Why trade indices?

One of the biggest benefits of trading indices is the ability to avoid stock risk. Traditionally if you buy a single stock, you are invested in just one, and your entire investment position is exposed to the volatility of just one company’s stock. By trading indices, you mitigate this risk as the index performance is based on a "basket" or group of companies' stock, instead of just one single company stock

Due to the high trading threshold, stock index trading usually requires a large investment amount, while stock index CFDs allow traders to trade smaller contracts, so they can buy a basket of stocks at lower capital requirements and easily enter the investment arena.

It is not the case that you may buy a stock only when the market is predicted to rise. With index CFDs, you have the ability to go both 'long' and 'short', meaning you can take advantage of the stock indices prices rising or falling.

How to trade indices?

One of the most popular ways to trade indices is via Contracts for Differences or CFDs. These financial instruments allow traders to profit both from falling or rising prices; open a short (sell) position if you think the index will fall; open a long (buy) position, if you think an index will rise.

Trading indices is simple with Mitrade!

Simply, create an account and log in. If you don't have an existing account with us, you can register here.

Select the index you want to trade; choose among popular indices in the US, Europe, Asia, and Australia, such as the Australia 200, NAS100, Hong Kong 50, Germany 30, etc.

Decide on the direction of the market. Choose to either do a buy (long) or sell (short) position.

Set your exit points; Take profit (TP), and Stop Loss (SL). Monitor your trade!

What index should I choose to trade?

Before choosing a stock index for trading, you should first understand the similarities and differences between different markets, basic economic conditions related to stock indices, national policy changes, monetary policy directions, and other fundamental factors. You also need to understand technical changes in the stock index, bull and bear cycles, etc. If you are familiar with some stocks, or a country's economic conditions, you may choose to trade the local stock index. Or you can assess which market is more suitable for you based on the average daily trading volume of the stock market related to the stock index.

These are some popular indices that are traded globally.

• US30 (Dow Jones Industrial Average) - one of the oldest and best-known stock market indexes in the world, the DJIA tracks the price of 30 large, publicly traded US companies.
• SPX500 (S&P500) - A basket of the 500 largest US stocks, representing around 80% of total US market capitalization.
• EU50 (EURO STOXX 50) - Includes the 50 largest blue-chip companies in the Eurozone.
• NAS100 (Nasdaq 100) - featuring more than 100 of the largest publicly-traded non-financial businesses on the Nasdaq composite index.
• UK100 (FTSE 100) -  the top 100 stocks trading on the London Stock Exchange, many FTSE 100 companies are globally focused and earn revenue outside the UK, therefore it does not closely follow the UK economy.
• JPN225 (Nikkei 225) - Japanese index based on the market capitalization of the top 225 companies traded on the Tokyo Stock Exchange (TSE).
• HK50 (Hang Seng Index) -50 largest companies by market capitalization on the Hong Kong stock market.
• AUS200 (ASX 200) - Australia’s primary benchmark index, tracking the top 200 stocks on the Australian Securities Exchange.