Forex trading has become a very popular business in the last few years. Many people are now doing it as a side venture, while others have even become full-time traders. Among the reasons why forex trading has drawn so much attention are its high liquidity and versatility. There are a lot of aspects to this trading market, one of which is indices. NAS100 forex trading falls under the indices category, and it is attracting a huge number of new traders these days. If you are thinking of getting into NAS100 forex trading yourself, read on for some useful insights.
The Best NAS100 Forex Brokers 2024
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What is NAS100 Forex Trading?
NAS100 is another name for the Nasdaq 100 index. It is a listing of the 100 biggest non-finance companies on the US Nasdaq stock exchange. Most of the companies in this index are tech companies, led by Apple, Amazon, Microsoft, and Tesla. Obviously, these companies do not stand for currencies, so what is NAS100 forex trading exactly?
For one thing, it is usual for forex traders to diversify their trading portfolio by investing in other assets. Although forex is their primary focus, it is vital to spread risk by speculating on other financial assets. This is where NAS100 forex trading comes into play. In addition to trading currencies, many forex traders also trade the NAS100 by way of Contracts for Difference or CFDs, and exchange-traded funds or ETFs.
CFDs are a very popular financial asset for forex traders. With these instruments, they can speculate on the NAS100 price trends without actually owning any of the assets. This strategy is great for increasing flexibility as well as profit potential. Of course, the risk of loss increases as well, but that is another matter to consider.
Navigating the Complex World of NAS100 Forex Trading
As mentioned, the NAS100 is an index, but its movements do have a strong impact on the forex market. Keep in mind that the NAS100 represents the top companies in the US. Therefore, changes in the performance of NAS100 can easily affect the value of the USD. A strong showing of the NAS100 companies is indicative of a strong US economy. Hence, the USD value tends to increase. On the other hand, if the NAS100 value declines, the USD value can drop as well.
So, now comes the question of what causes the NAS100 to move. That is, what are the factors that forex traders should look out for in NAS100 forex trading? There are quite a lot, but the following are the most significant ones.
Share Price
The individual share prices of the companies in the NAS100 index determine the NAS100 value. The higher the market cap, the more weight a company’s share price holds. Therefore, the top companies in the index have the most influence on the NAS100 price.
Economic Indicators
The NAS100 index is also influenced by a number of economic indicators, such as GDP, employment data, and so on. Positive changes in these values cause a rise in NAS100 performance. These same indicators also affect the value of currencies.
Market Sentiment
In many cases, the NAS100 is a reflection of trader sentiment toward risk. For example, during periods of economic growth and stability, traders have a bigger risk appetite and tend to invest more heavily in tech companies. This drives the NAS100 value up, and the USD goes up along with it. On the other hand, during times of economic turmoil, traders are not as willing to take risks on the NAS100. This causes the value to drop, also weakening the USD.
Political Events
Business operations can also take a toll from political events. When a government changes policies, or holds an election perhaps, the big companies in the NAS100 usually make an impact. Whether it’s good or not depends on the actual circumstances. In any case, this has an effect on the price of currencies as well.
4 Best Brokers for NAS100 Forex Reviewed
Traversing the often complex world of NAS100 forex trading is not always easy. However, one can have a simpler time and possibly better trades simply by choosing the right NAS100 forex broker. There are many excellent candidates, but we have listed our top brokers that you can consider.
1. AvaTrade
AvaTrade offers more than 1250 tradable instruments, including the NAS100 index. With 9 licenses from top-tier regulators, 7 trading platforms, and multiple awards, it is easily one of the most sought after forex brokers today.
2. FP markets
Forex traders wishing to invest in the tech sector will find fpmarkets to be a viable choice of broker. They provide access to the NAS100, as well as more than 10000 other tradable assets. They also have more than 70 currency pairs for you to choose from.
3. IG
A strongly regulated broker, IG has also been around the longest. It offers more than 19500 tradable symbols. Investors can trade the NAS100 on their platforms by means of CFDs or ETFs. They also offer advanced trading tools and extensive market research.
4. Interactive Brokers
Interactive Brokers prides itself on more than 8500 tradable symbols, which notably includes the NAS100. They are a highly trusted broker with 9 tier-1 licenses, and operate their own proprietary platform.
Strategies for Successful NAS100 Forex Trading
There are a few strategies that forex traders can use to trade the NAS100. Here are the most popular.
Correlation Trading
The strong correlation between NAS100 and the majors can be a useful advantage for forex traders. For example, an upward trend in the NAS100 index reflects a robust US economy. This means that the USD is getting stronger as well. Therefore, going long on the USD/CAD would be a good idea.
News Trading
Current affairs and economic events often have a strong impact on the NAS100. Oftentimes, these events also have a similar impact on the forex market. Therefore, to make the right trading decisions, traders need to stay on top of the latest earnings reports, geopolitical events, Federal Reserve announcements, and other news related to the economy.
Technical Trading
Mastering some technical analysis skills is vital to a trader’s success in NAS100 forex trading. It would give a huge advantage if one can hone their skills in using technical indicators like charts and trend lines to identify when to best enter or exit positions. As well, moving averages and relative strength indexes are highly useful to learn.
