Dow Jones Industrial Average or the Dow 30 - Wall Street 30 Stock Index
Dow Jones Industrial Average or the Dow 30 is a stock market index that tracks 30 of the biggest stocks in USA. The stocks that are used to calculate this component are selected from 30 biggest companies in USA.
The Dow Jones is the most popular and most followed index globally. The Dow Jones Industrial Average originally tracked performance of Industrial stocks but has changed to include stocks from =the other sectors of the economy. The main criteria being the stocks chosen are from the largest American companies.
The Dow Jones is more volatile than most of the other Top Indices, The Dow Jones although will over the long-term trend upward it will have more price pullbacks & more consolidations than other stock index. Traders may prefer to trade other indexes other than the Dow Jones Industrial Average if they are more accustomed to trading the more stellar trends found in other top indices.
The Dow Jones 30 Stock Index Trade Chart
The Dow Jones 30 Stock Index trade chart is displayed & illustrated and shown above. On the example above this instrument is named as US30CASH. As a trader you want to find a broker that provides Dow Jones 30 Stock Index trade chart so that you can begin to trade it. The index example above is of Dow Jones 30 Stock Index on MT4 Forex & Indices Trading Platform.
Other Information about Dow Jones 30 Stock Index
Official Symbol - DJI
The 30 components stocks that make up the Dow Jones 30 Stock Index are selected from the top American companies. The calculation of this index is however different compared to other Indices; the price component of the 30 stocks is divided by a common divisor to come up with this index. This makes this stock index more volatile than others.
Strategy for Trading Dow Jones 30 Stock Index
Dow Jones 30 Stock Index method of calculating make Dow 30 index more volatile & therefore there are more wide swings in price movement of this index. Although this index in general moves upward over the long-term because American economy also shows strong growth and is also the largest 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 & keep buying as the index moves upward. When America economy is doing well (most times it is doing well) this upwards trend is more likely to be ruling. A good stock index trade strategy would be to buy dips.
During Economic Slow-Down & Recession
During economic slow-down & recession times, companies begin to report lower profits & lower business growth prospects. It is because to this reason that investors begin to sell stocks of companies reporting lower profits & therefore index tracking these particular stocks will also start to move downward.
Therefore, during these times index trends are likely to be moving downwards & as a trader you should also adjust your trading strategy accordingly to fit the prevailing downward trends of the stock market index that you're trading.
Contracts and Specifications
Margin Requirement Per 1 Lot - $ 150
Value per 1 Pips - $ 0.5
NB: Even though general trend is generally upward, as a trader you've to factor in daily market volatility, on some days the index might oscillate or even retrace, index market retracement may also be significant at times & therefore as a trader you need to time your entry precisely using this trade strategy: Indices trade strategy & at the same time use proper money management rules just in case of more unexpected volatility in the market trend. About money management rules in stock index trading topics: What is index money management and index money management methods.
