Dow Jones Industrial Average or the Dow 30 - Wall Street 30 Index
Dow Jones Industrial Average or the Dow 30 is a stock market index that tracks 30 of the largest stocks in USA. The stocks that are used to calculate this component are picked from 30 largest firms in USA.
Dow Jones is the most popular & most followed index globally. The Dow Jones Industrial Average originally tracked 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 USA corporations.
Dow Jones is more volatile than most of the other Top Indices, The Dow Jones though will over the longterm trend upwards it'll have more price retracements and more consolidations than other stock index. Traders might prefer to trade other indexes other than the Dow Jones Industrial Average if they're more accustomed to trading the more stellar trends which are found in other top indices.
The Dow Jones 30 Trade Chart
Dow Jones 30 chart is illustrated and displayed & displayed above. On example above this instrument is named as US30CASH. As a trader you want to find a broker that provides Dow Jones 30 chart so that you as a trader can begin to trade it. The example Which is illustrated above is that one of Dow Jones 30 on MetaTrader 4 FX Platform Software.
Other Info about Dow Jones 30 Stock Index
Official Index Symbol - DJI
The 30 constituent stocks that make up the Dow Jones 30 are selected from top performing USA corporations. The calculation of this index is however different compared to other Indices; the price constituent of the 30 stocks is sub divided by a common divisor so as to come up with this index. This makes this stock index more volatile than others.
Strategy to Trading Dow Jones 30 Index
Dow Jones 30 approach of calculating make Dow 30 index more volatile and hence there are wider swings in price movement of this index. Although this index generally moves upward over the longterm because USA economy also shows strong growth & is also the largest economy in the world.
As a trader wanting to trade this stock index, be prepared for wider price swing & a little more volatility.
As a trader you want to be biased and keep buying as the index moves upwards. When USA economy is performing well (most times it's performing good) this upward trend is more likely to be in place. A good index trade strategy would be to buy dips.
During Economic Slow-Down and Recession
During economic slow-down and recession times, corporations begin to report lower profits and lower business growth prospects. It's due to this reason that traders begin to sell stocks of corporations that arereporting lower profits and hence index tracking these particular stocks will also begin to move downward.
Hence, during these times trends are likely to be moving downwards and as a trader you should also adjust your strategy accordingly to fit the prevailing downward trends of the stock market index that you're trading.
Contracts & Details
Margin Requirement Per 1 Lot - $ 150
Value per One Pip - $ 0.5
NB: Even though general trend is generally upwards, as a trader you've to factor in daily market volatility, on some days the index might move in a range or even pullback, market pullback might also be significant at times and hence as a trader you need to mark-time your entry precisely using this trading strategy: trade strategy and at the same time use proper equity management guidelines just in case of more unexpected volatility in the market trend. About equity management guidelines in stock index topics: What's index equity management & equity management methods.
