Dow futures are futures contracts that are based on the Dow Jones Industrial Average (DJIA). DJIA is the index of 30 blue chip stocks that are traded on the New York Stock Exchange. Dow index is one of the most famous stock index in the world and everyday if you watch financial news like that on CNBC, you will hear constantly about the performance of the Dow Index that day . Know a shocking DOW Futures secret discovered by Karl Dittmann that is repeated daily at the same time that can make you rich. Trade S&P futures! Discover Forex Mastery 2.0 and watch these shocking M3 Forex Software videos that show how it predicted the DOW crumble days before it actually happened.
Now futures trading is somewhat different than the stock trading. In stock trading, you buy and hold the stocks for a certain period of time in order to realize capital gain. But in futures trading, the futures contract is daily marked to the market. Futures trading is done only for speculation or hedging purposes. Hedgers want to hedge their risk by taking positions in futures contracts while the speculators are looking for making quick capital gains. In futures trading, you can use leverage upto 1:10 as compared to 1:2 in stock trading. This makes futures trading risky as compared to stock trading. But many day traders love to trade stock index futures like the DOW futures everyday. The value of the DOW futures contract is ten times the dollar value of the DOW index at any point of time .
Let’s make this clear with an example. Suppose the DOW is at 11,000 points. The value of the DOW futures contract will be $10 multiplied with 11,000 or $110,000. Since the index value is being multiplied with ten, a DOW Futures contract has an inbuild leverage of ten. What this means is that for every point rise or fall in the DOW, you can profit or loss $10 .
Now, in futures trading there is no uptick rule that can prevent you from going short. so unlike stock trading,you can go short on a futures contract anytime without any market rule stopping you from doing that. What this means is that you can profit by going long or short on DOW futures. If the DOW index is going up, you can go long and profit and if it is going down, you can go short and still profit from the fall in the DOW index .
Now, futures trading is risky and if you are a buy and hold type of investor than you should stay away from futures trading. However, if you have an appetite for risk and can monitor the market constantly than you can profit handsomely from futures. Other futures contracts that are popular with traders are the S&P futures contract and crude oil futures contracts. If you are into futures trading than you need to meet High Velocity Market Master, Mark Soberman. He has unique trading methods. He says that he only trades for 20 minutes each day .
