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

Standard & Poor's 500 is a stock index that tracks the capitalization of the 500 stocks which represent major industries in USA economy. The list of 500 corporations is made up of stocks illustrated on NYSE and NASDAQ.

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

One of the reason this stock index has more oscillations than other stock index is because it has more component shares than other index. This stock index also has got a weighting component/constituent in its calculation which contributes to making it more volatile.

Standard & Poors 500 Index

The S and P 500 Trade Chart

S&P 500 chart is shown & displayed above. On example put on display above this trading instrument is named as US500CASH. As a trader you want to find a broker that offers S&P 500 chart so that as you as a trader can begin to trade it. The example Which is illustrated above is that of S&P 500 on MT4 FX and Index Platform.

Other Info about S & P 500 Index

Official Index Symbol - SP:IND

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

Strategy to S & P 500 Index

S&P 500 manner of calculating it makes it more volatile & hence there are wider swings in the price movement of this stock index. Although this stock index generally moves upward over the long-term because US economy also shows strong and robust growth & is also the biggest economy in the globe.

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

As a indices trader you want to be biased & keep on buying as the index moves & heads upwards. When US economy is performing well (majority of the times it is doing well) this upward trend is much more likely to be in place. A good stock index trade strategy would be to buy dips.

During Economic Slow-Down and Recession

During economic slow down & recession periods, firms start reporting slower earnings and revenues, slower profits and lowers growth prospect. It is because of this reason that traders start & begin to sell stocks & shares of corporations that are posting lower profits and hence index tracking these particular stocks will also start to move downwards.

Hence, during these times, market trends are likely to be moving and heading downwards and as a trader you should also adjust your trading strategy accordingly to fit the current downwards trends of the stock market index which you're trading.

Contracts and Details

Margin Requirement for 1 Lot/Contract - $ 12 dollars

Value per 1 Pip(Point) - $0.1 dollars

NB: Even though general trend is in general moves upwards, as a stock indices trader you've got to factor in daily market volatility, on some days the index may move in a range or even pull-back, market pullback/retracement may also be significant some times and hence as a trader you need to time your entry precisely using this strategy: Index trade strategy & at the same time use proper/appropriate money management methods & guidelines just in case of unexpected volatility in the market trend. About equity management strategies and guidelines in stock index lessons: What's equity management & equity management methods/strategies.

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