What is FTSEMIB40 Trade Strategy? - Tutorial to Trading FTSEMIB40 Stock Index
The FTSEMIB40 Index Trade Chart
The FTSEMIB40 Stock Index chart is displayed and portrayed above. On the above example this instrument is named IT 40CASH. As a trader you want to find a broker that provides FTSEMIB40 Stock Index chart so that you as a trader can start to trade it. Example displayed above is of FTSEMIB40 Stock Index on the MT4 Forex Software.
Strategy of Trading FTSEMIB40 Index
FTSEMIB40 Stock Index generally upwards over long-term because the stocks choosen represent best sectors in the Italian economy hence in general this index will keep heading up over time - because these sectors will be doing good business.
As a trader wanting to trade this stock index, you want to be more biased towards upward trend direction of this stock index.
As a trader you want to buy as the index moves upwards. When the Italian economy is performing good (most times it's performing good) this upwards trend is more likely to be in-favor. A good indices trade strategy would be to buy dips.
During Economic SlowDown and Recession
During economic slowdown and recession times, companies start to report lower profits and lower growth prospect. It is due to this reason that traders start to sell stocks of companies which are reporting lower profits and therefore the Indices tracking these specified stocks also will begin to move downwards.
Hence, during these times, trends are likely to be heading downwards & you as a trader should also adjust your trade strategy accordingly to suit the prevailing downwards trends of the index that you are trading.
Contracts & Specifications
Margin Required Per One Lot - € 250
Value per Pips - € 1
Note the pip value of IT 40CASH is € 1 compared to the size of other indices such as Germany DAX & EURO STOXX whose size of 1 pip per lot is € 0.1 - However, average pip movement for this index is much lower as compared to other stock indexes such as DAX30 and EURO STOXX.
NB: Even though general trend is generally moves upwards, as a trader you have to consider & factor in the daily market volatility, on some of the days the Indices may oscillate or even retrace & pullback, market pull back move may also be a significant one at times & hence as a trader you need to time your trade entry precisely using this strategy: Stock Index strategy and at same time use proper equity management principles just in case there's more unexpected volatility in the market movement. About money management methods in indices lessons: What is Stock Index money management and equity management methods.
