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Technical
Analysis written in a straightforward way so that everyone understands.
There's
only a small few who get it consistantly correct and you are certainly
in
that group.
Chris
Thanks
for putting this all together and sharing! BHW
Awesome
Stuff! Kenny has shown time and time again the ability to show us direction in
these markets. Khalsa
Kenny, I appreciate your insight and analysis. You make sense of what I can rarely see.
Thanks for sharing. Gene
Took a gold short at 1240
just closed at 1203 :-)))))))))))))))))) ........ top call!! Gekko
Stock Market Indexes
Stock
Market Basics
What is a Stock Market Index
Stock
Market Indexesindices,
are a pool
of stocks used as a way of measuring how a
market or sector is performing overall. An index is just a virtual
portfolio.
It is the same as your personal portfolio where some stocks within it
will
have dropped and others will have gained but what really matters is
whether you made money today or not, what is the final number at the
bottom of the page? Did the tradersdaytrading.comindex
go up
or down
today is what I want to know.
Each stock index
has its own formula for calculating its value so the actual
number itself is not that important. It is simply a means of measuring
relative
performance.
Stock Market Indexes
Examples
of the best known Stock market indexes are-
Dow Jones Industrial Average
(djia), often simply called the Dow or Dow Jones Standard and Poors 500 (spx) or
just S&P500, sp500 etc... Ftse
100 (ukx), NIKKEI, ASX, DAX etc...
What stocks go into an Index
Stockmarket indices
can
comprise of
absolutely anything you want to put in to them and measure the
performance of. The Dow Jones Industrial Average (DJIA) contains 30 of
some of
the largest companys in the US spread across a number of sectors from
McDonalds to Microsoft.
The Standard and Poors
S&P 500 is a much wider spread of stocks and
contains ??.......yep you guessed it...500 stocks from across a variety
of sectors. Sectors are just groups of similar companies. Retailers,
Telecoms, Utilities etc.
Sectors, themselves can be measured in an index as a way of
measuring
how well that particular type of business is performing. We all know
only too well that the Banking
sectors took a nosedive through 2008.
Its not just stocks that are measured in market indexes. There are also
indexes for commodities markets through to the Real Estate markets, If
you can trade it, it
will be in an index somewhere. There are even indexes of indexes.
Traders
Trivia
Charles Dow created the oldest indexes
that are still in use today, Dow
Jones Transportation Average
then the Dow Jones Industrial Average.
Q. How many Dow Jones
Indexes are there today?........and NO cheating!
Stock
Indices are used extensively and have a
wide variety of uses. The media love to quote the Dow and the Ftse
changes on the day just to let us know how well off or how
poor we are, as the case may be.
An
investor or investment manager can gauge how a particular sector or
even a geographical area is performing relative to others. This gives
them vital information for when they make decisions about where, and
how much of his portfolio to allocate to it, if any. More about this in
the how to trade
section of this website.
Many
traders trade the stock
indexes themselves rather than the constituents within the
index.
Kennys favourite trades are the Standard and Poors 500 stock
index
(S&P500) and the FTSE100.
These indexes can be traded via ETFs, Futures and
options or in some countries like here in the UK Financial Spread
betting is an excellent alternative.
A Free
10 part stock market beginners trading course. This trading course
offers an introduction to understanding how the financial markets work
and how to trade successfully.
What is spread betting (spread
trading)
and how does it work? Learn about the many advantages of
financial spread betting and find out where you can spread bet.
Learn how Elliott Wave analysis can improve your trading. Find out how
to access a Free 10 part tutorial for learning about the basics of
Elliott Wave analysis.
