Trade Forex Trading

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

The Standard & Poor's 500 Index is a stock index that tracks the capitalization of 500 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 pullback and more consolidations than other stock indices. Traders may prefer to trade other indices other than this one if they are more accustomed to trading the more stellar 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 a weighting factor in its method of calculation which also contributes to making it more volatile.

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

The S and P 500 Index Chart

The S&P 500 Index chart is shown above. On the example above this 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 can start to trade it. The example above is of S&P 500 Index on the MT4 FX and Indices Software .

Other Information about S and P 500 Index

Official Symbol - SPX:IND

The 500 component stocks that 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 other Indices: the price component of the 500 stocks also has a weighting factor that makes this index more volatile than others.

Strategy for Trading S and P 500 Index

The S&P 500 Index method of calculation makes it more volatile therefore 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 shows strong growth and is also the largest economy in the world.

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

As a trader you want to be biased & keep buying as the index moves up. When the US economy is doing well (most of the times it is performing well) this upward trend is more likely to be ruling. A good trade strategy would be to buy the dips.

Contracts & Specifications

Margin Required Per 1 Lot - $ 12

Value per 1 Pip - $ 0.1

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

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