Investing In Indices – How To Start And What Can You Trade?

Have you ever wondered how to invest in the US economy but were unable to do so? Have you at some point sought a financial asset that would cover a wider range of the market to make it easy for you to predict? Well, investing in indices offers all these opportunities and a lot more. This work will guide you on how to start trading indices with your preferred broker. You will also find in this work the list of the most popular indices pairs traded today.

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What Are Indices?

Indices are financial instruments used to track the performance of a group of stocks or other securities. Generally, index pairs derive their values from the securities they track their performance. The fact that indices are combinations of multiple assets put together as one; makes them very volatile to trade today. Indices are largely traded  as CFDs.

Guide On How To Trade Indices

  • Select a broker: Indices are largely offered for trading by forex brokers. Hence, anyone who seeks to trade Indices will need to select a reputable broker offering his preferred indices.
  • Register an account with the broker: To trade with any chosen broker, the new trader needs to sign up for an account with the selected broker. Registering an account and completing the identity verification process gives one access to trade Indices on the broker’s platform.
  • Fund your trading account: After successful registrations, the trader is required to deposit some funds into his account to begin trading. Brokers often provided multiple options for funding to make it easy for the trader to do so.
  • Choose your preferred Index: Often brokers provide an assortment of the most popular indices for the trader to make his choice. The trader is expected to make his choice from the list of Indices made available on the broker’s platform.
  • Place your order: Here, the trader needs to decide whether to go long or short on any chosen indices. Also, he would have to set his stoploss and take profits target.

Where Can One Trade Indices?

Indices are offered for trading by various forex brokers. To trade FTSE100 you will need to find out which broker offer FTSE100 Index. To assist you in doing so, we have provided the list of ten best brokerage platforms for trading Indices today.

List Of Ten Best Brokers For Trading Indices

  • eToro
  • ATFX
  • XTB
  • Pepperstone
  • Plus 500
  • Hantec Markets
  • FXTM
  • com
  • HotForex
  • ICMarkets

List Of Most Popular Indices To Trade Today

  • S&P 500 (US 500) – This index tracks the value of the 500 largest US companies by market capitalization.
  • DJIA (Wall Street) – this index tracks the performance of the 30 largest blue-chip stocks in the US stock market.
  • DXY – This index known as the dollar index tracks the performance of the six major currencies such as the British pound, euro, Japanese yen,  Swedish krona, Swiss franc, and Canadian dollar against the US dollar.
  • Germany 40 (DAX) – this index measures the performance of the 40 largest companies listed on the Frankfurt Stock Exchange Market.
  • NASDAQ 100 (US100) – this index tracks the performance of the 100 largest companies in the US based on their market capitalization.
  • FTSE 100 – this index tracks the performance of the 100 most valuable companies listed on the London Stock Exchange based on their market capitalization.

Advantages Of Trading Indices

  • Offers wide exposure to the market
  • Easy to master compared to other pairs.
  • High leverage is offered for trading
  • Offers the opportunity to hedge one’s position
  • Highly volatile and suitable for scalpers

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