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S & P 500 Index - Standard and Poor's 500 Index

The Standard and Poor's 500 Index is a stock index that tracks the capitalization of the five hundred stocks that represent major industries in the American economy. The list of 500 corporations is made up of stocks listed in NYSE and NASDAQ.

The S&P 500 just like the Dow Jones Industrial Average Index is more volatile than most of the other Top Indices, The S&P 500 index will over the longterm trend upwards but it will have more price pull back and more consolidations than other indices. Traders may prefer to trade other indices other than this one if they are more accustomed and used to trading more stellar & robust trends found in other top indices.

One of the reason this index has more oscillations than other indices is because it has more component stocks than other indices. This index also has got a weighting factor in its method of calculation which also contributes to making the index more volatile.

Trading Strategy for S&P500 Index - S&P500 Index Trading Strategy - S & P 500 Index

The S & P 500 Index Chart

The S&P 500 Index chart is shown above. On the illustration shown above this trading instrument is named as US500CASH . As a fx trader you want to find a broker that provides this The S&P 500 Index chart so that you as a trader can start to trade it. The example above is of S&P 500 Index on the MT4 FX and Indices Software .

Other Info about S & P 500 Index

Official Symbol - SPX:IND

The 500 component/constituent stocks which make up the S&P 500 Index are picked from the major industries in the American economy. The calculation of this index is however different compared to the other Indices: the price component of the 500 stocks also has got a weighting factor that makes this index more volatile than others.

Strategy for Trading S & P 500 Index

The S&P 500 Index method of calculation makes it more volatile thence there are more wide swings in the price movements of this index. Although this index generally moves up over the long-term because the American economy also displays robust growth and is also the largest/biggest economy in the world.

As a fx trader wanting to trade this index, be prepared for wider price swing and a little more volatility.

As a stock index trader you want to be biased and keep buying as the stock index heads and moves upward. When the US economic and business environment is performing & doing well and good (most times it's doing & performing well and good) this upwards trend is more than likely to be ruling. A good strategy would be for traders to buy the dips.

Contracts and Specifications

Margin Required Per 1 Lot - $ 12

Value per 1 Pip(Point) - $ 0.1

Note: Even though the general and overall trend is in general upwards, as a forex trader you have got to factor in the daily market volatility, on some days the stocks may oscillate or even retrace, the retracement might also be substantial sometimes & hence as a forex trader you need to time your trade entry precisely using this strategy: Stock indices strategy and at the same time use the suitable and proper and suitable money management rules & guidelines just in case of more unexpected market trend volatility. About equity management guidelines & strategies lessons: What's money management and money management methods.

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