Dow Jones Industry Average or Dow 30 - Wall Street 30 Stock Index
Dow Jones Industry Average or Dow 30 is a market indices that keeps track of 30 of the largest stocks in the US. The stocks which are used to calculate this constituent are chosen from 30 biggest corporations in the US.
The Dow Jones is the most popular & most followed Stock Indices globally. The Dow Jones Industry Average originally tracked the performance of Industrial stocks but has changed to include stocks from other sectors of the economy. The main criteria being the stocks chosen are from the largest US companies.
The Dow Jones is more volatile than most of the other Top Stock Indices, The Dow Jones though will over the long term trend upwards it'll have more price pull backs and more consolidations than other Indices. Traders may prefer to trade other indices other than the Dow Jones Industry Average if they are more used to trading more stellar trends found in other top stock indices.
The DowJones30 Stock Index Trade Chart
The DowJones30 Stock Index chart is displayed & displayed above. On the above example this instrument is named US 30CASH. As a trader you want to find a broker that provides DowJones30 Stock Index chart so that you as a trader can begin to trade it. Example displayed above is of DowJones30 Stock Index on the MetaTrader 4 Forex Trading Software.
Other Information about DowJones30 Stock Index
Official Symbol - DJI
The 30 components stocks which makes up DowJones30 Stock Index are chosen from the top America companies. The calculation of this stock index is however different compared to other Stock Indices; the price constituent of the 30 stocks is sub-divided by a common divisor so as to come up with this stock index. This makes this stock index more volatile than others.
Strategy of Trading DowJones30 Stock Index
DowJones30 Stock Index approach of calculating make Dow 30 index more volatile and therefore there are much more wider swings in the price movement of this stock index. Although this stock index generally upwards over long-term because the US economy also shows strong growth & is also the largest economy in the world.
As a trader wanting to trade this index, be prepared for wider price swing and a little more volatility.
As a trader you want to be biased & keep buying as the stock index moves upwards. When the US economy is performing good (most times it's performing good) this upwards trend is more likely to be in-favor. A good indices trade strategy would be to buy dips.
During Economic SlowDown and Recession
During economic slowdown and recession times, companies start to report lower profits and lower growth prospect. It is due to this reason that traders start to sell stocks of companies which are reporting lower profits and therefore the Stock Indices tracking these specified stocks will also begin to move downwards.
Hence, during these times trends are likely to be heading downward and you as a trader should also adjust your strategy accordingly to suit the prevailing downwards trends of the stock index that you're trading.
Contracts and Specifications
Margin Required Per One Lot - $ 150
Value per Pips - $ 0.5
NB: Even though general trend is generally upwards, as a trader you have to consider & factor in the daily market volatility, on some of the days the Stock Indices may oscillate or even retrace & pullback, market pull back move may also be a significant one at times and therefore as a trader you need to time your trade entry precisely using this strategy: Stock Index strategy and at same time use proper money management rules just in case there's more unexpected volatility in the market movement. About equity management methods in indices topics: What is index equity management and money management methods.
