The SX 50 Stock Index
SX 50 represents the trend movement of top 50 Blue Chip Stocks in EuroZone. These stocks are picked from the most lucrative sectors of EuroZone economy. These Top 50 Stocks are picked from a variety of Euro Zone countries. These 50 stocks are the most traded stocks in the EuroZone. The countries that Included are 12 in total and these are:
- Germany
- Netherlands
- France
- Belgium
- Spain
- Portugal
- Finland
- Italy
- Ireland
- Austria
- Luxembourg Greece
The SX 50 is represented on a chart as a Financial Instrument just like currencies and stocks, & this Index trade chart can be traded just like forex currency charts.
The SX 50 trade chart movement can be analyzed using technical analysis and other indicators can be placed on this Index Trade Chart.
The SX 50 Trade Chart
The SX 50 trade chart is displayed and illustrated below. On the example below this financial instrument is named as SX50CASH. As a trader you want to find a broker that provides this SX 50 trade chart so that you can start to trade it. The example below is of SX 50 on the MT4 Software.
Just as currencies a trader can use their own strategy or trading system to trade these stock index the same way that they trade currencies. Traders can even use their Expert Advisors to trade these Indices.
Other Trading Information about the SX 50 Index
Market Time - 0900 - 1800 Central Estern Time
Official Symbol - SX5E or SX5E:IND
The 50 components stocks that makes up SX 50 are revised once every year to determine if to change this composition or not.
Indices Trading Strategy For Trading SX 50 Index
SX 50 is comprised of blue chip stocks picked from the best performing sectors in the EuroZone: therefore a good trading strategy to trade the SX 50 is to trade long most times. This is because in general the best stocks in Europe will generally keep heading up & up because the companies behind these stocks are the best & most lucrative companies in Europe.
The SX 50 is also revised every year so that if one stock isn't doing well then it's replaced with another stock that's doing good. This ensures that most times the SX 50 will keep going upward.
As a trader you want to be biased and keep buying as the stock index moves up. When the European economies are doing well this upward trend is more likely to be ruling. A good trading 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 reporting lower profits and therefore the stock index tracking these particular stocks will also begin to move downwards.
Therefore, during these times stock index trends are likely to be heading downward and as a trader you should also adjust your strategy accordingly to suit the prevailing downwards trends of the stock market index that you are trading.
Contracts Specifications
Margin Required Per 1 Lot - € 40
Value per 1 Pips - € 0.1
NB: Even though the general trend is generally upward, as a trader you have to factor in the daily market volatility, on some days the stock index might oscillate or even retrace, stock index market retracement might also be significant at times and therefore as a trader you need to time your entry precisely using this trading strategy: Stock indices trading strategy & at same time use proper money management rules just in case of more unexpected volatility in the market trend. About money management rules in stock indices trading topics: What is index trading money management & stock indices trading money management strategies.
