What Is the Nasdaq and Why Do Traders Watch It?
The Nasdaq 100 (also known as US100) tracks the 100 largest non-financial companies listed on the Nasdaq Stock Exchange, with a heavy weighting toward technology and innovation-driven businesses. Companies such as Apple, Microsoft, Amazon, Meta, Alphabet, Nvidia, and Tesla make up a significant portion of the index.
For traders, the Nasdaq 100 is particularly attractive because of its high volatility, deep liquidity, and strong directional trends. It is one of the most responsive indices to changes in market sentiment, interest rate expectations, and technology sector news.
How to Trade the Nasdaq as a CFD
Individual retail traders cannot buy the Nasdaq 100 index directly. Instead, the most accessible way to trade it is through a Contract for Difference (CFD). With a CFD on the Nasdaq 100 (US100), you speculate on whether the index will rise or fall, without owning any of the underlying stocks. For a full explanation of how CFDs work, read our dedicated guide on what CFDs are and how they work.
What Drives the Nasdaq 100?
Federal Reserve policy:
the Nasdaq is highly sensitive to US interest rate expectations. When the Fed signals rate cuts, technology stocks tend to rally strongly, pushing the index higher.
Corporate earnings:
the quarterly earnings reports of major Nasdaq constituents can move the index sharply in either direction.
Inflation data:
CPI and PCE releases influence rate expectations, which directly affect Nasdaq valuations.
Risk sentiment:
in risk-off environments the Nasdaq often underperforms defensive indices. In risk-on rallies, it tends to outperform.
US dollar strength:
a stronger dollar can reduce overseas earnings when converted to USD, creating a headwind for the index.
Technical Analysis on the Nasdaq
The Nasdaq 100 is well-suited to technical analysis due to its trending behaviour and respect for key chart levels. Common approaches include using moving averages (20 EMA, 50 EMA, 200 EMA) to identify trend direction, trading breakouts from consolidation ranges, and applying Fibonacci retracement levels during corrections within a larger uptrend. For a full introduction to chart reading techniques applicable to indices, refer to our guide on how to read forex charts.
Trading Hours for the Nasdaq
The Nasdaq Stock Exchange operates from 09:30 to 16:00 Eastern Time (ET), Monday to Friday. However, Nasdaq CFDs on MetaTrader 5 can be traded almost around the clock on weekdays, including pre-market and after-hours periods. The highest volatility and tightest spreads typically occur during the regular US session and around major economic announcements.
Risk Management for Nasdaq Trading
The Nasdaq 100 can experience significant intraday swings, particularly around earnings releases, Fed meetings, and major US economic data. A 1% move on the Nasdaq 100 at an index level of 20,000 represents a 200-point move. Always define your stop-loss before entering a Nasdaq position and ensure your risk per trade is aligned with your account management rules. For a structured approach to position sizing and capital protection, refer to our guide on risk management in forex and CFD trading.
Accessing the Nasdaq on Bullwaves
Bullwaves offers the Nasdaq 100 (US100) as a CFD instrument on MetaTrader 5. You can access it through all account types, including Classic, VIP, and ECN. To get started, explore the Bullwaves account options and open a demo account to practise Nasdaq trading with virtual capital before going live.
Final Thoughts
The Nasdaq 100 is one of the most dynamic and actively traded indices in the world. Its strong trends, high liquidity, and responsiveness to macroeconomic events make it an excellent instrument for both day traders and swing traders. With a solid understanding of what drives the index and a disciplined risk management approach, the Nasdaq can be a valuable addition to your trading portfolio.
Risk Warning: Trading index CFDs involves significant risk. The Nasdaq 100 is a highly volatile instrument. Your capital is at risk and losses can exceed your deposit.
