Trading dow jones strategy




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Trading dow jones strategyTrading on the Dow Jones

You undoubtedly know that Forex brokers generally enable you to trade on the major French, European and International markets. Among these indices there are some that are more popular than others due to the quantity of information that can be found concerning them. This is the case for the large American indices such as the Dow Jones that we will present here. With these explanations and detailed historical information concerning the composition and values of this premier class industrial index you will rapidly be in a position to complete profitable transactions on the American market, on the rise and on the fall. Here you will find all you need to know about the Dow Jones Index.

Presentation and Characteristics of the Dow Jones:

The Dow Jones is an American Stock Index, known by all market traders due to its particular status which is representative of the American Markets. The original name of this index was the Dow Jones Industrial Average, or DJIA, which was shortened to the ‘Dow Jones for reasons of simplicity. On the trading platforms you will find it under the name ‘DJ30.

This American stock Index is the oldest index of the New York Stock Exchange as well as the oldest index in the World. It is held by the company Dow Jones Indexes which in turn is held by the CME Group, 10% of which is held by Dow Jones and Company.

The creation of this index can be claimed by a pioneer in technical analyses ; Charles Henry Dow, who is also responsible for the celebrated Dow Theory.

Companies quoted by the Dow Jones:

As indicated by the abbreviation DJ30 which can be seen on the trading platforms and various communications, the Dow Jones reflects and comprises the activities of the 30 largest and most representative of the industrial sector of the United States. Here can be found prestigious companies such as Coca Cola. Intel and Walt Disney.

It is interesting to note that the calculation of this index differs somewhat from other international indices. In fact, like the NIKKEI, it is one of the few indices that are calculated according to the value of the shares that it comprises rather than the share capital of the concerned companies. This particularity is actually considered to be a fault in this American Index which has kept to the same quotation system since its inception over 120 years ago.

It is for this reason that the Dow Jones is no longer considered as the index of reference relative to the American market. This honour is now held by the S P 500.

The History of the Dow Jones prices:

Since its creation in 1884, the Dow Jones Index has of course experienced highs and lows and it would be well nigh impossible here to resume its major trends in just a few lines. However it should be noted that following a number of years where it rose successively this index lost over 50% of its value in the crash of 1929.

Its highest historical record was at a level of 14,000 points which was attained in July 2007 before the global financial crisis created a downturn in its value.

Trading on the Dow Jones with CFDs:

To successfully trade on the Dow Jones you simply need to follow the economical events in the United States. Here are the points to watch:

The commercial balance of the United States.

The general economic policy of the country.

The American GDP.

The statistics concerning the industrial production.

The export levels.

The value of the American Dollar.