Dow Jones is often known as DJIA or the Dow Jones Industrial Average. In the broker’s platform, you might get it tagged with the symbol US30. It comprises of the stocks of the top 30 companies in the USA. Since the big players are involved in the Dow Jones, it is very hard to trade. Taking trades at indices requires huge capital as the market volatility is insanely high. You must find a safe path to deal with this volatile market and only then you can take trades with discipline. Let’s learn some professional steps to trade the Dow Jones like an elite trader.
Study the historic price movement
Studying the historic price movement is a great advantage. As a UK citizen, you might have tons of ways to fund a big amount of money but without knowing the volatility of Dow Jones, it’s just a matter of time you lose the big fund. In the US30 market, you might experience more than 100 pips movement per minute. The average daily pips movement might exceed 1000+ pips. So, comparing it with the Forex market is a big mistake. It is enough to clean your trading capital. By studying the historic price movement, you can get a general idea about the volatility of the market.
Analyze the support and resistance
Since US30 or Dow Jones is volatile, the support and resistance level works at a different level. Instead of trading the pivot point, you have to take trades in the zones. For that, you need a high-end proprietary platform. Feel free to get it here and you won’t repent choosing Saxo as your prime broker. Spending a few weeks in analyzing the support and resistance level will give you a decent idea of how this market works. You will be able to trade the market with accuracy. It will also improve your analytical ability.
Set pending orders
Using the instant order execution to trade the Dow Jones is a very risky task. You will be aggressive with the trade approach as the market reacts violently at the support and resistance level. So, if you take the trades at an important level by using the key concept of trading, you have changed to make some decent profit Set the pending orders at your desired level. But don’t forget to use the SL (stop loss) and take profit. You can lose a big sum of money if you ever use the pending orders without setting up the SL.
Try to trade with the trends
Being an active trader, you must try to trade with the major trends. Taking trades with the trend has a unique advantage. You will be able to stay relaxed and look for more trading opportunities. Most importantly, you have a high chance to win money from a certain trade. Analyzing the trend might seem hard but if you closely analyze the key details of the market, you will know taking the trades is not that tough. Follow the trend using this classic concept and trade with a predetermined stop loss.
Be ready to face a series of losses
Due to the fast-pace of the trading industry, you have to ready to accept frequent losses in Dow Jones trading. Your analysis might be right but due to a shift in the market sentiment, you will lose some trades quite often. This is very common and there is nothing you can do about it. However, if you get used to the concept of the PA bar or the price action bar, you might be able to lower the number of losing trades. But learning about the price action trading method is a very big challenge and requires strong devotion. So, focus on the core concepts of trading and use this article as a guideline to trade the Dow Jones like a professional trader.