Trading in France – Day Trading and Swing Trading Perspectives

With a GDP of about 2.8 trillion dollars, France is the world’s fifth-largest economy and the second-largest economy in Europe, after Germany. It is home to the headquarters of the biggest stock exchange in Europe, so when it comes to financial trading, France is a popular clime for day trading and swing trading. Want to know about trading in France?

Home to Euronext Paris (EURONEXTPAR), the headquarters of the largest stock exchange in the EU, France is Europe’s top destination for financial trading. Both the markets and the regulations make trading in France (day trading, swing trading) attractive. Being a member of the EU, trading in France is regulated by both the French and EU authorities. As a retail trader, you are protected by the MiFID 2 act of the EU.

In this post, we answer some questions about trading in France — day trading and swing trading.

The top markets for day trading in France

With the tight integration of the European markets, day trading in France is not limited to only the markets that are domiciled in France.

Nonetheless, France is home to Europe’s top equity market — Euronext Paris (EURONEXTPAR), which is France’s sole stock exchange. Established by Napoleon’s order in 1802, under the name Paris Bourse, the exchange is based in Paris, the capital of France and a major financial hub in Europe. In the year 2000, Paris Bourse merged with the Amsterdam Stock Exchange and the Brussels Stock Exchange to establish Euronext, the pan-European exchange that is now the largest in continental Europe. The exchange is regulated by the Autorité des Marchés Financiers (AMF) and is also subject to EU rules.

Electronic trading is carried out using the Universal Trading Platform (UTP), which is being replaced by Optiq, a new multi-market trading platform for trading stocks, bonds, and ETFs.

Some of the most popular stocks trading on the exchange include Total, L’Oréal, Sanofi, Airbus, and BNP Paribas. The main stock index is the CAC 40, a market-cap-weighted index that tracks the performance of the 40 largest stocks on the exchange. CAC 40 is used as the benchmark index of the French stock market, and its components are reviewed quarterly.

There are other related indices, including the CAC MID 60, which tracks the performance of the second 60 largest companies, and the CAC 40 GR, a gross total return index that tracks the capital gains of the CAC 40 companies over time. European indices such as the Euronext 100 index, which tracks the performance of the largest and most liquid European stocks, and the EURO STOXX 50, an index of the top 50 stocks in the Eurozone, can also be traded in France.

Apart from equities and indices, day traders in France have access to the futures market. Although the Marché à Terme International de France (MATIF), a futures exchange and a clearing house in France, was absorbed in the merger of the Paris Bourse with Euronext NV to form Euronext Paris, futures traders in France can access LIFFE Connect, the electronic trading platform of the London International Financial Futures Exchange and an affiliate of Euronext.

In the area of forex trading, traders in France have access to the forex market via some major French banks and online forex brokers. The French forex market is regulated through Autorité de Contrôle Prudentiel et de Résolution (ACPR).

The most popular swing trading strategies in France

There are many swing trading strategies used by traders in France. These are some of them:

• Range trading: This strategy is used in a range-bound market. It involves buying at the lower boundary of the range and selling at the upper boundary.
• Breakout trading: With this strategy, the trader aims to trade the breakout of price above a resistance level or below a support level. The idea is to ride the momentum that often follows a breakout.
• Retracement reversals in a trend: This involves trading the individual impulse waves in a trending market. Here, the trader enters the market when the pullback against the trend is over so that they can ride the next impulse wave in the direction of the trend.

How to perform technical analysis on French stocks

Performing technical analysis on French stocks is like performing technical analysis on any other asset. Open the stock’s chart and study the price action or attach your preferred indicators to analyze how the market has been moving so you can predict its most likely future moves.

Some of the tools and indicators you can use in your analysis include trendlines, channel lines, moving average indicators, the RSI, stochastic, and MACD.

The influence of economic indicators on French markets

As with any other market, macroeconomic indicators affect French markets. The economic indicators that affect the French markets are those from France and the European Union. The effects, however, vary with the market considered. For example, a low interest rate would be good news for the equity market, but not the bond or forex market. Similarly, high inflation may be good news for the Euro but not the equity market.