FTSE100 Stock Index

FTSE - Financial Times Bourse, the FTSE100 index represents the Stock Indices of top 100 largest companies in UK that are shown in London Stock Market. The calculation of this stock index incorporates stocks that are determined quarterly. These stocks included in the FTSE100 Index represent 80% of total market value of the London Bourse shown companies.

Because the FTSE100 Stock Index tracks 100 firms the stock index will be more volatile as compared to an stock index such as Germany DAX30 which only tracks 30 firms.

Strategies for Trading FTSE100 Indices - FTSE Diagram

FTSE100 Chart

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

Other Information about FTSE100 Stock Index

Official Indices Symbol - UKX:IND

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

Strategy to Trading FTSE100 Index

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

As a trader wanting to trade this Index, the general market direction at any given time will be more bullish than bearish. This is because as long as the 100 corporations being tracked are doing good business, then their share value will keep going up, & therefore this index will also keep heading in an upward 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 more than likely to be ruling. A good stock index trade strategy would be to keep buying the dips.

During Economic Slow-Down and Recession

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

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

Contracts & Specs

Margin Requirement Per Lot - £ 70

Value per Pips - £ 0.1

Note: Even though general trend is generally move upwards, as a trader you have to consider & 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 might also be a substantial one at times & therefore as a trader you need to mark-time your trade entry precisely using this trade strategy: strategy & at same the time use proper equity money management guidelines just in case there is more unexpected volatility in the market. About equity money management strategies in stock indices tutorials: What's Stock Index equity money management & Indices equity management strategies.

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