What is US 500 Trade Strategy? - Learn Trading US 500 Index

The US 500 Trade Chart

The US 500 trade chart is displayed and illustrated above. On the example above this instrument is named as US500CASH. As a trader you want to find a broker that provides this US 500 trade chart so that you can start to trade it. The stock example above is of US 500 on the MT4 Software.

Indices Trading Strategy for US 500 Index

US 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 stock index generally moves up over longterm because the American economy also shows strong growth & is also the biggest economy in the world.

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

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

During Economic SlowDown and Recession

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

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

Contracts Specifications

Margin Required Per 1 Lot - $ 12

Value per 1 Pips - $ 0.1

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