The SX5E Index
The SX5E 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 and 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 Instrument just like currencies and stocks, & this trading chart can be traded just like forex charts.
The SX5E Index chart movement can be analyzed using technical analysis & other indicators can be placed on this Chart.
The SX5E Index Chart
The SX5E chart is displayed & shown below. On example below this trading instrument is named SX 5ECASH. As a trader you want to find a broker that provides SX5E Index chart so that you can start to trade it. Example displayed below is of SX5E 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 SX5E Stock Indices
Market Time - 0900 - 1800 CET
Official Stock Indices Symbol - SX 5E or SX 5E:IND
The 50 components stocks which constitute SX5E Index are re-evaluated once each year to determine if to make changes to this composition or not.
Trade 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 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 SX5E 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 SX5E 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 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 start 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.
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 might move in a range or even retrace and 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: indices strategy and at same time use proper money management guidelines just in case there's more unexpected volatility in the market movement. About money management methods in Indices topics: What is money Stock Indices management & stock indices equity management strategies.
