Day Trading the Aussie 200 index CFD or Contact for Difference can be one of the most rewarding areas of the market to specialize in. With the big miners like BHP and Rio Tinto jumping all over the place on a daily basis it means the Aussie 200 index CFD is moving around as well. Any time you have volatility you will have opportunity and that is what excites every trader. When I talk about the Aussie 200 keep in mind I am referring generally to the various Index CFDs that mirror the performance of the SPI 200 futures contract.
Daily ranges on the Aussie 200 normally average around 40-50 points a day with extreme moves measuring well over 100 points. This daily movement gives day traders the perfect recipe for opportunity, so long as they have a well carved out trading plan and are able to follow it rigidly day by day. In fact one of major pitfalls of day traders trading the aussie 200 index CFD is the lack of a sound trading plan and the capacity to follow it daily.
Major trading styles for the Aussie 200 index
The major styles of day trading the Aussie 200 index CFD involve trading breakouts, trading between support and resistance or locating small trends during the day. Ideally you will want to specialize in one of these 3 styles to begin with and hone your skills at that before adding another string to your bow with additional techniques.
Know what you want for the day ahead
At the outset spend time identifying your objectives and write down your daily goals and have them clearly displayed near your computer, on your monitor or up on a wall nearby. Providing a clear goal aligns your mind with the desired outcome.
Precise & efficient daily analysis
Running your analysis each day should be very precise and efficient and by that I mean you want to be disciplined to run the same sort of scans or premarket analysis each day. Check the Dow Jones and the S&P 500 overnight. Our Aussie 200 index is such a resource heavy exchange that you'll want to be familiar with what crude, gold, silver and copper did overnight. In addition to that, catch up with how the aussie dollar has performed and head over to 2 or 3 major news sites to get a feel for the overnight action and what is planned for the Aussie market that day.
Scanning the Aussie market for Opportunities
With the news out of the way it's time to get stuck into a few market scans. Trading the Aussie 200 means you should be acutely aware of what at least the top 50 stocks are doing, if not the top 200. Start collecting support and resistance levels and begin mapping out the upper and lower range for the day. It's uncanny how many times the market gaps higher or lower on nothing but light volume outside your predicted range, providing a critical opportunity for you.
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