What is SMI20 Trade Strategy? - Tutorial to Trading SMI20 Stock Index
The SMI20 Stock Index Trade Chart
The SMI20 Stock Index chart is shown & displayed above. On the above example this Index is named SWI 20CASH. As a trader you want to find a broker that provides SMI20 Stock Index chart so that you as a trader can begin to trade it. Example displayed above is of SMI20 Stock Index on the MT4 Forex Software.
Strategy for SMI20 Index
SMI20 Stock Index tracks capitalization of top 20 companies in Switzerland. This Stock Index generally upwards over long-term because the Swiss economy also shows strong growth. Swiss also has one of the strongest bank system in the globe - making Swiss economy one of the most solid economy.
As a trader you want to be biased & keep buying as the stock index moves upwards. When the Swiss economy is performing good most of these top stocks will continue moving up & therefore this index will also move in an upward trend. A good indices trade strategy would be to buy the dips.
During Economic SlowDown and Recession
During economic slowdown & recession times, companies begin to report lower profits & lower growth prospect. It is due to this reason that traders begin to sell stocks of companies which are reporting lower profits & therefore the Stock Index tracking these specified stocks will also start to move downwards.
Hence, during these times, market trends are likely to be heading downwards & you as a trader should also adjust your trade strategy accordingly to suit the prevailing downward trends of the stock index that you're trading.
Contracts and Specifications
Margin Required Per One Lot - CHF 100
Value per Pips - CHF 0.5
NB: Even though general trend is generally moves upwards, as a trader you have to consider and factor in the daily market volatility, on some of the days the Stock Index might 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 & at same time use proper money management rules just in case there's more unexpected volatility in the market movement. About equity management strategies in stock indices topics: What is Index equity management & money management strategies.
