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The DAX 30 stock index. Features and value

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What is the DAX 30 index? It is one of the largest stock indexes which includes the most important stocks in Germany. The DAX index companies consist of the 30 largest German stocks that are traded on the Frankfurt Stock Exchange.

All stocks included in the DAX are selected based on capitalization and total orders. At the same time, the entire list of stocks is reviewed quarterly to update the index with new companies whenever possible.

In total, all 30 stocks that are included in the presented instrument provide about 70% of the capitalization of the entire Frankfurt Stock Exchange. All 30 DAX stocks are well-known all over the world. You may have heard about Daimler, BMW, Adidas, and others. They are part of this instrument.

The DAX 30 index, along with other indices in the United Kingdom and the United States, are among the most important around the world. In this case, the movement of DAX 30 may indicate to us the overall state of the German economy. Given the fact that Germany has one of the most developed economies in the EU, its condition can have a significant impact on the overall economy of the European region.

Why do investors love this instrument?

The vast majority of investors will pay attention to the dynamics of this particular instrument to assess the state of the EU economy.

DAX index companies: How to trade

These instruments give the opportunity to earn really good money, given the fact that they are quite predictable assets. Within DAX 30, the trading hours on it are the longest.

Accordingly, the trader can choose for themselves the most suitable time when they can trade using this instrument. If you add the DAX 30 Index to your portfolio, you can count on it to give you new opportunities.

But do not assume that it behaves in the same way as many other indices. For example, there is the UK 100 index companies, which includes 100 global UK stocks. In principle, you might think that they are similar, and consequently their movements will be similar. However, this is far from the case. The fact is that the UK 100 is a weighted average index. In this case, both cheap and expensive shares are taken equally for calculating the average value.

In turn, for calculating DAX, 30 priority is given to expensive stocks. Therefore, the movement in these similar instruments will be quite different, and this should be clearly understood. You can follow the Dow 30 stock prices right now and you will see for yourself.

What is the DAX 30 index: features

This index refers to contracts for difference (CFD). In this case, the price of the underlying instrument will be used. But traders will be able to maximize their profits by using significant leverage. The higher the leverage, the higher the global risks.

Using CFDs gives you the huge advantage that you will be protected from having a negative balance. You won’t be able to lose more than your investment in a trade.

Conclusions

Indices themselves play a crucial role in the economy and in trading. The correct trading use of these tools allows one to get a stable profit. Indices are much more predictable than currencies. Many traders and investors realized the full potential of these exchange instruments a long time ago. If you are not trading at the stock exchange, but at Forex, then you can easily use corresponding CFD contracts and derive profit from the price difference. To keep abreast of all developments, follow the news on Letizo news.

read more at: Businessesinsiders

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