Being able to identify and take advantage of trends – in both rising and falling markets – is something many day traders hope for. As a tool to potentially achieve that goal, you can use a trend-following or momentum indicator, such as Moving Average, Bollinger Bands or Relative Strength Index.
These, and dozens of other indicators, are offered free of charge to Plus500 traders.
To use our chart indicators simply:
With CFD trading, you are not buying or selling underlying assets, but rather trading on their price movements, and as such, trading shares and indices is relatively similar. There are, however, 2 notable differences:
1. Individual vs. combined
A company's shares represent its equity value, meaning the movements in the price of a stock are determined primarily by the company's performance. Examples of popular shares CFDs include: Apple, Meta and Amazon.
A stock index acts as a benchmark of a selected group of shares on the stock market, meaning its price follows a number of companies. Stock indices can be divided into 2 groups:
2. Max leverage ratio
The leverage available for trading index CFDs at Plus500 is up to 1:20, meaning with an amount of R750 you can get the effect of R15 000 capital. Accordingly, any potential profits or losses will be multiplied.
The leverage ratio available for share CFDs is up to 1:5.
Certain stocks perform better than others, so finding leading stocks within a sector or industry is something many traders are focused on. Some traders prefer to cherry-pick for leading stocks by analysing past performance of large companies – in search for the latest market movers and trending assets.
While this is a popular form of trading among traders, an alternative is to spread out your exposure by trading on leading market sectors.
In addition to chart indicators, we offer a number of easy-to-use and effective trading tools which you can use in your stock market trend trading strategies.
These, and dozens of other indicators, are offered free of charge to Plus500 traders.