The Dax40/Ger40 formerly known as Dax30/Ger30 is an index that consists of the 40 major German blue chip companies that are listed on the Frankfurt Stock Exchange and it measures their performances. The Dax was founded on the 1st of July 1988. It had 30 companies hence it was called Dax30/Ger30. It has since expanded to 40 companies in 2021 and now called the Dax40/Ger40. The addition will give traders and investors an opportunity to gain more exposure to the German financial markets. The Dax40 is considered astrong measure of German and European economic health.
What Is Stock Index Trading?
Stock index trading is when you are trading a basket of stocks which makes up an Index. Stock Index trading is less time consuming as you are not required to study each company. You can trade the Index on your Forex trading platform and do it through an instrument such as the Dax40. I have published blogposts on how to trade Ftse100 and Nasdaq.
Some Of The Companies On Dax40
BMW.
Adidas.
Porsche.
Puma.
Airbus.
Deutsche Bank.
Siemens.
Volkswagen.
Continental.
Mercedes-Benz Group.
What Economic Factors Influence Dax40?
Monetary Policy, performance of the companies on the index and geopolitics.
The change in Interest Rates plays a big role in currency valuation. The Release of Interest Rates and Monetary Policy statement by the European Central Bank (ECB) affect the price of Euro. When Euro weakens against USD,Dax40 strengthens because German exports are paid for in USD and they cost more because of the exchange rate. When Euro strengthens, Dax40 falls, they have a negative correlation.
It is very crucial to understand that all financial instruments do not just weaken or strengthen, there’s always a fundamental reason why they react in a certain way. When you have decided to invest your money in the Forex markets, understanding how the markets work should be your priority.
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FTSE 100 (pronounced “Footsie”) or UK100 is an index that comprises of 100 largest companies by market cap that are listed on the London Stock Exchange.London Stock Exchange (LSE) opens from Monday to Friday at 8am-12pm and they take a lunch break and continue until 4:30pm. FTSE 100 was launched on the 3rd of January 1984. Many of these companies are international and are affected by the exchange rate of the British Pound.
What Is Stock Index Trading?
Stock index trading is when you are trading a basket of stocks which makes up an Index. You can do that on your Forex trading platform and do it through an instrument such as FTSE 100.
Advantages Of trading Stock Indices
Stock indices have generally higher returns than the stock market they represent.
The Volatility is reduced as compared to currencies.
Stock index trading requires less research as opposed to trading /investing in individual stocks.
When trading a stock index e.g. Ftse100 you do not have to spend weeks analyzing all the companies under this umbrella but what you can do is follow the instrument as you would do analyzing your currencies.
Stock index trading does not require any traditional stock brokerage where you pay high fees, you can buy and sell on the same Forex trading platform as you would do with your currencies and it is a cheaper alternative to trading the actual stock.
There are different markets that one can focus on. I have published a blogpost on the U.S marketsand this one is about the London markets.
Why Is FTSE 100 Important?
Most companies invest their funds in the equity markets. FTSE 100 is used to measure the performance of the overall equity market in the UK because it lists the top 100 companies which affect the stock markets.
Some Of The Companies On FTSE100
Anglo American (mining)
Avast (software & computer software)
Barclays (banks)
BP & Shell (oil & gas producers)
Coca Cola (Beverages)
Mondi (forestry & paper)
Unilever (personal goods)
Vodafone Group (mobile telecommunications)
What Economic Factors Influence FTSE 100?
The release of UK GDP, Interest Rates and Manufacturing data. CPI also does affect it up to a certain level because CPI influences the Central Banks monetary policy and rate decision. Higher CPI leads to rate hikes while lower CPI may lead to rate cuts which has a direct impact on FTSE 100.
Thank you for reading. I hope you’ve learned something from this post. Should you need lessons on how to trade FTSE 100 and other financial instruments including currencies, feel free to WhatsApp me on +27 78 144 6851.
ECB is the Central Bank for the EURO and it administers Monetary Policy of the Euro Zone. ECB press conference is held 8 times a year about 45 minutes after the Interest Rate is announced. It is also called the Interest Rate Statement. The conference is about an hour long and has two parts. First part is when the actual statement is read and the second part is opened for questions which then lead to market volatility.
What are the tasks and objections of European Central Bank?
The tasks are to maintain Monetary Policy for the Euro, including the banking supervision. Their main objective is to maintain the price stability and to safeguard the value of Euro.
Why is the ECB statement important and why do we (traders) care?
It is the leading indicator that provides the clues about the future Monetary Policy. High Volatility is often expected during the press conference and it has a direct impact on Euro pairs. Below is European Central Bank’s 2022 dates. Thank you for stopping by, do save these dates so you can watch out for Euro pairs. If you wish to learn how to trade Interest Rates and understand that impact that monetary policy statement has on currencies, WhatsApp +27 78 144 6851 for private lessons, mentorship and coaching.
The markets are open for 24 hours and 5 days a week. Most people are introduced to the markets as this one exciting and a very quick way of making money. If you have been trading for a while, you probably know by now that is not the case. It is no lie that as a newbie, looking at the charts can fill you with some sort of an adrenalin rush.
Spend Less Time In The Markets and Live More.
Now let’s be honest, Forex trading can be very addictive and most traders are just addicts. I published an episode on my podcast on this topic, you can check it out HERE. Forex trading is not gambling or similar to a casino, but there’s a very thin line between trading and just gambling. This is all dependent on how you view your trading account. The charts and the constant change in price can keep you glued to your screen and tempted to trade even when there is no reason to.
Life Doesn’t Have To Stop Just Because You Have A Trading Account.
I speak to a lot of people on a daily basis who are struggling with finding balance in their lives. They struggle to find time for themselves, for their families, spouses and even children. They spend all their time checking the charts. Even when they go on family vacations, they can hardly spend time with their loved ones. Their partners feel neglected all the time.
They are constantly checking charts even on their mobile phones. Now their actions have made their loved ones to think that they are loosing their minds and no one take them seriously. They are also very frustrated human beings. Their lives are consumed by charts. Below are the few things that you can do to find that balance so you are able to trade less and live more.
1. Have A Trading Plan
Creating a trading plan is easy, but sticking to it is a bit challenging, you will need a high level of focus. When it comes to creating a trading plan, you must also not ignore your personality and your lifestyle. Listen to the podcast episode on this topic HERE. When you have a 9-5 job, you cannot afford to choose a trading method that will require you to trade at random times. You don’t have time to do so, your time is paid for and you have responsibilities and you certainly don’t want to be fired for neglecting your responsibilities.
You need a trading plan that will allow you to choose your trading time and plan around that. You need to know how much time you will allocate for your trading sessions. Your trading plan should also include when NOT to trade. I am sharing this because I know it is possible to plan your trades as long as you choose a method of trading that will accommodate your lifestyle. In my mentorship program, I do the planning in detail with each mentee.
2. Have A Day Off
Just like you take a day off or leave from work, you have a day off exercising when you just rest, stretch and allow your body to recover from exercise and your muscles to relax, you also need to have your off day as well in the markets. This is another trick that I personally used to overcome the markets addiction. It also helped me to stop treating my trading account as a casino money slot machine and understand that it is OK not to trade everyday.
3. Stay Away From Mobile Trading
From time to time, I take some time off social media to focus on reading more, working on myself more, check in with myself and basically doing personal development away from distractions, we all know how we can be consumed by social media . During such a period, I do not just log out of social media but I also delete the apps so that I don’t get notifications.
In the same manner, having your trading app easily accessible to you may be the reason why you cannot stay away from trading. If you plan your trades and your trading for the day is done, you won’t find yourself fiddling with your app and checking the markets the whole day, people do that even when they are driving. They check the markets even when they are in the bathroom or just bored. These are just a few things that you can do to find that balance that you have wanting all along.
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Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System (the Fed). It’s mandate is to oversee the nation’s open market operations (i.e. the Fed’s buying and selling of United States Treasury securities). This Federal Reserve committee makes key decisions about Interest Rates and the growth of the United States money supply. Interest rates are very important in currency evaluation. Read more about Central Banks and Interest Rates HERE.
On the 26th of January, FOMC will hold their first Monetary Policy meeting of 2022 where they are expected to hold their Interest Rates at the current <0.25%. Planning is key, save these dates to make your trading year more organized. I recently published 2 episodes on my podcast about beginning with the end in mind, you can LISTEN here and why I do not ignore fundamentals in my trading, LISTEN here.
Below is the FOMC 2022 dates. Kindly share this post with anyone who may need this information. You can also subscribe to this blog for notifications on new blog posts. If you have an android device, you can also download the App on Google Playstore. For private lessons on how to trade FOMC, WhatsApp +27 78 144 6851. Thank you for stopping by, please stay safe.
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