What are Market Indexes?

The Market Indexes is a way to invest in a group of stocks, much like a mutual fund, but with more control. Index tracking is very important to look at when you are going enter a position. If you are entering a bullish position you want to preferably have a bullish stance on the overall market. Remember the trend is your friend.

The primary index tracking stocks are the QQQQ ( Nasdaq 100, aka "Q"), SPY ( S&P 500 aka Spider) and DIA (Dow Jones Industrial Average, aka Diamonds). These stocks are also known as the ETFs (Exchange Traded Funds).

You have the same risk in trading Indices as you have with purchasing stocks except with more diversification.

Another key index is the Volatility Index , VIX, VXN, VXO and VXD. The Volatility Index measures the implied volatility in broad markets. When the volatility has risen than the fear or uncertainty will rise. The same falls true when the volatility is low, the implied fear is low. It is wise to check this index when you are uncertain of the market stance.

Knowing this key information in your stock strategy planning will help you in your trading future. Remember to always follow your rules and happy trading!

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