Best Indices to Trade in 2024

Before you venture into the world of index trading and finding out which indices are the best to trade, you've first got to understand what trading indices is, and how it can impact your portfolio. So, what are indices in trading and how can you get started on trading them?

An index is a powerful way of tracking markets, as it groups up assets into a single ticker that can be used for many reasons: there are indices to track a country’s stock market performance, indices for specific sectors or regions, indices for specific commodities, and even indices for tracking market sentiment and volatility.

Below, we explore some stock market indices you should know about and the top contenders for 2024. Beyond the basic definitions, we'll summarise the best strategies for trading indices using Contracts For Difference (CFD), so keep reading and by the end, you’ll be empowered to choose wisely based on your investment goals.

The concept of indices trading is fairly simple to understand: a stock market index covers a basket of shares from the same market segment or geographical region. This makes indices trading online a solid indicator of overall market health, and traders can use positions based on these indices to gain diversified market exposure, as they can be comprised of dozens or even hundreds of stocks, without needing to research and identify the individual companies.

If you strongly believe in the future success of a certain country or industry, you can choose indices to trade that are likely to benefit the most from the upcoming trends.

When you start trading in indices, the risk level and type of diversification are the first points to cover. Each index has a unique selection of shares that you need to understand before investing.

Is it the big hitters generally that you want exposure to? The S&P 500 index covers a diverse mixture of the top companies based in the United States (US), including Microsoft, Tesla, Amazon and Visa. But if you want to invest in the technology sector then the NASDAQ 100 has a basket of shares that you might find more appealing, led by Microsoft, Apple, Nvidia and Amazon at the time of writing.

These two American indices share some of the same companies, but there’s enough of a difference between them to make each of them a unique type of investment. If you're trading these indices, understanding these differences is key to your strategy.

Market performance is another important element to take into account when trading indices. You’ll want to see a strong overall market with the potential for further growth in a number of the assets included. This means looking at past performance and also getting an understanding of what the future might hold in store for the industry or region.

Since an index-based CFD trading account with the best brokers for trading indices like TMGM lets you choose from around the planet, you’ll want to think about whether you want global or regional diversification. Take into account your access to reliable, up-to-date information, and whether the indices trading hours suit you.

Volatility is another issue to consider, as some of these indices are more likely to suffer large rises or falls than others. Whether you want a lot of volatility or not depends on the trading strategy you have in mind. A high degree of volatility is an important element when you're trading indices CFDs or swing trading.

When looking at the past performance of the main day trading indices, we need to remember that this isn’t necessarily indicative of future results. However, looking at the performance can provide a valuable reference point as part of your decision-making process. By looking at how well they’ve performed in the past and how popular each index is among investors, we can create a list of the main indices you might like to know about.

The following are some of the top indices in 2024 you might like to consider. Expect to see them listed on any reliable trading platform.

This is just a small selection of the different options you’ll find on the best indices trading platforms - including right here at TMGM. If you’re not convinced that any of them is perfect for you, it might be a good idea to look at other indices around the world. You’ll want to see what each of the indices is trading at just now and how they've performed historically, as well as looking into future growth predictions.

What is indices trading without a good strategy? When you decide you want to have some exposure to indices, the choice of index is just one of the big decisions to make. Once you’re clear on whether you want to track the FTSE 100, the S&P 500, or some other popular index, you’ll want to look at what trading strategies you could use to do it.

This is the key to trading indices well, as your strategy will be determined by your aims and will guide the moves you make to try to profit from the market’s movements.

One of the factors that stand out when looking at the past performance of the top trading indices is their long-term growth. The FTSE 100, the S&P 500, the Dow Jones Industrial Average, and others have all grown impressively over several years or decades. When compared to other popular types of long-term investments like bonds or pension funds, the best market indices often come out ahead.

This isn’t a guarantee that you’ll earn big profits by holding onto your investment for a long time. But if you’re weighing up investment alternatives - trading indices vs forex, for example - you might like the long-term possibilities that investing or trading indices offers.

In general, indices trading can cover a variety of financial instruments, but with CFDs, you’ll look to benefit from the index’s price movement without owning the assets. It’s a flexible way to invest using leverage and gives the opportunity to profit from the value rising or falling.

CFD indices trading is a fairly complex type of financial instrument which can include using leverage to amplify the profit or loss, so learning to use the right indicators, tools, and approach will be key to successfully trading indices using CFDs.

This approach to trading indices CFDs involves trying to benefit from price changes. It works best when trading volatility indices where the chance of bigger price swings is greater, such as VIX, a Volatility Index.

Any type of swing trading is based on technical analysis using a series of charts to try and understand the market transfers, rather than carrying out fundamental analysis of the value of the assets. Charts such as the Moving Average and the Relative Strength Index can be used to help gauge the current market conditions and how an index might move in the near future.

The top indices in trading we’ve looked at here offer different ways of trying to profit from the markets across the planet. Now it's time to start carrying out your own research to see which one is most closely aligned with your risk tolerance and investment goals.

Sign up for a TMGM account today and explore our powerful platform, offering a wide range of indices CFDs to help you take advantage of global market opportunities.