What is FRA 40 Trade Strategy? - Tutorial to Trade FRA 40 Stock Index

The FRA 40 Trade Chart

The FRA 40 trade chart is displayed & illustrated and shown above. On the example above this is named as FRA40CASH. As a trader you want to find a broker that provides FRA 40 trade chart so that you can begin to trade it. The example above is of FRA 40 on MT4 Forex & Indices Trading Platform.

Strategy for Trading FRA 40 Index

FRA 40 tracks capitalization of the top 40 companies in France. This index in general moves upward over the long-term because French economy also shows strong growth.

As a trader you want to be biased & keep buying as the index moves upward. When French economy is doing well most of these top stocks will continue to move up and therefore this stock index will also move in an upwards trend. A good trade strategy would be to keep buying the dips.

During Economic Slow-Down & Recession

During economic slow-down & recession times, companies begin to report lower profits & lower business growth prospects. It is because to this reason that investors begin to sell stocks of companies reporting lower profits & therefore index tracking these particular stocks will also start to move downward.

Therefore, during these times index trends are likely to be moving downwards & as a trader you should also adjust your trading strategy accordingly to fit the prevailing downward trends of the stock market index that you're trading.

Contracts & Specifications

Margin Requirement Per 1 Lot - € 40

Value per 1 Pips - € 0.1

NB: Even though general trend is generally upward, as a trader you've to factor in daily market volatility, on some days the index might oscillate or even retrace, index market retracement may also be significant at times & therefore as a trader you need to time your entry precisely using this trade strategy: Indices trade strategy & at the same time use proper money management rules just in case of more unexpected volatility in the market trend. About stock index money management rules courses: What is index money management and index money management methods.