INDICES TRADING

The first index was created in 1885, by Dow Jones and co-founder Charles Dow, summing the prices of the compounded companies and dividing it by the number of companies. This is very simplistic considered nowadays, but back in time, it revolutionized the market more than 100 years ago, and brought into light a new financial instrument.

Nowadays, indices use different ways to define their price, which can be categorized in two groups: Market value weighted indices, which are calculated based on the total market value of the compounded companies. The bigger the company, the larger the impact.

The classic examples are FTSE and DAX. Price weighted Indices, which are calculated based on the company share price. So, companies with higher share prices have more impact on the overall performance of the index compared to other companies with lower share price.

UK100

It contains the biggest companies regulated by UK business law. Not all of the companies are based in the UK. The price is calculated in real time and published moment after moment during the time the market stays open. The companies which compounded the index come from energy, financial services, mining, pharmaceutical and oil & gas industries.

GER30

This index is called differently DAX 30, and contains the top 30 German companies based on their market capitalization. This index is one of the most traded indices in the world because of its high volatility.

S&P 500

Some of the most wanted commodities are produced in regions and countries which are experiencing turbulent time on their political issues. For example, crude oil is massively produced in countries around the Middle East, meaning that the price of Brent Oil and WTI can be heavily influenced by the political tensions that historically have happened in that region. For example, if any producing country is sanctioned, it usually cuts off the supply, so for the same demand, the price goes up.

US 30

This index is widely known as the Dow, and is so far the most recognizable stock index in the world. It is composed of 30 companies from 9 crucial market sectors. It is a price-weighted average and its price fluctuations are used to measure the economy's health and performance around the globe.

WHY TRADING INDICES WITH 5Markets?

Using market data is your greatest weapon. When trading Indices, economic data will be crucial to analyse the current ‘health’ of the asset. Future price movements can be predicted based on accurate technical analysis of the historical prices and by taking into consideration news and financial events. So, using an economic calendar can be incredibly beneficial for you, as long as it allows you to know the economic events which will happen for sure on an exact day.

If you trade american stocks/indices, you better take a look on major data released from the US such as, non-farm payroll data, unemployment figures, Federal Reserve rate decisions, inflation data and any other financial report which would influence the market sentiment.

Our trading conditions are transparent, written in the account types section, and legal regulations also. For any additional questions you will have a dedicated conversation with your personal account manager, who will be by your side during the time you are trading with us. When you choose indices as your trading assets, you are accessing global financial markets, international companies which reflect the dynamic of the global economy. If one of the companies fails, the index price still can go up. The risk of bankruptcy is zero for indices, because if a DAX 30 compounding company goes bankrupt, it will be replaced by the 31st company listed in the leading German companies.

LIVE INDICES DATA

WHAT SORT OF TRADER ARE YOU?

Beginner Trader

Is it the first time you are facing financial markets? Well, go with one of the accounts, tailored for beginner traders. You can start with $ 250 as a minimum, or any amount up to $ 2,500, so you take advantage of what a beginner account provides you with.

Intermediate Trader

Do you have a couple of years in financial markets and have some basic knowledge and experience? We provide a tailored account for this category starting with a minimum investment of $ 2,500 up to $ 25,000. Enjoy additional trading privileges coming along with higher investments.

Advanced Trader

For any professional trader and investor, we provide privileges for people who trade daily for many years now, advanced accounts are serving trading services and standards which will put your experience in a higher level, and make you expand your expertise and knowledge.

MAIN CONCEPTS ABOUT INDEX TRADING

Slippage

There are two excellent risk management tools, stop loss and take profits. Combine it with correct position sizing, account sizing and market volatility. If the market should be trading at a different level from the stop-loss level at that precise moment of execution then the stop may be filled at a better or worse price. This is known as slippage.

Long & Short

To go long is to buy, or to believe that the price will be appreciated in the future, so you buy now, at a lower price. To go short is to sell, or to believe that the price will be depreciated, so you sell the asset to cut the losses.

Technical and fundamental

Technical analysis involves the use of charts to better understand market behaviour and ascertain probability as well as the risk-to reward trade off. Fundamental analysis involves the interpretation of news flow and how new information can affect the pricing of markets.