UK100 Index
UK100 - Financial Times Stock Exchange Market, the UK100 stock index represents the Indices of top 100 biggest companies in UK that are displayed in London Stock Market. The calculation of this stock index incorporates stocks which are determined quarterly. These stocks included in UK100 Index represent 80% of total market value of the London Stock Exchange Market shown corporations.
Because the UK100 Indices tracks 100 companies the stock index will be more volatile as compared to an index such as Germany DAX30 which only tracks 30 companies.
The UK100 Chart
The UK100 Stock Index chart is displayed & shown above. On above example the index is named UK 100CASH. As a trader you want to find an online broker that provides UK100 chart so that you can begin to trade it. Example displayed above is of UK100 Indices on MetaTrader 4 Forex TradeSoftware.
Other Details about UK100 Stock Index
Stock Index Symbol - UKX:IND
The 100 components stocks which constitute UK100 Stock Index are chosen from the best performing United Kingdom companies. The UK100 share stock index is closely followed as an indicator of the prosperity of UK businesses. The constituents that make up this index are re-evaluated quarterly. The calculation of this index is a simple formula based on market capitalization.
Trading Strategy for Trading UK100 Index
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 moving upwards, therefore this stock index will also over time keep heading upwards. Should a company not meet the required growth targets, the company will be removed from the and replaced with an alternative company that has better growth prospects.
As a trader wanting to trade this Stock Index, the general market 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 upwards trend.
As a trader you want to be biased & keep buying as the index moves upwards. When UK economy is performing good (most of the times it's performing good) 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 begin to sell stocks of companies which are reporting lower profits & therefore Stock 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 - £ 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 Stock Indices may move in a range or even retrace & pull-back, the Indices 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: 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 money Stock Index management & stock indices money management strategies.
