What is SMI20 Strategy? - Guide for SMI20 Index
The SMI20 Trade Chart
The SMI20 chart is displayed & shown above. On above example this Index is named SWI 20CASH. As a trader you want to find a broker that provides SMI20 trade chart so that you can start to trade it. Example displayed above is of SMI20 Stock Index on MT4 Forex & Stock Indices Platform.
Strategy for SMI20 Stock Indices
The SMI20 Stock Indices tracks capitalization of top 20 companies in Switzerland. This Index generally moves upward over long term because Swiss economy also shows strong growth. Swiss also has one of the strongest banking system in the globe - making Swiss economy one of the most reliable economy.
As a trader you want to be biased and keep buying as the index moves upwards. When Swiss economy is performing good most of these top stocks will continue moving up & therefore this stock index also will move in an upwards trend. A good stock indices trade strategy would be to buy the dips.
During Economic Slow-Down & Recession
During economic slow-down and recession times, companies start 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 trading strategy accordingly to suit the prevailing downward trends of the stock index that you're trading.
Contracts and Specifications
Margin Requirement Per Lot - CHF 100
Value per Pip - CHF 0.5
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 stock index money management rules courses: What is Index equity management and Stock Indices money management methods.
