What is IT 40 Trade System? - Learn Trading IT 40 Stock Index
The IT 40 Trade Chart
The IT 40 trade chart is displayed and illustrated above. On the example above this financial instrument is named as IT40CASH. As a trader you want to find a broker that provides this IT 40 trade chart so that you can start to trade it. The example shown above is of IT 40 on the MT4 Software.
Indices Trading System for IT 40 Index
IT 40 Stock index generally moves up over longterm because the stocks picked represent best sectors in the Italian economy therefore 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 index, you want to be more biased towards the upward trend direction of this stock index.
As a trader you want to keep buying as the stock index moves up. When the Italian economy is doing well (most times it's doing well) this upward trend is more likely to be ruling. A good stock index 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 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 - € 250
Value per 1 Pips - € 1
Note the pip value of IT40CASH is € 1 compared to the value of other stock indices such as Germany DAX & EURO STOXX whose value of 1 pip per lot is € 0.1 - However, average pip movement for this stock index is much lower as compared to other indexes such as the DAX 30 & EURO STOXX.
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 stock index trading money management rules topics: What is stock index money management & stock indices trading money management strategies.
