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Success in Trading Stock Indexes




      www.ProfitableTradingTips.com
To see a complete version of this presentation and
     to obtain our free EBook follow this link:
 http://portal.sliderocket.com/BLOUC/Success-in-
               Trading-Stock-Indexes

Read the Forex Conspiracy Report for insights into
   trading foreign currencies. Get your copy at
http://portal.sliderocket.com/BLOUC/Success-in-
              Trading-Stock-Indexes


         www.ProfitableTradingTips.com
Success in trading stock indexes depends upon
choice of index, fundamental analysis of the market
 sector or economy that the index represents and
           attention to market sentiment.




          www.ProfitableTradingTips.com
Here is a brief overview of the business of trading
                    stock indexes.
    Our goal is to help the trader devise a trading
system that leads to success in trading stock indexes
    and helps avoid simply trying to outguess the
                        market.




          www.ProfitableTradingTips.com
What the Stock Index Contains
There are a wide variety of stock indexes.




     www.ProfitableTradingTips.com
There are stock indexes that include stocks from all
 parts of the world or selected parts of the world,
and there are stock indexes that include only stocks
                from a given nation.




          www.ProfitableTradingTips.com
Stock indexes such as the Standard and Poor’s 500,
the Nikkei 225, the RTSI, the SENSEX, and the FTSE
  100, represent large cap companies in the USA,
   Japan, Russia, India, and the United Kingdom,
                    respectively.




         www.ProfitableTradingTips.com
There are stock indexes that represent individual
   sectors of the stock market. For example, The
 Morgan Stanley Biotech Index represents thirty-six
US stocks in the biotech sector while the Wilshire US
 REIT index represents more than eighty REIT’s or
            real estate investment trusts.




           www.ProfitableTradingTips.com
If you are trading the Russell 2000 you are trading
an index that represents the bottom two thousand
          stocks in the Russell 3000 index.




          www.ProfitableTradingTips.com
These are mid and small cap stocks with market
caps of usually no more than a billion and a half
                    dollars.




        www.ProfitableTradingTips.com
What Drives the Constituents of the Stock Index
 To a degree all stock indexes are driven by the
                    economy.




        www.ProfitableTradingTips.com
However, large indexes such as the Standard and
Poor’s 500, the Nikkei 225, the RTSI, the SENSEX,
 and the FTSE 100 typically rise as fall with the
          national or global economy.




         www.ProfitableTradingTips.com
If you are trading the SPY, the SPDR exchange traded
  fund that tracks the Standard and Poor’s 500, you
    will expect to see a rise in the index when news
     from Europe implies a resolution of the debt
     dilemma or when US employment figures are
                       improving.




          www.ProfitableTradingTips.com
You will expect to see a fall in the S&P 500 and the
SPY when trade figures for the USA show increasing
  red ink or when congress is unable, again, to deal
       with an extension of the US debt ceiling.




          www.ProfitableTradingTips.com
Many traders who follow events in Europe, for
example, find as much success in trading stock
       indexes as in trading the Euro.




       www.ProfitableTradingTips.com
When to Buy and When to Sell a Stock Index
 Success in trading stock indexes depends upon a
clear view of the fundamentals of nation or market
 sector represented by the individual stock index.




         www.ProfitableTradingTips.com
Success in trading stock indexes also depends upon
   accurate and up to date technical analysis of
            emerging market sentiment.




         www.ProfitableTradingTips.com
How to Trade a Stock Index
Traders keep an eye on general economic indicators
 and/or factors that drive a given market sector in
  order to obtain success in trading stock indexes.




          www.ProfitableTradingTips.com
In addition, traders follow the big companies in any
 given sector. These indexes are representative of a
                  basket of stocks.




          www.ProfitableTradingTips.com
The index tracks the collective movement of stocks
  in the index and is a means of diversification.




         www.ProfitableTradingTips.com
However, if one really large cap stock like Exxon
Mobil or Chevron takes a big hit the index will adjust
             accordingly and rapidly.




           www.ProfitableTradingTips.com
Having a clear idea about just what is happening to
 the individual components of the index is a clear
      path to success in trading stock indexes.




          www.ProfitableTradingTips.com
Options trading often focuses on stock indexes. How
  to profit from stock option trades of indexes is
    commonly to follow market sentiment with
   technical analysis tools and scalp profits from
         incremental moves in the market.




          www.ProfitableTradingTips.com
With options trading one reduces investment risk
down to the price of an options contract and enjoys
a degree of leverage, depending upon contact price.




          www.ProfitableTradingTips.com
For more insights and useful information regarding
 stock, options, commodities, and futures trading
       visit www.ProfitableTradingTips.com.

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Success in Trading Stock Indexes

  • 1. Success in Trading Stock Indexes www.ProfitableTradingTips.com
  • 2. To see a complete version of this presentation and to obtain our free EBook follow this link: http://portal.sliderocket.com/BLOUC/Success-in- Trading-Stock-Indexes Read the Forex Conspiracy Report for insights into trading foreign currencies. Get your copy at http://portal.sliderocket.com/BLOUC/Success-in- Trading-Stock-Indexes www.ProfitableTradingTips.com
  • 3. Success in trading stock indexes depends upon choice of index, fundamental analysis of the market sector or economy that the index represents and attention to market sentiment. www.ProfitableTradingTips.com
  • 4. Here is a brief overview of the business of trading stock indexes. Our goal is to help the trader devise a trading system that leads to success in trading stock indexes and helps avoid simply trying to outguess the market. www.ProfitableTradingTips.com
  • 5. What the Stock Index Contains There are a wide variety of stock indexes. www.ProfitableTradingTips.com
  • 6. There are stock indexes that include stocks from all parts of the world or selected parts of the world, and there are stock indexes that include only stocks from a given nation. www.ProfitableTradingTips.com
  • 7. Stock indexes such as the Standard and Poor’s 500, the Nikkei 225, the RTSI, the SENSEX, and the FTSE 100, represent large cap companies in the USA, Japan, Russia, India, and the United Kingdom, respectively. www.ProfitableTradingTips.com
  • 8. There are stock indexes that represent individual sectors of the stock market. For example, The Morgan Stanley Biotech Index represents thirty-six US stocks in the biotech sector while the Wilshire US REIT index represents more than eighty REIT’s or real estate investment trusts. www.ProfitableTradingTips.com
  • 9. If you are trading the Russell 2000 you are trading an index that represents the bottom two thousand stocks in the Russell 3000 index. www.ProfitableTradingTips.com
  • 10. These are mid and small cap stocks with market caps of usually no more than a billion and a half dollars. www.ProfitableTradingTips.com
  • 11. What Drives the Constituents of the Stock Index To a degree all stock indexes are driven by the economy. www.ProfitableTradingTips.com
  • 12. However, large indexes such as the Standard and Poor’s 500, the Nikkei 225, the RTSI, the SENSEX, and the FTSE 100 typically rise as fall with the national or global economy. www.ProfitableTradingTips.com
  • 13. If you are trading the SPY, the SPDR exchange traded fund that tracks the Standard and Poor’s 500, you will expect to see a rise in the index when news from Europe implies a resolution of the debt dilemma or when US employment figures are improving. www.ProfitableTradingTips.com
  • 14. You will expect to see a fall in the S&P 500 and the SPY when trade figures for the USA show increasing red ink or when congress is unable, again, to deal with an extension of the US debt ceiling. www.ProfitableTradingTips.com
  • 15. Many traders who follow events in Europe, for example, find as much success in trading stock indexes as in trading the Euro. www.ProfitableTradingTips.com
  • 16. When to Buy and When to Sell a Stock Index Success in trading stock indexes depends upon a clear view of the fundamentals of nation or market sector represented by the individual stock index. www.ProfitableTradingTips.com
  • 17. Success in trading stock indexes also depends upon accurate and up to date technical analysis of emerging market sentiment. www.ProfitableTradingTips.com
  • 18. How to Trade a Stock Index Traders keep an eye on general economic indicators and/or factors that drive a given market sector in order to obtain success in trading stock indexes. www.ProfitableTradingTips.com
  • 19. In addition, traders follow the big companies in any given sector. These indexes are representative of a basket of stocks. www.ProfitableTradingTips.com
  • 20. The index tracks the collective movement of stocks in the index and is a means of diversification. www.ProfitableTradingTips.com
  • 21. However, if one really large cap stock like Exxon Mobil or Chevron takes a big hit the index will adjust accordingly and rapidly. www.ProfitableTradingTips.com
  • 22. Having a clear idea about just what is happening to the individual components of the index is a clear path to success in trading stock indexes. www.ProfitableTradingTips.com
  • 23. Options trading often focuses on stock indexes. How to profit from stock option trades of indexes is commonly to follow market sentiment with technical analysis tools and scalp profits from incremental moves in the market. www.ProfitableTradingTips.com
  • 24. With options trading one reduces investment risk down to the price of an options contract and enjoys a degree of leverage, depending upon contact price. www.ProfitableTradingTips.com
  • 25. For more insights and useful information regarding stock, options, commodities, and futures trading visit www.ProfitableTradingTips.com.