The Nasdaq Index has traditionally outperformed traditional market indices.
This stellar track record makes it a popular investment opportunity for traders looking to maximise profits in times of high inflation.
But like any investment, to be successful, it’s important to understand the factors that drive the Nasdaq Index’s growth and the optimal performance periods.
Only once a trader has done this can they capitalise on the upward trajectory of the index. If you’re new to trading or aren’t sure where to start, here’s a guide to help you maximise your profits when trading the Nasdaq Index.
What is the Nasdaq Index?
The Nasdaq Index is a global electronic marketplace where traders can buy and sell different types of securities. Short for the National Association of Securities Dealers Automated Quotations, the Nasdaq Index is now a subsidiary of the NASD – which is now known as the FINRA.
Opening for business in 1971, the Nasdaq Index was groundbreaking as it was the first electronic trading system. Fast forward fifty years and the Nasdaq operates across 29 markets, one clearinghouse and five central securities depositories.
There are over 5,000 companies listed and traded on the index, most sitting within the tech industry. For example, Microsoft, Apple and Meta are some of the companies listed on the Nasdaq Index.
What are the best trading periods in the Nasdaq Index?
If you’re interested in trading the Nasdaq for access to the biggest tech companies in the world, you’re not alone. While there are many different ways you can trade the index (from spread betting to buying an exchange-traded fund), there are a few things to know beforehand.
Firstly, the Nasdaq Index is open for six and a half hours per day – from 2:30 pm until 9:00 pm UK time.
If you’re looking for the top-secret time to trade, you might be disappointed to know that there isn’t one time of day that’s best for trading on your trading app. But there are some times to avoid.
Experienced European traders tend to trade just after the market opens as the first hour can be volatile. This is because this opening time usually coincides with US data releases which can impact the price of shares. These price swings can be excellent ways for experienced traders to make a profit but it’s not for the faint-hearted. Less experienced traders should be extra cautious around this time as these potentially volatile periods can lead to losses if you’re not careful. However, once the first hour has passed, it’s much safer to start trading as a novice.
Final thoughts…
The Nasdaq Index is one of the most popular when it comes to trading. But that doesn’t mean all trading windows were made equal. If you’re an experienced trader, the first hour of the day is full of opportunities but novice traders are usually best to wait until the market has calmed down for the day.
