How to Trade the Dow Jones Index :
The Dow Jones Industrial Average is a price weighted average of 30 well known stocks. The average is commonly used as a gauge for the health of the economy. While there are several other types of indexes, the Dow Jones Industrial Average, or simply the "Dow", is the most popular. The best way to trade the Dow Jones Index is through an Exchange-Traded Fund (ETF).
Instructions :
Step 1
Review the definition of an ETF. An ETF is an exchange traded fund that is used to track assets or indexes, including the Dow. ETFs trade exactly like stocks.
Step 2
Look up ETFs that track the Dow. The Dow Jones maintains a site with information about ETFs that track the Dow (See Resources). Choose the one which best suits your interests. The website also has information on each ETF, including its components, historical index values, a fact sheet and methodology for computation.
Step 3
Take down the ticker symbol in which the ETF is traded under. This is found in the right most column under the word Symbol. It is usually a three- to five-letter word.
Step 4
Decide how much you would like to invest. To estimate the number of shares you can afford to invest, divide the amount you can invest by the current market price of a share.
Step 5
Contact your broker and place an order. You will need the ticker symbol, the number of shares you wish to purchase and the price you wish to purchase the shares.
