In your quest to learn all essential ingredients . . . Then Dow is one of the most important basics. To understand the Dow you must know the distinction between the cash and the future. The cash is an index of the 30 largest stocks by market capitalization of equity companies incorporated in the United States. Per Wikipedia: The Dow Jones Industrial Average / /, also called the Industrial Average, the Dow Jones, the Dow Jones Industrial, the Dow 30, or simply the Dow, is a stock market index, and one of several indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow. The industrial average was first calculated on May 26, 1896.[1] Currently owned by S&P Dow Jones Indices, which is majority owned by McGraw-Hill Financial, it is the most notable of the Dow Averages, of which the first (non-industrial) was first published on February 16, 1885. The averages are named after Dow and one of his business associates, statistician Edward Jones. It is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market.[3] It is the second oldest U.S. market index after the Dow Jones Transportation Average, which was also created by Dow.
There are more than one Dow index: industrials, transportation and utilities. Watch them all as they benchmark the market but they are not all you need to know. In addition there is the S&P 500, NASDAQ 100, Russell 2000 and many, many more. There's a myriad of indices, which are not tradable plus a great number of futures that are tradable. Learn to distinguish the difference.
Maintain these two important ideas: While the United States financial markets are remarkably large and influential to the world's financial markets, the sun does not only rise and set in North America. Europe & Asia also host large and influential markets. For example, the German DAX or FDAX, is important to understand and even follow for early day trading direction. Sometimes the Asian markets stimulate direction earlier in the day. World trading action occurs wherever the sun is shining.
Suffice it to say that a trader must know the financial markets transcend the U.S. and operate 24 hours a day.... today, the NYSE starting and closing "bell" no longer means the market it closed until tomorrow. Important instruments representing the world's stocks and commodities trade 24 hours a day and generally close for approximately only 45 minutes... and that time of day is generally mid afternoon to early evening, depending on where you live in the U.S. Since I live in the U.S. Pacific Time Zone, the markets close at 2:15 PM [1415] and reopen at 3:00 PM [1500]. You may wish to convert that to GMT or Zulu time, depending on your personal orientation.
Click to view all 30 components of the American Dow
Again, anytime we write about a term you do notfully appreciate, we suggest you refer to one of all of these sources:
www.Wikipedia.com; www.Investipedia.com; www.Dictionary.com
