What is Dow Jones 30 Trade Strategy? - Tutorial to Trade DowJones30 Stock Index
DowJones30 Trade Chart
DowJones30 chart is shown and portrayed above. On the above example this instrument is named USA 30CASH. As a trader you want to find a broker that provides DowJones30 chart so that you can begin to trade it. The example That is illustrated above is that of DowJones30 Stock Index on the MetaTrader 4 Forex Software.
Strategy for Trading DowJones30 Stock Index
DowJones30 Stock Index method of calculating make Dow 30 index more volatile & hence there are more wide swings in the price movement of this stock index. Although this stock index in general moves upward over long-term because the America economy also shows strong growth & is also the biggest economy in the world.
As a trader wanting to trade this stock index, be prepared for wider price swing and a little more volatility.
As a trader you want to be biased and keep buying as the index moves upward. When the America economy is doing well (most of the times it is doing well) this upward trend is more than likely to be ruling. A good stock index trade strategy would be to buy the dips.
During Economic SlowDown & Recession
During economic slowdown and recession times, firms start to report lower profits & lower growth prospect. It is because of this reason that investors begin to sell stocks of companies that are reporting lower profits and hence the Stock Index tracking these specified stocks will also start to move downwards.
Therefore, during these times, market trends are likely to be heading downwards and you as a trader should also adjust your trade strategy accordingly to suit the prevailing downward trends of the index that you are trading.
Contracts and Specs
Margin Required Per 1 Lot - $150
Value per Pips - $ 0.5 dollars
NB: Even though general trend is generally moves upward, as a trader you have to consider & factor in the daily market volatility, on some of the days the Indices may move in a range or even retrace and pullback, market retracement move may also be a significant one at times & therefore as a trader you need to time your trade entry precisely when using this trade strategy & at same the time use proper equity management guidelines just in case there is more unexpected volatility in the market. About money management methods in indices topics: What's Stock Index money management & equity management methods.
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