The Recent Rise in Dow Jones Futures Trading

There are lots of reasons why those interested in financial trading or speculation can decide to trade Index Futures instead of other markets, like the over hyped Forex.

One of the primary factors is that the Dow futures are less vulnerable to exploitation due to being an index following device. The Dow futures contract follows the main (DJIA) Dow Jones Industrial Average quite carefully and therefore the reason it's named after it.

The Dow Jones Industrial Average (DJIA) consists of 30 companies, which are pretty much the biggest organizations in the U.S. such as Microsoft, General Electric and Bank of America. The daily swings in the price of the DJIA is a simple average of these 30 shares and is mirrored in the futures exchange.

The Dow Emini trades on the Chicago Board of Trade (CBOT), also referred to as Chicago Mercantile Exchange (CME). Each contract traded is worth only $5 a pip which allows the novice to get started trading with low margin requirements around $500.

Because the Dow futures trade on an electronic exchange orders get routed quickly and executed almost instantaneously on a 'first come first served basis', this provides all participants the opportunity to trade on reasonable level ground in the market.

Futures trading also enables traders to place orders within the spread (at the Bid/Ask), this allows the trader to save the spread should their purchase get executed, a wonderful instrument utilized by scalpers. In terms of futures trading, the broker's usually act in their customer's best interest. A Futures brokerage just makes a little commission from costs when orders are effectively routed to the trade and filled or matched with others.

The Dow Jones Futures charts are becoming increasingly popular with both newbie and experienced traders as they offer great opportunity for profit. It enables traders to begin with very small amounts risked and as more experience is gained they can increase risk and exposure to the market.

Index Futures trading is also among the safest vehicles to trade in due to stringent SEC and NFA rules, which brokers are needed to stick by.