Trading the Dow Jones

That is hardly surprising on a forum designed for beginner forex traders.
I am sure there are other index traders, or at least followers, but even those of us who do would not be overly interested in this thread purely because of the timeframe you are using.

As you have noticed, (and I speak of the SP500) these indices move very fast and very far. So in many cases, if one comments here based on a minute TF, then the situation is often old, even changed, before one gets back to the charts…and especially if you are only trading the US session.

The US indices offer a lot. You can make a lot of pips in a very short time (and lose them even quicker!). They tend to chart well technically as there is a huge trader base involved.

Stops are, needless to say, essential in this market unless you have deep pockets. As a very crude rule of thumb I equate 1 pip on forex with 10 pips on the SP500. So if a trader normally sets a 30-pip SL in forex, an index trader might be looking nearer to 300 pips for the same type of trading.

For this reason, one of the biggest mistakes to avoid is chasing the market. It can often look like it is on a speed boat and one can get sucked into its wake as it takes off, only to find it pause and reverse a few hundred pips before continuing - or not!

TIming is everything.

On very, very short TF’s (minutes) direction is not such a big issue and there are plenty of opportunities in either direction. But on longer TFs (even 1hr upwards) it is more sensible to only look for long trades while the bigger picture is bullish (which is most of the time). Sell-offs tend to be like stretched elastic bands and when they ping back they really produce a gain worth celebrating! But, here again, timing is the key issue! Buying into a falling market in indices is really risky until one is really confident of the turn.

Just some thoughts.

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Thanks Sovos, much appreciated.

hi, during your time trading the dow did you find or come across anything that the dow tends to follow? for example the sp500, dollar index, eurusd etc.
thanks