The SX 50 Index
The SX 50 Index shows movement of the top 50 Blue Chip Stocks in Euro Zone. These stocks are chosen from the most profitable sectors of EuroZone economy. The Top 50 Stocks are also selected from a variety of EuroZone countries. These 50 stocks are the most liquid stocks in Euro Zone. The countries Included are 12 in total & these are:
- Germany
- France
- Netherlands
- Portugal
- Spain
- Belgium
- Finland
- Italy
- Austria
- Greece
- Ireland
- Luxembourg
The SX 50 Index is represented on a chart as a Financial Instrument just like currencies and stocks, and this chart can be traded just like forex charts.
The SX 50 trading chart movement can be analyzed using technical analysis & other indicators can be placed on this Chart.
The SX 50 Chart
The SX 50 Stock Indices chart is displayed & shown below. On example below this trading instrument is named SX50CASH. As a trader you want to find a broker that provides SX 50 trading chart so that you can start to trade it. Example displayed below is of SX 50 Indices on MetaTrader 4 Forex TradeSoftware.
Just as currencies, a trader can use their own strategy or trading system to trade these Indices the same way that they trade currencies. Traders can even use their Expert Advisors to trade these Indices.
Other Details about SX 50 Stock Indices
Market Time - 0900 - 1800 CET
Official Symbol - SX 5E or SX 5E:IND
The 50 components stocks which constitute SX 50 Index are re-evaluated once each year to determine if to make changes to this composition or not.
Trading Strategy For Trading SX 50 Index
The SX 50 Index is made up of blue chip stocks choosen from the top performing sectors in the Euro Zone: therefore a good indices trade strategy to trade SX 50 Index is to trade long most times. This is because generally the best stocks in Europe will generally keep heading up & up because the corporations behind these stocks are the best & most lucrative corporations in Europe.
The SX 50 Index is also revised yearly so that if one Indices isn't doing well then it's replaced with an alternative Indices that's doing good. This ensures that most times SX 50 Stock Index will keep moving upwards.
As a trader you want to be biased and keep buying as the index moves upwards. When European economies are doing well 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 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 are trading.
Contract 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 may move in a range or even retrace & pull-back, the market retracement move might also be a substantial one at times and therefore 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 equity management strategies in stock indices tutorials: What is stock index money management & index equity management strategies.
