What is UK100 Strategy? - Guide to Trade UK100 Index
The UK100 Stock Index Trade Chart
The UK100 Indices chart is displayed and illustrated above. On example above the stock index is named UK 100CASH. As a trader you want to find an online broker that provides UK100 trading chart so that you can start to trade it. Example displayed above is of UK100 Stock Index on MT4 FX Trading Platform.
Strategy for Trading UK100 Stock Indices
The UK100 Stock Index shows relative movement of the top 100 stocks in UK. In general the share size of top 100 companies will keep heading upwards, therefore this index also will over time keep heading upwards. Should a company not meet the required growth targets, the company will be removed from the & replaced with an alternative company that has better growth prospects.
As a trader wanting to trade this stock index, the general direction at any given time will be more bullish than bearish. This is because as long as the 100 companies being tracked are doing good business, then their share value will keep moving upwards, and hence this index will also keep heading in an upward trend.
As a trader you want to be biased and keep buying as the index moves upwards. When UK economy is performing good (most of the times it's performing good) this upward trend is more likely to be in-favor. 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 Indices tracking these specified stocks will also 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 - £ 70
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 and pull-back, the market retracement move may also be a significant one at times & hence as a trader you need to time your entry precisely when using this trading strategy: Stock 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 Index equity management and Stock Indices equity management strategies.
