What is DowJones30 Strategy? - Lesson to Trade DowJones30 Index
DowJones30 Trade Chart
DowJones30 chart is shown & illustrated above. On the above illustration this financial instrument is named USA 30CASH. As a trader you want to find a broker that provides DowJones30 chart so that you as a trader can begin to trade it. The example That is shown above is that of DowJones30 Index on the MT4 Forex Platform Software.
Strategy for Trading/Transacting DowJones30 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 index. Although this index in general moves upwards over long-term because the US economy also shows strong growth and 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 indices trader you want to be biased & keep on buying as the index heads & moves upwards. When the America economy is doing well (most of the times it is doing well) this upwards market trend is more likely to be the one that is ruling. A good stock index trading strategy would be to buy the dips.
During Economic SlowDown & Recession
During economic slow-down and recession times, corporations begin to report slower earnings and revenues, slower profits and lowers growth projection. It's because of this reason that investors begin to sell stocks of companies that are reporting & announcing lower profits and hence the Stock Index tracking these specified stocks will also begin to move downward.
Therefore, during these times, market trends are a lot more likely to be heading downwards and you as a trader should also adjust your trading strategy accordingly to suit the prevailing downwards trends of the index which you as a trader are trading.
Contracts & Specs
Margin Required Per 1 Lot - $150
Value per Pips - $ 0.5 dollars
NB: Even though general and overall trend is generally moves upwards, as a trader you've got to consider and factor in the daily market volatility, on some of the days the Indices may move in a range or even retrace & retracement, market retracement/correction move may also be a substantial one at times & hence you as the trader you need to time your entry strictly when using this strategy & at same the time use suitable & appropriate/proper money management guidelines & principles just in case there is unexpected volatility in the market. About money management techniques & guidelines in indices topics: What is Index money management techniques & guidelines & equity management system/plan.
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