S&P/ASX200 Index
ASX200 Stock Index tracks top companies in Australia Stock Exchange. The total number of stocks used to calculate this stock index is the 200 top Australian companies represented in the ASX200. This Index is calculated based on capitalization of included companies & it is revised quarterly.
Even though this index is calculated based on capitalization, it does not track capitalization; it tracks the change in Indices prices of various components stocks in this stock index.
ASX200 Trading Chart
ASX200 trading chart is shown & displayed above. On the above example this instrument is named AUS 200CASH. As a trader you want to find a broker that provides ASX200 chart so that you can begin to trade it. The Indices example above is that of ASX200 Stock Indices on MetaTrader 4 Forex and Stock Indices Software.
Other Information about ASX200 Index
Official Stock Indices Symbol - AS 51:IND
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 up on which the calculated total market capitalization is adjusted relative to this base - the calculation also has a divisor that means that this Index will only reflect a change in movement only when the shares prices move up & not when market capitalization does, hence, this index show the difference in the shares 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 total change in the shares prices.
Strategy to Trading ASX200 Index
ASX200 Index will in general moves move up because shares prices always move upward over time. This Stock Index in general moves upward over long-term because Australian economy also shows strong growth backed by their mining sector which has great reserves of XAUUSD and other valuable commodities.
As a trader wanting to trade this Stock 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 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 the dips.
During Economic Slow-Down and Recession
During economic slow-down & recession times, firms start to report lower profits & lower growth prospect. It is because of this reason that investors start to sell stocks of companies that are reporting lower profits & hence Indices tracking these specified stocks will also start to move downward.
Therefore, 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 & Specs
Margin Requirement Per Lot - AUD 70
Value per Pips - AUD 0.1
Note: Even though general trend is generally move upwards, as a trader you have to consider & factor in daily market volatility, on some of the days the Indices might move in a range or even retrace and pull-back, the Indices market retracement move might also be a substantial one at times & therefore as a trader you need to mark-time your trade entry precisely using this trade strategy: strategy & at same the time use proper equity money management guidelines just in case there is more unexpected volatility in the market. About equity money management methods in indices lessons: What's Stock iindices equity money management & Indices equity money management methods.
