What is S & P 500 Trade Strategy? - Tutorial to Trade S & P 500 Index
The S & P 500 Trade Chart
S&P 500 trading chart is displayed and illustrated above. On the illustration displayed above this trading instrument is named as US500CASH. As a trader you want to find a broker that provides this S&P 500 trading chart so that you can begin to trade it. The example That is displayed above is that of S&P 500 on the MetaTrader 4 Forex Platform.
Strategy to Trading the S & P 500 Index
S&P 500 method of calculation makes it more volatile and hence there are more wide swings in the price movements of this stock index. Although this index in general moves upwards over long-term because the 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 and a little more volatility.
As a trader you want to be biased and keep buying as the index moves up. When the America economy is doing well (most of the times it is doing well) this upward trend is more than likely to be ruling. A good stock index trade strategy would be to buy and keep buying the dips.
During Economic SlowDown and Recession
During economic slowdown & recession times, companies begin to report lower profits & lower growth prospect. It is because of this reason which investors begin to sell stocks of firms reporting lower profits & therefore the stock index monitoring & keeping track of these specific stocks also will begin heading & moving downwards.
Therefore, during these times indices trends are likely to be heading downwards and as a trader you should also adjust your trading strategy accordingly to suit the prevailing downwards trends of the stock market index that you as a trader are trading.
Contracts and Specs
Margin Required Per 1 Lot - $ 12 dollars
Value per 1 Pip(Point) - $ 0.1
NB: Even though the general and overall trend is in general moves upwards, as a trader you've got to factor in the daily market price volatility, on some days the index might move in a range or even retrace, market retracement might also be significant some times and therefore as a trader you need to time your entry strictly using this strategy: Stock indices strategy & at same time use proper money management rules just in case of more unexpected volatility in the market trend. About equity management guidelines in stock index tutorials: What's stock index equity money management & stock index equity money management methods.
Learn More Courses and Topics:
- How to Add IT 40 on MetaTrader 5 Android Trade App
- What's Margin in Index Trade?
- Index Account Opening Cent Indices Trade Account
- How Can You Open a Real Index Trade Account?
- How is NASDAQ 100 Index Traded on the MetaTrader 4 Platform?
