MARKET RANGE

Indices: The World's most diversified Financial
Market

Well, here you can find a lot about indices, the most famous ones, indices live prices, how stocks weights inside the index are calculated and what causes price movements in this market.

What are stock indices?

A stock market index is a bunch of stocks in a market, group according to the industry they belong to. An index is used traders and economists to evaluate the economy as one unit, as an investment machinery or to just compare profits on different assets. There are three most common types of indices: global indices, regional indices and national indices.

Stock Market indices shows the value of a group of public traded entities. A stock market index presents the performance of a group of stocks compared to the overall performance of the market.

Position trader's philosophy is moved towards successfully identifying the trends which would lead in an appreciation of their investment capital. It is the opposite of day traders. They seek to take advantage of short-term market movements

Why trade Indices?

Before deciding to trade on the commodity basket, traders should understand their patterns as much as possible and consider the factors which direct their behaviors.

Here’s how you can profit by trading indices:

► High liquidity, which brings tight spreads and clear chart patterns.
► Good volatility rates, since they represent the health of the economy they come from, changes in the economy causes volatility, which leads to great trading opportunities.
► You can make profits even if the price is going up or down, which leads to more opportunities. Traders can catch the opportunities from the upside and downside of price movements.
► You can choose which index you prefer, related to which industry you like. There are different indices for different industries and sectors, so you have a wider exposure to indices that match your preferences.

How are stock indices calculated?

Stock indices are characterized by transparency. It means that it is shown publicly what stocks are included in the index and how the index is calculated. When this information is public, it is easier to decide in what index is the best for the trader to invest their capital.

There are several methods to evaluate the value of a stock index, but the most used ones are:

The Market Capitalization Weighted Method

Each stock in the index is given an importance level due to the market capitalization they represent. The companies which have the largest importance will ‘govern’ the index. The S&P 500 is an example of a market capitalization weighted index.

The Price Weighted Method

Each stock in the index is given an importance level due to the price of the stock. The companies which have the higher price of the stocks, even though their market capitalization is not the highest, this stock will decide the movement of the index. The DJIA is an index weighted using the price-weighted method.

The Equal Weighted Method

The contribution of each stock in the index is calculated, summed and divided by the amount of stocks in the index.

The Fundamental Weighted Method

The index is created using fundamentals like price to earnings ratios, earnings, book val ues and others.

Most indices are calculated using the market capitalization weighted method.

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Indices Live Prices

What moves indices market?

An index behaves as its major stock decide, whether they be market caps, fundamentals, or just the prices of the stocks. The method used to calculate the index can bring different results.

Indices rates influencers:

The index major stock

The companies included in the index will affect its price. The biggest players will give the biggest contribution in how the index will move. So, there should be paid special attention.

Economic Data

If an index is created by European companies the most, then what happens to Eurozone will affect the most this index. All the data that traders would need to look at, like: inflation, unemployment, inventory levels and treasury yields, they are all placed in Economic Calendar.

Politics

Talks about free trade, cutting taxes, excluding of the government from managing a certain market would help traders to benefit from indices.

Payment Methods

You can fund your account with Dakken Group with whatever Visa Card you own. We accept Visa Debit, Visa Credit, business cards, except of prepaid ones.

Mastercard is also one of our best collaborators. You can open your account with Master Debit and Credit. There are no additional charges for deposits or withdrawal with Master cards, even though during other payments you are charged for the service.

Maestro is a quick and easy way to get your account ready to trade. It is a fast funding method. Maestro Debit cards are accepted, excluding prepaid ones.

Skrill is an effective way to transfer money or pay different purchases. So, it is a good way to fund your trading account with Dakken Group from anywhere with just email address and password. Deposits via Skrill will be returned to the originating bank account that funded the Skrill account. Supporting documentation will be required in this instance. Skrill also does not support funding through prepaid cards.

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Trading foreign exchange, foreign exchange options, foreign exchange forwards, contracts for difference, bullion and other over-the-counter products carries a high level of risk and may not be suitable for all investors. Past performance of an investment is no guide to its performance in the future. Investments, or income from them, can go down as well as up. You may not necessarily get back the amount you invested.

All opinions, news, analysis, prices or other information contained on this website are provided as general market commentary and does not constitute investment advice, nor a solicitation or recommendation for you to buy or sell any over-the-counter product or other financial instrument. Please, ensure you understand all risks and seeking dependent advice if necessary.

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