Admiral Markets Group consists of the following firms:

Admiral Markets Pty Ltd

Regulated by the Australian Securities and Investments Commission (ASIC)
  • Leverage up to:
    1:500 for retail clients
  • Volatility protection
  • Negative Account Balance Policy
CONTINUE

Admiral Markets UK Ltd

Regulated by the Financial Conduct Authority (FCA)
  • Leverage up to:
    1:30 for retail clients,
    1:500 for professional clients
  • FSCS protection
  • Negative balance protection
CONTINUE
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
Regulator : asic fca

How to trade the FTSE100

Reading time: 14 minutes

Did you know that in 1984, the Financial Times of London and the London Stock Exchange teamed up to create one of the most popular market indicators for investing in UK companies? The newly-formed company, the FTSE Group (Financial Times and Stock Exchange Group), maintains one of the world's most popular indexes that tracks the performance of the UK stock market, which is called the FTSE100.

How to trade the FTSE100

In this article, you will learn:

  • What the FTSE100 index is and how it is calculated.
  • Who the FTSE100 members are.
  • What moves the FTSE100 market.
  • How to trade FTSE100 share prices and the index itself, completely risk-free on a demo trading account.
  • A free FTSE100 trading strategy you can start with straight away!

What is the UK FTSE100 index?

The FTSE100 index, otherwise known as the Footsie, is a stock market index of the 100 largest companies by market capitalisation which are listed on the London Stock Exchange(LSE). The index is managed by the FTSE Group with price updated every 15 seconds between the LSE's trading hours of 8am to 4.30pm UK time.

The UK FTSE100 index is similar to US stock market indexes like the S&P 500 and Dow Jones 30. The price of the index is calculated using the total market capitalisation of its constituent companies.

  • As the index rises it means the total worth of the companies in the index - but not necessarily all of them - is rising.
  • As the index falls it means the total worth of the companies in the index - but not necessarily all of them - is falling.

The rise and fall of the index is easier to see when viewing a chart of the instrument. The chart below is a monthly price chart of the FTSE100's historical price.

FTSE 100 price chart on MetaTrader

Source: Admiral Markets MetaTrader 5, FTSE100, Monthly - Data range: from 1 June 2005 to 2 February 2020, accessed on 2 February 2020 at 5:10 pm GMT. - Please note: Past performance is not a reliable indicator of future results.

Having the ability to view the chart is the first step towards trading the index. Follow the next steps carefully to download your free trading platform provided by Admiral Markets, so you too can start to view the FTSE100 chart and begin your journey to trading it.

How to view the current FTSE100 chart

For many traders and investors who want to get a quick snapshot of the UK stock market, viewing the share prices of all 100 companies can be cumbersome. Therefore, many traders and investors simply look at the FTSE100 index chart which is calculated using all the prices of the 100 companies listed in the index.

You can view this chart easily by downloading the MetaTrader 5 trading platform which is provided by Admiral Markets UK Ltd for free. After downloading it you can view historical prices of, and trade on, a wide range of instruments covering multiple asset classes. Having the platform will also prove useful in a later section when we go through a step by step process on how to trade the FTSE100 index and constituent shares.

You can start your free download by clicking the banner below:

Trade With MetaTrader 5

Once you've downloaded the free platform, follow these steps to view the current FTSE100 chart.

  1. Open your MetaTrader trading platform.
  2. Open the Market Watch window by selecting View from the tabs above and then Market Watch, or by pressing Ctrl+M on your keyboard.
  3. Right-click on the Market Watch window and select Symbols.
  4. Search for your symbol, such as the FTSE100.
  5. You will now be able to see the FTSE100 contract specification which details, among other things, the expiration date of the index and the opening and closing times of the market, as shown below:

MetaTrader 5 Symbols window

  1. After clicking OK, this will add the market to your Market Watch window.
  2. From the Market Watch window, you can simply select the FTSE100 symbol and then drag it onto the chart, as shown below.

FTSE100 price chart on MetaTrader

A chart of the FTSE100 index CFD on the MetaTrader 5 platform provided by Admiral Markets.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

You can also repeat the process to view a chart of current and historical prices for each of the 100 companies listed in the index. In fact, with Admiral Markets you can view a chart of, and trade on, a wide variety of UK shares listed on the London Stock Exchange. The list is available to view in the Symbols window in the MetaTrader platform, under Stock CFDs (Contracts for Difference), as shown below:

MetaTrader 5 Symbols window

A snapshot of the Symbols window in MetaTrader 5 provided by Admiral Markets showing the Barclays instrument specification, in the UK (LSE) tab, under Stock CFDs.

Who are the FTSE100 members?

As the FTSE100 was launched in 1984, the list of constituent companies has changed due to increasing and decreasing market capitalisation, as well as mergers and acquisitions. Many individuals would also assume that all the companies in the index are British but this is not a requirement as the company just needs to be listed on the LSE. In fact, many companies are foreign-based and make a large portion of their income overseas.

As of 30 January 2020, the top 10 companies in the FTSE 100 by market capitalisation were the following:

FTSE100 Market Cap

Top 10 companies in the FTSE100 by market capitalisation.

Source: Markets Insider

Some companies such as HSBC, Barclays, BP, GlaxoSmithKline, and others, are well-known to investors from all over the world. However, some companies like the Compass Group may not be as well-known to investors outside of the UK as this particular company focuses on contract catering services only in the UK and Ireland.

A full list of the FTSE100 members can be found in the constituents tab under the FTSE 100 web page on the London Stock Exchange website, as shown below:

FTSE100 Constituents

FTSE100 constituent list on the London Stock Exchange website.

Source: London Stock Exchange

What moves the FTSE100 market?

There are a variety of factors that affect the movement of the FTSE100 market. The main two are the economy and politics.

During periods of economic growth, stock markets typically move higher. This is due to the fact this environment usually translates into higher employment, more consumer spending and more profit for companies. If companies start to make more profits then investors tend to buy more shares in those companies which, in turn, helps to push up the overall stock market.

Therefore, investors pay close attention to economic data such as:

  • Inflation reports.
  • Employment numbers.
  • Central bank policy on interest rates.
  • Retail sales and consumer spending figures.
  • Currency movements, and more.

You can view a calendar which shows all the UK-related economic news announcements on the Admiral Markets Forex Calendar web page. For some traders, it can be challenging to trade over such volatile economic news announcements. This is why it's important to have access to the right trading products. For example, Admiral Markets offers CFD (Contract for Difference) trading accounts which means a trader could potentially profit from rising and falling markets.

Not only that, but those who choose to use the Admiral Markets fast and free trading platform also benefit from a negative balance protection policy which will protect you from adverse movements in the market, as well as the ability to:

  • Open multiple types of trading and investing accounts such as Invest.MT5 where you can buy shares in companies from 15 global stock exchanges and receive free free-time market data.
  • Open a CFD (Contract for Difference) trading account, such as Trade.MT4 or Trade.MT5 to go long and short a market and potentially profit from rising and falling markets, using leverage.
  • Access the fastest and most popular trading platform in the world, MetaTrader, for Web, Windows, Mac, iOS and Android operating systems.
  • Trade on multiple asset classes such as UK stocks and global stock indices.

Did you know you can access all of these features and test drive Admiral Markets as a broker by opening a FREE demo trading account? This allows you to trade in a risk-free environment until you are ready for a live trading account. To open your free demo account, simply click the banner below:

Trade With A FREE Demo Trading Account

How to trade FTSE100 share prices and the index

Once you've opened your live or demo trading account and downloaded your free trading platform you can then start to make trading decisions on FTSE100 share prices and the FTSE100 index. To place a buy or sell position on an instrument, use the following steps:

  1. Open MetaTrader, find the symbol of the market you want to trade and drag it on to the chart from the Market Watch window.
  2. Right-click on the chart.
  3. Select Trading.
  4. Select New Order, or press F9 on your keyboard.
  5. A trading ticket will open for you to input your entry price, stop loss and take profit levels and unit size (volume).

FTSE100 price chart with trading ticket in MetaTrader

A snapshot of the MetaTrader 5 trading platform provided by Admiral Markets showing a chart and trading ticket for the FTSE100 index CFD.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

To learn more about how to buy and sell different instruments in the MetaTrader platform, watch the video below!

Get started with a FTSE100 trading strategy

One of the simplest ways to get started trading the FTSE100 is to use technical analysis price action patterns to help identify turning points in the market and, therefore, areas to buy and sell.

A popular price action pattern is the 'engulfing candlestick pattern' of which there are two types: the bearish engulfing candle pattern and the bullish engulfing candle pattern.

Bearish engulfing pattern

An example of the bearish engulfing candlestick pattern.

The bearish engulfing candle pattern, as shown above, is based on two candlesticks. The most important candle is the second one which engulfs the range (high to low) of the previous candle. On the second candle buyers first push the market up, breaking the high of the previous candle. However, during the same candle sellers step in and push it all the way down breaking the low of the previous candle and closing lower. This represents a significant shift in momentum to the downside.

Bullish engulfing pattern

An example of the bullish engulfing candlestick pattern.

The bullish engulfing candle pattern, as shown above, is based on two candlesticks. The most important candle is the second one which engulfs the range (high to low) of the previous candle. On the second candle sellers push the market down, breaking the low of the previous candle. However, during the same candle buyers step in and push it all the way back up breaking the high of the previous candle and closing higher. This represents a significant shift in momentum to the upside.

Identifying engulfing candles on the FTSE100 index chart

The price chart below is of the weekly timeframe.

FTSE100 price chart in MetaTrader

A screenshot of the MetaTrader 5 trading platform provided for by Admiral Markets, showing the FTSE100 index CFD chart with yellow boxes showing bearish engulfing candlestick patterns and blue boxes showing bullish engulfing candlestick patterns.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

In most cases - but not all - the market did indeed continue in the direction of the bullish or bearish engulfing candlestick pattern. Traders can use additional technical tools and analysis to further refine the basic engulfing candlestick pattern. To learn more, simply visit the Admiral Markets Educational library.

Alternatively, if you would like to learn more about technical and fundamental analysis then why not register for the Admiral Markets Trading Spotlight webinar? In these free live sessions, taken three times a week, professional traders will show you a wide variety of technical and fundamental analysis trading techniques you can use to identify common chart patterns and trading opportunities in a variety of different markets.

To reserve your spot in these complimentary webinars, simply click on the banner below:

Free Trading Webinars

Why trade the FTSE100 with Admiral Markets?

If you trade the FTSE100 with Admiral Markets, you can:

  • Use leverage of up to 1:500 for professional categorised clients and up to 1:30 for retail categorised clients. This means you could control a large position with a small deposit. You can learn more about the benefits and risks in the 'What is Leverage in Forex Trading?' article.
  • Trade with a well-established, highly regulated company including regulation from the UK Financial Conduct Authority, the Australian Securities and Investments Commission, the Cyprus Securities and Exchange Commission and the Estonian Financial Supervision Authority.
  • Access the fastest and most popular trading platforms from MetaTrader for PC, Mac, Android and iOS operating systems.
  • Benefit from a negative balance protection policy for peace of mind.
  • Trade the FTSE100 commission-free!

Admiral Markets Index CFD Trading Advantages

If you're feeling inspired to start trading, or this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that Admiral Markets provides the ability to trade with Forex and CFDs on up to 80+ currencies, with the latest market updates and technical analysis provided for FREE!

To open your trading account, simply click on the banner below:

Trade Forex & CFDs

About Admiral Markets

Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or recommendation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.