, then their stock value will keep heading up, & therefore this index will also keep heading in an upward market trend.

As a trader you want to be biased & keep buying as the index moves upward. When UK economy is doing well (most of the times it is doing well) this upward trend is much more likely to be the one that is ongoing. A good stock index trade strategy would be to keep buying and buy the dips.

During Economic Slow-Down and Recession

During economic slow-down & recession times, corporations start to report lower profits & lower growth prospect. It is due to this reason that investors start to sell stocks of companies that are posting & recording lower profits & hence Indices tracking these specified stocks will also start to move downward.

Therefore, during these times, market trends are more likely to be heading down & you as a trader should also adjust your strategy accordingly to suit the prevailing downwards trends of the stock index which you're trading.

Contracts & Specs

Margin Requirement Per 1 Lot - £ 70

Value per Pips - £ 0.1

Note: Even though general and overall trend is generally move upwards, as a trader you have to consider & factor in daily price volatility, on some of the days the Indices might move in a range or even retrace & pull back, the market retracement/correction move might also be a large one at times & therefore you as a trader you need to time your trade entry strictly using this trade strategy: strategy & at same the time use proper and appropriate money management techniques and guidelines just in case of unexpected market volatility. About equity money management strategies in indices tutorials: What's Stock Index equity money management guidelines and rules & Indices equity management strategies.

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