S&P/ASX 200 Index

ASX200 stock index keeps track of top firms in the Australian Stock Market. The total number of stocks used to calculate this index is the 200 top Australian corporations represented in ASX 200. This index is calculated based on the capitalization of included corporations & it's reviewed quarterly.

Even though this stock index is calculated based on the capitalization, it does not track capitalization: it tracks change in the stock prices of the various constituent stocks in this index.

S&P ASX 200 - ASX 200 Index

The ASX200 Chart

The ASX 200 trade chart is displayed and illustrated and illustrated above. On example illustration revealed above this financial instrument is named as AUS200CASH. As a trader you want to find a broker that provides this ASX 200 trade chart so that you can begin to trade it. Example displayed and shown above is of ASX-200 on the MetaTrader 4 Forex and Index Software.

Other Trading Information about the ASX 200 Index

Official Symbol - AS51:IND

The 200 constituent stocks which constitute ASX200 are chosen from the top Australian corporations measured by capitalization. This stock index has got a base upon which the sum total market capitalization is adjusted in relation to this base - the calculation formula also has got a divisor which means that the stock index will only reflect a change in the movement only when the stocks prices go up and not when the market capitalization does, therefore, this index show the difference in the shares prices rather than the total market capitalization. This is because the base represents the starts size of all stocks prices and when this stock index is calculated it tracks the total change in the stocks prices.

Strategy for Trading/Transacting the ASX 200 Index

ASX200 will in general move up because stocks prices always move up over time. This stock index generally moves up over long-term because Australian economy also shows strong and robust growth backed up by their mining sector/industry that has got great reserves of Gold & also other valuable commodities.

As a trader wanting to trade this stock index, index 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 up. When the Australian economy is doing good (most times it's performing good) this upward trend is more likely to be in-favor. A good indices trade strategy would be to buy dips.

During Economic SlowDown and Recession

During economic slowdown & recession times, companies start to report lower profits & lower growth prospect. It is due to this reason which investors start to sell stocks of firms reporting lower profits & hence the index tracking these particular stocks will also begin to move downwards.

Hence, during these times indices trends are likely to be heading downwards and as a trader you should also adjust your trading strategy accordingly to suit the prevailing downward trends of the stock market stock index that you're trading.

Contracts & Specifications

Margin Required Per Lot - AUD 70

Value per Pip - AUD 0.1

NB: Even though the general trend is in general moves upward, as a stock index trader you have got to factor in the daily market volatility, on some days the stock index may move in a range or even pull back, market retracement might also be significant at times and hence as a trader you need to time your entry strictly when using this strategy: strategy & at same time use proper equity management guidelines just in case of more unexpected volatility in the market movement. About equity management guidelines in stock index tutorials: What is stock index money management & index equity management methods.

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