S&P/AS 51 Index
AS 51 Indices tracks top corporations in Australia Stock Market. The total number of stocks used to calculate this index is the 200 top Australian firms represented in AS 51. This Stock Index is calculated based on capitalization of included firms & it is reviewed quarterly.
Even though this stock index is calculated based on capitalization, it doesn't track capitalization; it tracks change in Indices prices of various component stocks in this stock index.
AS 51 Chart
AS 51 chart is illustrated & shown above. On above example this instrument is named AS 51CASH. As a trader you want to find a broker that provides AS 51 trading chart so that you as a trader can begin to trade it. The example Which is illustrated above is that one of AS 51 Stock Index on MetaTrader 4.
Other Info about AS 51 Stock Index
Indices Symbol - AS 51:IND
The 200 constituent stocks that constitute AS 51 Stock Index are selected from top performing Australian firms measured by capitalization. This Stock Index has a base up on which the calculated total market capitalization is adjusted relative to this base - the calculation also has a divisor that means that this Index will only reflect a change in movement only when the stock prices move up and not when market capitalization does, hence, this stock index show the difference in the stock prices rather than the total market capitalization. This is because the base represents the starts value of all stock prices & when this stock index is calculated it tracks the total change in the stock prices.
Strategy to Trading AS 51 Index
AS 51 Stock Index will generally moves move up because stock prices always move upward over time. This Index generally moves upwards over longterm because Australian economy also shows strong growth backed by their mining sector which has great reserves of Gold and other valuable commodities.
As a trader wanting to trade this Index, the Stock Indices will move upward faster when the Australian economic indicators show accelerated economic growth.
As a trader you want to be biased and keep buying as the index moves upwards. When Australian economy is performing good (most of the times it's performing good) this upward trend is more likely to be in place. A good stock index trade strategy would be to keep buying the dips.
During Economic Slow-Down & Recession
During economic slow-down and recession times, corporations begin to report lower profits & lower growth prospect. It's due to this reason that traders begin to sell stocks of firms that are reporting lower profits & hence Stock Indices tracking these specified stocks also will begin to move downward.
Hence, during these times, trends are likely to be moving downwards 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 Specs
Margin Requirement Per Lot - AUD 70
Value per Pips - AUD 0.1
Note: Even though general trend is generally move upwards, as a trader you've 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 pullbackretracement move might also be a significant one at times & hence as a trader you need to mark-time your entry precisely using this trading strategy and at same time use proper equity management guide-lines just in case there's more unexpected volatility in the market trend. About money management methods in indices lessons: What's stock index money management and index equity management strategies.
