How to Trade NAS100 (Nasdaq 100): Complete Beginner’s Guide

The Nasdaq 100 (often called NAS100) is one of the most exciting and popular indexes for traders. It is packed with the world’s biggest technology companies, like Apple, Microsoft, and NVIDIA, which makes it very volatile. This high volatility creates many opportunities but also significant risk.

This guide is designed for beginners. It will answer how to trade NAS100, explain what moves it, and help you build a simple strategy to get started.

1. What Is NAS100 (Nasdaq 100 Index)?

The NAS100 (Nasdaq 100 Index) is a stock market index that represents the 100 largest and most active non-financial companies listed on the Nasdaq stock exchange (Nasdaq, n.d.).

This index is famously “tech-heavy.” It excludes financial companies (like banks) and is instead dominated by the world’s biggest technology and growth corporations. These include “Big Tech” names like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), and Meta (META).

Because it is full of these growth-focused companies, the NAS100 is known for its high volatility and strong, clear price trends. This high level of price movement is precisely what makes it so attractive to short-term traders, offering many opportunities for scalping, swing, and position trading.

(Note: Brokers often use different ticker symbols for the Nasdaq 100 CFD, such as NAS100, US100, USTECH, or NQ. This can be confusing, but NAS100 vs us100 and other symbols all refer to the same underlying index.)

2. Why Traders Choose to Trade NAS100?

The NAS100 is one of the most popular indices in the world for short-term traders. Its heavy concentration in technology and growth stocks gives it a unique personality that sets it apart from broader indices like the S&P 500. This combination of high volatility (fast price moves) and deep liquidity (easy to get in and out) creates a compelling environment for traders.

Here are the main reasons why so many traders choose to focus on the NAS100:

• High volatility & liquidity: The NAS100 is famous for its large price swings, which create many trading opportunities. It also has very high liquidity, making it easy to enter and exit trades.
• Diversified exposure: Instead of betting on just one company, trading one NAS100 contract gives you diversified exposure to 100 of the top non-financial companies at the same time.
• 24-hour market access: While the stock market closes, the index can be traded almost 24 hours a day, five days a week, through derivative products like cfd trading or futures contracts.
• Tight spreads on major brokers: The NAS100 is extremely popular. This high competition means most major brokers (like IC Markets, Exness, FXTM, XTB, etc.) offer very tight spreads, which keeps trading costs low.

3. What is the NAS100 Market Structure?

To trade the NAS100 successfully, you must first understand what moves it. The index’s price is heavily influenced by a few key factors, with technology and interest rates being the most important.

• Interest rates (Fed policy): The Nasdaq 100 is very sensitive to interest rate changes. As a “growth” index, its companies rely on borrowing for innovation. Higher interest rates (from the Federal Reserve) are generally bad for the NAS100, while lower rates are good.
• Corporate earnings reports: The index’s price is directly impacted by the quarterly earnings reports of its largest companies. A strong report from Apple or Microsoft can pull the entire index up.
• Tech news & AI innovation: Because the index is so tech-heavy, it moves on big technology news, such as AI breakthroughs, new product announcements, or regulatory changes.
• Global risk sentiment: The NAS100 is considered a “risk-on” asset. When global risk sentiment is positive, investors buy tech (Nasdaq 100 rises). When investors are fearful (“risk-off”), they sell tech (Nasdaq 100 falls).
• Big tech dominance: This is the most important structural point. The index is not evenly balanced. A few “megacap” stocks (like Apple, Microsoft, Amazon, NVIDIA, and Meta, often called FAANG) make up over 40% of the entire index’s value. The price of these few stocks has an enormous impact on the NAS100.

4. How to Trade NAS100 Like a Pro: Step-by-Step Guide

This guide provides a basic framework for how to trade NAS100 as a beginner. The 6 steps below emphasize preparation and strong risk management.

4.1. Step 1: Choose a Reliable Broker

First, you must choose a reliable broker. Do not just pick the one with the flashiest ad. Look for a broker that is well-regulated by a major authority (like ASIC, CySEC, or the FCA). This ensures your funds are safe.

You also need a broker that offers good trading conditions for indices, specifically NAS100 cfd trading. Check their typical spreads (the lower, the better), execution speed, leverage options, and any overnight swap fees.

4.2. Step 2: Select the Right Trading Platform

Next, select the right trading platform. Most top brokers offer popular, powerful platforms. MT4, MT5, TradingView, or cTrader are all excellent choices. You will use this platform’s software to view live charts, use technical analysis tools, and place your orders.

4.3. Step 3: Analyze the Market

Before trading, you must analyze the market to form a directional bias (do you think the price will go up or down?). A good strategy combines two types of analysis:

• Fundamental: Check the news. Is there a big Fed (interest rate) announcement today? Are Apple or NVIDIA reporting earnings this week? (See Section 3).
• Technical: Look at the charts. What are the main market trends? Use simple tools like moving averages, RSI, or trendlines to identify clear support/resistance levels and find low-risk entry/exit points.

4.4. Step 4: Define Risk & Lot Size

This is the most critical step for survival. Define your risk before you enter the trade.

• Risk rule: A common rule is to risk no more than 1-2% of your total account balance on a single trade.
• Stop-Loss: Based on your chart analysis, decide exactly where you will exit if you are wrong. For example, “If I buy, I will place my stop-loss just below the most recent swing low (support level).”
• Lot size: Once you know your entry and stop-loss price, calculate the correct lot size forex so that if your stop-loss is hit, you only lose the 1-2% you planned.

4.5. Step 5: Place the Trade

Once your analysis is done and your risk plan is set, place the trade. Enter the market based on your strategy’s signal. This could be a breakout from a price range, a pullback (a dip) to a moving average in a strong trend, or a simple trend continuation signal.

4.6. Step 6: Monitor and Adjust

After your trade is live, monitor and adjust it. Be aware of major economic news releases (like CPI, FOMC, or NFP). These events can cause sudden, high volatility in the NAS100 because they directly impact interest rate expectations, which heavily influence tech stock valuations.

5. What are the Best Trading Strategies for NAS100?

The NAS100’s high volatility makes it ideal for momentum trading, which means different strategies can work, from simple trend-following to advanced Smart Money Concepts. Here are four popular strategies.

5.1. Trend-Following Strategy

Trend-following is often the best NAS100 strategy for beginners. The goal is to identify the main trend and only trade in that direction.

• Identify the Trend: Use Moving Averages (e.g., a 20-period EMA and a 50-period EMA) on a 1-hour or 4-hour chart. If the fast EMA (20) is above the slow EMA (50), the trend is up.
• Entry Signal: Wait for the price to pull back (dip) to the moving averages. A common buy signal is when the price bounces off the MAs and the RSI indicator is above 50 (confirming bullish momentum).

5.2. Breakout Strategy

The NAS100 often pauses in a “consolidation” (a tight sideways range) before making a large, fast move.

• Identify the range: Find these “consolidation zones” (also known as liquidity zones) on a chart where the price is trapped between support and resistance.
• Trade the breakout: A breakout occurs when the price strongly breaks above resistance or below support. These breakouts often start a major new trend.
• Confirmation: Traders confirm the strength of a breakout by looking for high volume or by using an indicator like the ADX (a reading above 25 signals a strong trend).

5.3. Scalping NAS100

Scalping is a very fast-paced strategy used by advanced traders to catch tiny price moves.

• Timeframe: This strategy uses very short timeframes, like the 1-minute (M1) or 5-minute (M5) charts.
• Tools: Scalpers use fast indicators like RSI, Stochastics, or Bollinger Bands to quickly identify overbought or oversold conditions for entry and exit.
• Best Times: This strategy is most effective during high-volatility periods, such as during a major news release or at the New York session open.

5.4. Swing Trading Strategy

Swing trading is a medium-term strategy for traders who do not want to watch the market all day.

• Timeframe: Traders hold positions for one to five days, typically using the 4-hour or Daily chart.
• Tools: Swing traders often combine price action (like candlestick patterns, Smart Money Concepts, or Forex order blocks) with Fibonacci retracement levels to find high-probability entry points after a pullback in a major trend.

6. What is the Best Time to Trade Nasdaq 100 Effectively?

The NAS100 is a US-based index, so its volatility and liquidity are highest when the US market is open. A good strategy involves trading when the market is most active.

(Note: Times below are approximate and shown in GMT+7 for reference).

• The US Session (14:30 – 23:00 GMT+7): This is the best time to trade. Volatility often starts in the pre-market session, but the highest liquidity and clearest moves happen at the official open of the Nasdaq stock market.
• The London Session (14:00 – 18:00 GMT+7): The overlap between the London and US sessions is also a very active time. It is often when the main trend for the day is established, even before the US market fully opens.
• Times to avoid: Traders often avoid the overlap between the Asian and European sessions (morning in Europe). During this time, the NAS100 is often sideways (choppy, with no clear direction), and spreads can be higher due to lower liquidity.

7. What are Fundamental Factors Influencing the Nasdaq 100?

The Nasdaq 100 is highly sensitive to economic news and market sentiment. Understanding what moves the NAS100 is key to a successful trading strategy. These are the main factors to watch.

• Interest rates and Fed policy: This is the most important factor. The NAS100 is an index of “growth” stocks, which are very sensitive to interest rates.
  • Higher interest rates (or the fear of them) are generally bad
  • Lower interest rates (or “dovish” Fed policy) are generally good
• Tech company earnings: Because the index is dominated by “Big Tech,” its price is directly impacted by the quarterly earnings reports of companies like Apple, Microsoft, NVIDIA, and Amazon. A big miss or beat from one of these companies can move the entire index.
• U.S. economic reports: Key economic data reports can cause high volatility. Traders watch these numbers closely:
  • CPI (Inflation)
  • GDP (Economic Growth)
  • NFP (Non-Farm Payrolls / Jobs)
  • PMI (Business activity)
• Global market sentiment: The NAS100 is a “risk-on” asset. When global investors are feeling confident and have a high risk appetite, they buy tech stocks, and the NAS100 rises. When they are fearful (“risk-off”), they sell tech stocks, and the index falls.

8. What are Risk Management Tips for NAS100?

Trading the NAS100 is high-risk due to its volatility. A good strategy is nothing without strong risk management. Here are the most important NAS100 trading tips.

• Always set a clear stop-loss: This is the most important rule. Set a clear stop-loss order for every trade. Never risk more than 1-2% of your total account capital on a single trade. This protects you from large, unexpected losses.
• Avoid trading during major news: Do not trade during major news events (like the Fed interest rate decision or NFP). The volatility can be extreme, leading to huge slippage and unpredictable price spikes.
• Use a trailing stop or take partials to protect profits: If your trade is profitable, use a trailing stop. This is a stop-loss that automatically moves up as the price moves in your favor, locking in your profits while still giving the trade room to grow. Taking partials (closing part of your position) is another effective method.
• Keep a trading journal: Write down every trade you take. Record your entry, exit, stop-loss, and the reason you took the trade. Reviewing your trading journal is the best way to find your mistakes, see what works, and optimize your performance over time. 

9. What are Common Mistakes When Trading Nasdaq 100?

Many traders are attracted to the NAS100’s volatility but fail because of these common trading mistakes:

• Over-leveraging: The most common error is using too much leverage. Because the NAS100 moves so fast, a small position size can still create large, rapid losses, leading to a margin call.
• Emotional trading (no plan): This involves chasing the price out of “FOMO” (Fear Of Missing Out) or panic-selling during a normal dip, rather than following a tested NAS100 trading strategy.
• Poor stop-loss management: This includes failing to set a stop-loss or, worse, moving a stop-loss further away (widening the risk) during a losing trade.
• Chasing news: Traders often react instantly to a news headline without waiting for technical confirmation. They end up buying the exact top or selling the exact bottom of the move.

10. Frequently asked questions about Trading NAS100 (Nasdaq 100)

11. Conclusion

The NAS100 is an ideal index for traders who are comfortable with high volatility. It offers many opportunities but also carries significant risk.

Successfully learning how to trade NAS100 is not just about a single strategy; it is about combining sound technical analysis, strict risk management, and personal discipline. By mastering this combination, a trader can learn to leverage the power of the Nasdaq 100 to build consistent profits.

To learn more about specific trading strategies, follow PipRider for in-depth guides and analysis.