Dow Futures Secret That Can Make Incredible Profits

Are you a day trader? Have you ever day traded futures contracts like Dow Futures or the S&P Futures

? If not, have you ever thought about trading Dow Futures? Dow Futures are futures contracts based on the world famous Dow Index. Dow Index is the short name for the Dow Jone Industrial Average (DJIA) Index that is a price weighted index of 30 blue chip stocks listed on the New York Stock Exchange. Every day, you will hear analysts talking about the Dow Index going up or down on financial channels like CNBC or Bloomberg. Dow Index is widely taken as the barometer of NYSE market sentiment.

Interestingly, every stock exchange in the world has got a stock index associated with it now. Think about the London Stock Exchange and FTSE 100 index will come to your mind. Talk about Frankfurt stock exchange and DAX index will prop up in the discussion. All these stock indexes have now a stock index futures contract based on them. Trading DAX futures is also highly popular with day traders. But Dow futures, S&P futures and the NASDAQ futures are the most popular among the day traders. Trading stock index futures is like trading against the whole market. You are not trading one or two stocks, you are infact trading all those stocks listed in the stock index. This gives you a good chance from profiting from the market volatility.

There is another adavantage to trading stock index futures or for that matter any other futures contract. The uptick rule does not apply in the futures market. So a trader can as easily go short as he or she can go long without worrying about the uptick that is a headache for the stock traders.

Now, Dow Futures are traded on Chicago Board of Trade (CBOT). Each point on the Dow Index is multiplied by $10 to find the market price of the Dow Futures contract. So if the Dow Index is at 9000 points, the market value of the Dow Futures contract will be $90,000. Many retail traders are unable to afford this much amount to purchase a single contract.

Keeping this in view, CBOT created another Dow Futures contract known as the Dow E-Mini Futures contract. The market value of Dow E-Mini contract is calculated by mutliplying the Dow Index with $5. So in the above case where the Dow Index was at 9000 points, the value of Dow E-Mini futures contract would be $45,000 making it more affordable to small traders.

Most of the futures contracts including Dow Futures now get traded electronically on GLOBEX platform. Now, there are futures contracts on other stock indexes like S&P Futures, NASDAQ Futures that also have their E-Mini versions. Many day traders trade one or more of these contracts. It is always better to specialize in trading only one type of contract. So you can specialize in Dow Futures or S&P Futures whatever better suits you. But once,you know this amazing secret about Dow Futures never lose trade system, you are definately going to trade Dow Futures. This secret is based on something fantastic that happens after every few years to the Dow Index and is repeated for years. The best way to trade Dow Index is to trade Dow Futures. If you know this hidden secret and the exact Dow Futures Trading algorithm, you can make incredible profits!

by: Ahmad Hassam

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