Market Analysis7 min read
Index Trading: How to Trade the S&P 500, DAX, and FTSE 100
Stock index CFDs let you trade entire markets. Learn how major indices work and how to trade them. Cash indices vs CFDs — session hours, costs and the main.
What Are Index CFDs?
Index CFDs track the price of stock market indices. You don't buy individual stocks — you trade the whole market. Popular indices: S&P 500 (US 500), NASDAQ 100 (US Tech 100), DAX 40 (Germany 40), FTSE 100 (UK 100), CAC 40 (France 40).
What Moves Indices?
- Earnings: Major company earnings move the index
- Economic data: GDP, CPI, employment data
- Central bank decisions: Rate changes affect equity valuations
- Sector rotation: Money flowing between tech, financials, energy, etc.
- Geopolitics: Trade wars, sanctions, conflicts affect markets
Trading Index CFDs
- Best for trend following: Indices trend more than forex — use EMA crossovers
- Time-of-day: DAX moves most during Frankfurt open (09:00 SAST), S&P during NY open (16:30 SAST)
- Gap risk: Indices gap on open — be careful holding overnight
- Use the Strategy Lab to backtest index strategies before risking capital
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.