TechAnalysis of FTSE100

[blackfoot]

Hi
I am learning about intraday trading using spreadbetting.

I have a question about 'trading' the FTSE.

Trading in stocks and shares is undertaken within the supply and demand of stocks available. Institutional trading does not normally include indices but underlying stocks alone.

Spreadbetting is a derivative opportunity which can include indices such as the DAX and FTSE.

I am considering trading the FTSE100 index using spreadbetting or CFDs.

I can analyse underlying stocks using technical analysis and zone analysis. The FTSE index is a summation of stock values and therefore varying in depth and range at any time.

Since supply and demand affects underlying stocks one can make informed decisions using support and resistance, momentum and direction using technical analysis.

I am not sure if the above can be relied upon to assist with informed decisions about the FTSE100 as it is a composite. [It is true that it is traded as a derivative and has supply/demand etc but the actual figures are derived from the LSE index and not from derivatives alone. Added at 2pm after original post]

Would any member kindly comment and guide me from their experience regarding the effectiveness of technical analysis on an index.

Many thanks

 

[malaguti]

Hi
Would any member kindly comment and guide me from their experience regarding the effectiveness of technical analysis on an index.

very effective in my opinion. but technical analysis is a tad more than just support and resistance, which I'm sure you know already (just for reference I don't trade off support/resistance at all). This is true for two main indices which I'm pretty familiar with, FTSE and S&P. I don't trade any other index.

 

[blackfoot]

Thanks

very effective in my opinion. but technical analysis is a tad more than just support and resistance, which I'm sure you know already (just for reference I don't trade off support/resistance at all). This is true for two main indices which I'm pretty familiar with, FTSE and S&P. I don't trade any other index.

Thank you for the courtesy of a reply.

The TA I have applied in tests appears to have a good prospect of describing the index but I was unsure if that were generally the case and you have confirmed that it is. As for support and resistance on an index...strictly there isn't any... as it's not traded and I understand if it should not be used!.. but I have used it with single equities.

Many thanks.

All the best