Adding indices to your portfolio
While currencies are the most frequently traded of all the assets, many traders also get involved with trading indices as they can offer the potential for attractive rewards. For this reason alone, they are an ideal addition to a diversification strategy.
Indices generally provide a simpler route into trading unfamiliar stock markets. While it might not be easy to select an individual stock to trade in an unknown stock market, the actual index itself is likely to be more familiar and less volatile.
Trading indices has also proved an attractive option for many technical traders because of the way in which they perform in respect to technical levels and patterns. Indices are consistently known to respect major technical levels, round numbers and chart patterns, providing good trading opportunities.