What do you know about index trading? It is an excellent way of trading where you can easily earn money, and the risk remains minimum. What is index trading? It is mostly used in the stock market, and mutual funds also use this technique to generate income. If you see the chart of mutual funds you will get to know that their win chance has always increased by the passage of time and that is because of index trading.
Wʜᴀᴛ Iꜱ Iɴᴅᴇx Tʀᴀᴅɪɴɢ & Hᴏᴡ Iᴛ Wᴏʀᴋꜱ?
A number of many shares is called an index, for example KMI-30 index which includes selected Shariah-compliant companies. It has 30 specific shares that is why it is named KMI-30. Similarly KSE-100 also known as the Karachi Stock Exchange, includes 100 famous companies combined in the form of an index.
In the same way there are many other index shares that include shares of different companies. Now the question arises how can we trade in them? It is very easy and today my discussion will be on this topic and in the crypto market. Surely, you all will get a lot of information about this today. Therefore read the post till the end.
Such indexes are found in stock markets or in some bank applications that allow you to trade in them. First I want to point out the benefit of trading an index. Isn’t it better to trade directly in one single share?
In index trading, there are many shares included, which reduces volatility. For example in KMI-30 there are 30 shares. Each share has its own price movement. If out of 30 shares 16 move in your favor then you will get a profit and the probability of that happening is very high.
In an index, your profit and loss always stay balanced. Share prices keeps on cancelling each other. Sometimes some shares may be in loss but after some time they turn into profit. In index trading the profit ratio is low but the chances of getting profit are high. Similarly, the chance of loss is also very low.
Now let’s talk about if we trade in a single share what will happen? In trading a single share the risk and reward ratio is 50%. Meaning the chance of profit is high but the chance of loss is also high. However, the risk here is that you may get stuck in the trade. That’s why index trading is far better than trading a single share or coin.
Iɴᴅᴇx Tʀᴀᴅɪɴɢ ɪɴ Cʀʏᴘᴛᴏ
How to do index trading in the crypto market? Here, there is no special built-in index trading of any exchange rather we have to create it manually. How is that possible? Through a bot. As I mentioned in this post earlier about bots. I personally design bots and test them practically.
Recently, I created a bot that trades in the form of an index and its win percentage is very high while the chance of loss is low. But still for safety I always use a stoploss. My bot is ready it picks the top 15 gainers and losers for trading.
Trading depends on the price movement of 30 coins. If the overall index is in profit I close the trade. If it is in loss I wait and layer the trades with a special strategy until I move toward profit. I will explain this index trading strategy in detail in my next post.
If you are interested in index trading in crypto tell me in the comment section so that I can share the bot and trading method that will be profitable for you. If there comes more users interested then I may share the bot setup for free. I also design all types of bots and offer them at very affordable prices.
I hope you guys will like this post and is interesting as well. If you find it informative then dont forget to give me a support. Share you reviews in the comment section below. Those who will interact will get my 100% upvotes. My staking is increasing. Thank you all for your time reading the content.
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