Trading the S&P500; with Platinum Trading Academy
Hello Traders,
In today’s blog, I would firstly like to say a big thank you to all the new followers and for such lovely comments on our previous article on Special Report on the UK Election. The month June has been a really great start for Platinum traders with plenty of market Cap trades coming to fruition last week.
In today’s article, we would like to discuss the S&P500.
I am sure many of you have heard about it before, but do you know what the S&P500 is?
The S&P500
The “Standard & Poor’s 500” index (S&P500) is an US market index that gives investors an idea of the overall movement in the United States equity market. The value of the S&P500 constantly changes based on the movement of 500 underlying stocks.
The index of 500 stocks is seen as a leading indicator of U.S. equities and a reflection of the performance of the large-cap world made up of companies selected by economists. The S&P500 is a market value weighted index and one of the common measurements for the U.S. stock market. Other S&P indexes include small-cap companies with market capitalization between $300 million and $2 billion and an index of mid-cap companies. Investment products based on the S&P500 include index funds and exchange-traded funds. Because the companies chosen for the S&P500 tend to be leaders in their industry, most are large companies.
But let’s now be honest, I am sure you don’t want to know the same basic stuff everyone knows about the S&P500. You are reading this because you want to know how to take advantage and trade this index for profits.
Very well! While everyone is trying to guess where the S&P500 is going to turn, because it will at some point, this market continues in its bullish bias. At the right moment, buying the index is somehow quite risky. The problem with this index is that when it moves, you don’t want to stand in its way.
Fundamentals and S&P500
Fundamentally, there are no reasons for this index to be at the highs it is right now. However, as the saying goes, “the market can remain irrational for longer than you can remain solvent.” Therefore, there is no point in looking for reasons for why it is moving higher.
Out of experience, as a perfect trader, you must feel comfortable with your trades. We don’t know about you, but we feel very uncomfortable in buying this market right now. That’s doesn’t mean you cannot do it. It just means we chose to be out of buying this market for the time being.
However, when you are a Platinum Trader, you have that extra tool you can use to trade the markets. That’s when you can take trades in the S&P500 with confidence.
Extreme zone trading
As you can see at that moment everyone was “buy, buy, buy”, as soon as the price of the S&P500 hit our Extreme Zone, It reversed very aggressively.
Here at Platinum Trading Academy, we use an Algorithm which gives us a series of Buy and Sell zones for each trading day. We use this Algorithm or “trading system”, as we like to call it, as an extra confirmation for our entries on the trades we enter the market after all our analysis is done. It is important that you understand we do not take blind entries on each sell or buy zone.
You can use this strategy whenever the price of any market hits the Extreme Zone. Even NFP? Yes! Even NFP. What about FED rate decision? Yes! European Elections? Yes!
We have written a special article on the Extreme Zone Strategy and this week, that strategy has given us 2 excellent trades. Watch here the other Extreme Zone which triggered this week on Cable with the release of the UK Elections results.
THE PLATINUM WAY
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinums Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Download a free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.
Hopefully you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Nisha Patel
Live from the Platinum Trading Floor.