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

Standard & Poor's 500 is a index which tracks capitalization of the 500 stocks which represent major industries in US economy. The listing of 500 firms is made up of stocks displayed and shown in 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 long-term trend upward but it will have more price pullbacks & more consolidations than other stock index. Traders 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 stocks/shares than other index. This stock index also has got a weighting factor in its calculation which also contributes to making it more volatile.

S & P 500 Index Lesson Guide - Strategy for Standard & Poor's 500 Index

The S and P 500 Chart

S&P 500 trading chart is displayed & illustrated and shown above. On the example shown above this trading instrument is known as as US500CASH. As a trader you want to look for & find a broker that provides S&P 500 trading chart so that you as a trader can start to trade it. The example That's displayed above is that of S&P 500 on MT4 FX Trade Platform.

Other Information about S & P 500 Index

Official Stock Index Symbol - SPX:IND

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

Strategy for Trading/Transacting S & P 500 Index

S&P 500 technique/formula of calculating it makes it more volatile and hence there are more wide swings in price movement of this index. Although this stock index in general moves upward over the long term because USA economy also shows strong and robust growth and is also the largest economy in the globe.

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

As a indexes trader you want to be biased and keep on buying as the index moves and heads upward. When America economic & business environment is doing well and good (majority of the times it is doing well) this upwards market trend is much more likely to be the one present. A good stock index trade strategy would be to keep buying and buy the market dips.

During Economic Slow-Down & Recession

During economic slow down recession periods, companies start reporting slower earnings and revenues, slower profits & lower business growth forecast. It is because of this reason that traders start & begin to sell stocks/shares of companies that are reporting and recording lower profits and hence stock index tracking these particular stocks will also start to move downwards.

Therefore, during these times stock index trends are more likely to be moving downward & as a trader you should also adjust your strategy accordingly to fit the current downwards trends of the stock market index which you are trading.

Contracts and Specs

Margin Requirement for 1 Lot/Contract - $ 12

Value per 1 Pip(Point) - $ 0.1

NB: Even though general trend is in general moves upward, as a stock index trader you've got to factor in daily market volatility, on some of the trading days this stock index might oscillate & move in a range bound move or even retrace/pullback, market retracement might also be significant some times & hence you as the trader you need to time your entry precisely when using this trade strategy: trading strategy & at the same time use the appropriate & proper/appropriate money management methods & guidelines in case there is more unexpected market volatility. About equity management strategies and guidelines in index topics: What's index money management guidelines & methods & money management system/plan.

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