Binary options traders aren’t limited to trading stocks. They can also trade popular indices as well. Indices are used to track a national stock exchange’s performance. While most countries have stock exchanges, only a small portion are available index assets for binary traders. Trading indices gives you the opportunity to trade stocks without working with individual stocks.
Choosing Which Indices To Trade
The best indices to work with will include assets from countries who play the biggest economic roles. They also tend to have the biggest fluctuations on a daily basis, making it far easier to determine whether overall values will fall or rise. Before you trade any indices, be aware of the trading hours for that country. You can only trade during specific hours, which is why many traders prefer to focus on markets in their own time zones.
Some of the most popular indices for binary options traders include:
- Dow Jones (DJI) – United States
- Nasdaq and Nasdaq 100 (IXIC and NQc1) – United States
- Standard and Poor’s 500 (SPX) – United States
- Shanghai Stock Exchange (SSE180) – China
- Financial Times Straight Exchange (FTSE) – Britian
- Nikkei 225 (N225) – Japan
- Xetra DAX and DAX Future (GDAXI and FDX) – Germany
- Australian Stock Exchange (AXJO) – Australia
While there are others, these are the most traded. Many traders also pay close attention to indices in Israel, France and Russia. As you can tell, all of the countries represented are major players in the world economy. Since the United States greatly affects the global economy, three of the country’s indices rise to the top of the list.
Top Reasons To Choose These Indices
If you watch the stocks represented in each index, you’ll notice how popular and powerful the companies behind the stocks are. The stocks included are what makes each index asset more appealing to traders. The more popular the stocks and the stock exchange represent, the easier it is to determine fluctuations.
Pay close attention to the fluctuating stocks and overall economic and political changes surrounding each stock exchange in the indices you choose. These are great indicators as to the daily performance numbers. Many binary traders begin with popular indices in their own country as it’s easier to analyze stock performance. Others begin with one or two of the US indices and mix in several others on this list.
Once you start to understand the trends and how it affects the indices, you’ll find their far easier to predict than individual stocks.