The SX5E Index

The SX5E Index shows movement of the top 50 Blue Chip Stocks in EU Zone. These stocks are selected from most lucrative business sectors of the EU Zone economy. The Top 50 Stocks are also chosen from a variety of Euro-Zone countries. These 50 stocks are the most liquid stocks in EuroZone. The countries Included are 12 in total & these are:

Germany
France
Netherlands
Portugal
Spain
Belgium
Finland
Italy
Austria
Greece
Ireland
Luxembourg

The SX5E Index is represented on a chart as a Financial Trading Instrument just like the currencies and stocks, and this trading chart can be transacted just like fx charts.

The SX5E Index chart movement can be interpreted using technical analysis and other indicators which can be added on this trading.

The SX5E Index Chart

The SX5E chart is displayed & shown below. On example laid-out below this instrument is named SX5ECASH. As a trader you want to find a broker that provides SX5E Index chart so that you as a trader can start to trade it. Example shown and displayed below is of SX5E Indices on MT4 Forex Platform.

SX5E Index Strategies - Example SX5E Trade Strategy

Just as currencies, a indices 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(EAs) to trade these Indices.

Other Details about SX5E Indices

Market Time - 0900 - 1800 CET

Official Indices Symbol - SX 5E or SX5E

The 50 components stocks which constitute SX5E Index are re-evaluated once each year to figure out if to make changes to this composition or not.

Trading System For Trading SX5E Index

The SX5E 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 SX5E Index is to trade long majority of the times. This is because generally the best stocks in Europe will in general keep moving and heading up & up because the companies behind these stocks are among some of the best and most profitable companies in Europe.

The SX5E Index is also re-evaluated yearly so that as if one Indices isn't doing good then it's replaced with an alternative Indices that is doing good. This ensures that most of the times SX5E Index will keep heading upwards.

As a stock index trader you want to be biased and keep on buying as the index heads & moves upwards. When the European based economies are performing well this upward market trend is more likely to be the one that is currently in place. A good stock indices strategy would be to buy price dips.

During Economic Slow-Down and Recession

During economic slowdown & recession times, corporations begin and start reporting lower earnings, lower profits and lowers growth projections. It is due to and because of this reason that investors start to sell stocks of companies which are reporting & posting lower profits and therefore Indices tracking these specified stocks will also start and begin to move downwards.

Hence, during these times, market trends are a lot more 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 which you as a trader are trading.

Contract Specifications

Margin Requirement for 1 Lot - € 40

Value per Pip - € 0.1

Note: Even though general and overall trend is generally move upwards, as a trader you've got to consider and factor on daily market price volatility, on some of the days the Indices might move in a range or even retrace & retracement, the market pullback/retracement move might also be a big one at times and therefore as the trader you need to time your trade entry strictly when using this strategy: indices strategy & at the same time use the proper/appropriate money management techniques & guidelines just in case there is more unexpected volatility in the market movement. About money management methods and guidelines in Indices topics: What is money Indices management & indices equity management strategies.

More Lessons: