What's SP 500 Strategy? - Guide to Trading SP 500 Index

The SP 500 Trade Chart

SP 500 chart is illustrated and displayed and portrayed above. On example above this instrument is named as US500CASH. As a trader you want to find a broker that provides SP 500 chart so that you as a trader can begin to trade it. The stock index example illustrated above is that one of SP 500 on MT4 Forex & Software.

Strategy to Trading SP 500 Stock Index

SP 500 manner of calculating makes it more volatile and hence there are wider swings in price movement of this index. Although this index generally moves upwards over the longterm because USA 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 and keep buying as the index moves upwards. When USA economy is performing well (most times it's performing good) this upwards trend is more likely to be in place. A good stock index trade strategy would be to buy dips.

During Economic Slow-Down & Recession

During economic slow-down and recession times, corporations start to report lower profits and lower business growth prospects. It's due to this reason that traders start to sell stocks of corporations that arereporting lower profits and hence index tracking these particular stocks will also start to move downward.

Hence, during these times stock index trends are likely to be moving downwards & as a trader you should also adjust your trading strategy accordingly to fit the prevailing downwards trends of the stock market index that you are trading.

Contracts & Details

Margin Requirement Per 1 Lot - $ 12

Value per 1 Pip - $0.1

NB: Even though general trend is generally moves upwards, as a stock indices trader you have to factor in daily market volatility, on some days the index might move in a range or even pullback, market pullbackretracement may also be significant at times and hence as a trader you need to mark-time your entry precisely using this trading strategy: Indices trade strategy and at the same time use proper money management guidelines just in case of more unexpected volatility in the market trend. About money management guidelines in index topics: What's index equity management and equity management methods.

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