S&P/ASX200 Index

ASX200 Stock Index tracks top companies in Australia Bourse. The total number of stocks used to calculate this index is the 200 top Australian companies represented in the ASX 200. This Index is calculated based on capitalization of included companies & it is revised quarterly.

Even though this index is calculated based on capitalization, it doesn't track capitalization: it tracks the change in Indices prices of various components stocks in this stock index.

ASX200 Indices - What is ASX200?

ASX200 Trading Chart

ASX200 trading chart is illustrated and displayed above. On the above example illustration this financial instrument is named AUS 200CASH. As a trader you want to find a broker that provides ASX200 chart so that you as a trader can begin to trade it. The Indices example above is that of ASX200 Index on MetaTrader 4 Forex and Indices Software Platform.

Other Information about ASX200 Index

Official Stock Index Symbol - AS51

The 200 component stocks that makes up the ASX200 Index are selected from top Australian companies measured by capitalization. This Stock Index has a base upon which the calculated sum total market capitalization is adjusted in relation to this base - the calculation also has got a divisor that means that this Index will only show a change in movement only when the stocks prices move and go up & not when market capitalization does, hence, this index show the difference in the securities prices rather than the total market capitalization. This is because the base represents the starts value of all shares prices & when this stock index is calculated it tracks the overall change in shares prices.

Strategy to Trading ASX200 Index

ASX200 Index will in general move up because stocks prices always move upward over time. This Stock Index in general moves upward over long-term because the Australia economy also shows robust growth backed up by their mining industry which has great reserves of XAUUSD and other valuable commodities.

As a trader wanting to trade this Index, the Indices will move upwards faster when the Australian economic indicators show accelerated economic growth.

As a trader you want to be biased and keep buying as the stock index moves upward. When Australian economy is doing well (most of the times it is doing well) this upwards trend is more than likely to be ruling. A good stock index trade strategy would be to keep buying and buy the dips.

During Economic Slow-Down and Recession

During economic slow-down & recession times, companies start to report lower profits & lower growth prospect. It is due to this reason that investors start to sell stocks of companies that are reporting and recording lower profits & hence Indices tracking these specified stocks will also start to move downward.

Therefore, during these times, market trends are much more 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 which you're trading.

Contracts & Specs

Margin Requirement for 1 Lot - AUD 70

Value per Pips - AUD 0.1

Note: Even though general and overall trend is generally move upwards, as a trader you have to consider & factor in daily market price volatility, on some of the days the Indices might move in a range or even retrace and retracement, the Indices market retracement move might also be a substantial one at times & hence as a trader you need to time your trade entry accurately using this trade strategy: strategy & at the same time use the proper & appropriate equity money management rules and guidelines just in case there's unexpected volatility in the market. About equity money management methods and techniques in indices learning lessons: What's Stock equity money management guidelines/rules & Indices equity money management system/plan.

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