Trade ALL the top indices with Ubuntu Invest!
An index is when one financial instrument is measured against many others.
For example, the USD index is the average value of the USD against many other currency pairs. One of the most popular indices is the FTSE 100, this tracks the 100 largest companies on the London Stock Exchange.
Indices show more about the instrument than looking at just any one pair.
For example, if you were watching the USD/ZAR and you see the USD getting stronger. This does not necessarily mean that the USD is getting stronger. The ZAR could be getting weaker. But if you compare the USD to 10, 20 or even more currency pairs and you see that the USD is getting stronger then you can be fairly certain that it is true. Indices are becoming more and more popular trade, and often seen as the more predictable choice which is exactly what we want!
Most traded stock market Indices
(US Tech 100)
The Nasdaq is probably the most recognizable name of the indices. This reflects the market value of 100 non-financial companies in the United States.
This measures the value of the 30 largest blue-chip stocks in the United States. Sudden changes in the DJIA very often helps predict movements in the USD.
As the largest economy in the Eurozone, the health of the German economy is closely watched. The DAX measures the performance of the 30 largest companies listed on the Frankfurt Stock Exchange.
This measures the performance of 100 blue-chip companies that are listed on the London Stock Exchange. The FTSE 100 is often used as a way to predict future movements in the GBP.
The Standard & Poor (S&P) index is a market-capital weighted index of the 500 largest publicly traded companies in the United States. This index is widely regarding as the best gauge of the large capital US equities. It is not restricted to a particular type of company, so it includes tech and financial businesses.
How to trade indices
With Ubuntu Invest you can trade indices from the MetaTrader 5 platform, Web Trader or our mobile trader app.
Our spreads are extremely competitive and our servers managing indices are top tier. From the decision making on indices there are a few things that most traders take note of. Let’s break them down here.
Please note that there is a lot more about trading indices than just listed below, but this will give you a good idea as to how traders profit from trading indices.
Both Forex and Stocks can show significant movement based on news events. Anything from investor sentiment, central bank announcements, unemployment in a country or payroll reports (especially the NFP!) can give a good indicator on the health of a trading instrument.
Publicly traded companies are required to publish their financial year end reports. These reports are made available to the public, and larger companies often release it as a press release. These reports give an in-depth look into the financial well being of a company. If you are trading an index based heavily on tech companies, then the financial reports of one of the big players will give a good indication of how that index will move.
This is where a lot of the more seasoned traders make more profit. From events that are not directly related to an index, but will have a spill over effect on them. As an example, during the COVID pandemic there has been temporary bans on alcohol sales in South Africa. This caused major breweries to stop brewing beer. As a result of not brewing beer there was no longer a constant supply of brewers yeast, which is a key component for producing Marmite, a Unilever product. This would negatively effect the value of Unilever stocks.