What is IT40 Strategy? - Guide to Trade IT40 Index
The IT40 Stock Index Trade Chart
The IT40 Indices chart is displayed and illustrated above. On above example this instrument is named IT 40CASH. As a trader you want to find a broker that provides IT40 chart so that you can begin to trade it. Example displayed above is of IT40 Stock Index on MT4 FX Trading Platform.
Strategy for Trading IT40 Stock Indices
The IT40 Stock Indices generally upward over long term because stocks choosen represent best sectors in Italian economy therefore in general this stock index will keep heading up over time - because these sectors will be doing good business.
As a trader wanting to trade this stock index, you want to be more biased toward upward trend direction of this stock index.
As a trader you want to keep buying as the index moves upwards. When Italian economy is performing good (most of the times it's performing good) this upwards trend is more likely to be in-favor. A good indices trade strategy would be to buy the dips.
During Economic Slow-Down and Recession
During economic slow-down & recession times, companies begin to report lower profits & lower growth prospect. It is due to this reason that investors begin to sell stocks of companies which are reporting lower profits & therefore Stock Indices tracking these specified stocks also will begin to move downward.
Hence, during these times, market trends are likely to be moving downward and you as a trader should also adjust your strategy accordingly to suit the prevailing downwards trends of the index that you are trading.
Contracts & Specifications
Margin Requirement Per Lot - € 250
Value per Pip - € 1
Note pips size of IT 40CASH is € 1 compared to the size of other stock indices such as Germany DAX and EURO STOXX whose size of 1 pip per lot is € 0.1 - However, the average pips movement for this index is much lower as compared to other stock indexes such as DAX30 & EURO STOXX.
Note: Even though general trend is generally moves upward, as a trader you've got to consider & factor in daily market volatility, on some of the days the Stock Indices may move in a range or even retrace & pull-back, the Indices market retracement move might also be a significant one at times & hence as a trader you need to time your entry precisely when using this strategy: stock indices strategy & at same time use proper equity management principles just in case there's more unexpected volatility in the market movement. About Stock index money management rules courses: What is stock index money management & Indices equity management strategies.
