How to Know the Quantity of Dow Trade Every Day

Trade strength and fade weakness

There are many uses of the term "Dow" that trade both on the stock and futures exchange. There is Dow Chemical, the important Dow Jones Industrial Average (DJIA) and the three composite averages that comprise the DJIA. In addition, there are several mutual funds and tracking indexes.

Instructions

1. Type "Dow" on any quote provider and you will get Dow Chemical Company. Dow Chemical trades on 13 world exchanges, and volume figures are available up to the moment and at end of day for each exchange. See Resources below to find all stock quotes for Dow. Track Dow volume instantaneously or after the exchange closes by typing in the Dow quote with the pertinent exchange.

2. Use the Dow Jones Industrial Average as an unweighted measure of the movement of the 30 largest capitalized companies traded on the New York Stock Exchange. The DJIA is used worldwide as a measure of stock market health. The exchange-traded fund (ETF) DIA is an index that simulates the movement of the Dow stocks and is traded with volume figures on the New York Stock Exchange. It is one of the most widely traded of all ETFs. Volume is always reported on an instantaneous basis.

3. Know that the Dow Jones Industrial Average is one of three component parts: the Dow Transport, the Dow Industrial and the Dow Composite average. Each average represents the important companies that best represent the sector. Much technical analysis, including the popular "Dow theory," is derived from the relative strength of each of the sectors, particularly the Transport and Industrial averages. Volume for each average is found with the appropriate quote. Increased volume gives rise to increased strength.

4. Trade DOW futures on the various futures exchanges. Dow futures are often used as a hedging vehicle. An investor believes a stock will outperform the market. The investor buys the expected outperforming stock and shorts the market average or Dow future. Use daily volume and reports of longs and shorts of futures contracts to measure market sentiment.

5. Buy the DIA, DOW or the Dow futures to eliminate credit risk and invest in the market. Track volume using end-of-day quotes. If prices rise with increased volume, the stock is probably in a trend. Monitor daily volume on your computer through any online brokerage firm.

Tips & Warnings

• Volume is an important part of technical trading. Use volume coincident with market moves up or down for confirmation of market moves.

Resources

• Yahoo Finance: All Dow Jones indices
• Yahoo Finance: Dow futures contracts
• Yahoo Finance: Dow ETFs
• Yahoo Finance: Dow mutual funds
• Yahoo Finance: Dow on major exchanges