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What is US 500 Index Trading Strategy? - How Can I Trade US 500 Index - Learn Trading US 500 Index


US 500 Index – Standard and Poor’s 500 Stock Index



The US 500 Index Chart

The US 500 Index chart is shown above. On the example above this instrument is named as US500CASH. As a trader you want to find a broker that provides this The US 500 Index chart so that you can start to trade it. The stock example above is of US 500 Index on the MetaTrader 4 Forex and Index Trading Platform.



Indices Trading Strategy for US 500 Stock Index

The US 500 Index method of calculation makes it more volatile hence there are more wide swings in the price movements of this stock index. Although this index generally moves up over the long term because the American economy also shows strong growth and is also the biggest economy in the world.


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


As a Stock indices trader you want to be biased and keep buying as the index moves up. When the USA economy is doing well (most of the times it is doing well) this upward trend is more likely to be ruling. A good stock index trading strategy would be to buy the dips.



During Economic Slow Down and Recession

During economic slowdown and recession times, companies start to report lower profits and lower business growth prospects. It is due to this reason that investors start to sell stocks of companies reporting lower profits and therefore the stock index tracking these particular stocks will also start to move downwards.


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



Contracts Specifications

Margin Required Per 1 Lot - $ 12

Value per 1 Pip - $ 0.1


Note: Even though the general trend is generally upwards, as a trader you have to factor in the daily market volatility, on some days the stock index may oscillate or even retrace, the stock index market retracement may also be significant at times and therefore as a trader you need to time your entry precisely using this strategy: Stock indices trading strategy and 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 indices trading topics: What is stock index trading money management and stock indices trading money management methods.

 

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