Day Trading Profit Secret – Why Do We Still Watch the Dow Jones and the S&P 500 Indexes So Closely?
For many a year day traders have followed the Dow Jones as an important guide to the markets. The Dow Jones industrial average is the average price of 30 of the biggest most important stocks in the United States of America. The formula is actually a little more complex than just an average, to allow for stock splits. Names like General Electric, Boeing and Disney are part of this well regarded group. But how does this impact on day traders. The Dow Jones is an Index which is of interest to traders because rather than trade an individual stock which can fluctuate for its own internal reasons; an index tends to smooth out the market action. Many countries claim that their markets are independent of the Dow Jones, but I can tell you that here in Australia when the Dow sneezes, so do we. It doesn’t make sense really as in the Global Financial Crisis. Most Australian companies fared much better than the large American counterparts. It seems almost a convention that our market follows the Do
