|
Statistics
Total online: 1 Guests: 1 Users: 0
|
Trade
Dow Jones and its correlation with the Forex market
Dow Jones – the world's most famous stock index. But what's his connection, we are interested in the Forex market? Does it make sense to spend the increased time and effort if Your interest is limited to only currency exchange transactions.
It is in this point - stock market dynamics has on the currency market a direct and a significant impact. After all, the Dow Jones, and others like it show the picture of the state of the world's largest economies. Suppose that the U.S. economy is strong growth, respectively, investors, local and foreign, willing to buy shares of U.S. companies that, in addition to the direct growth of prices for these shares, and will cause the growth rate of the national currency, the US dollar, because us stocks are bought in dollars.
Of course, in the Forex market lack of personal "motivators" price movements, which we have already talked a lot, but if you formed a temporary information gap, the exchange rates start to move in unison with the stock market indices. As a rule, if increasing national growth and national currency exchange rates. This is a compelling and obvious reason for the increased attention currency traders indexes in the stock market.
In this article we will look at only one, the world's first stock index, which got its name from its Creator. The index was proposed by Charles Henry Dow, one of the founders of the Wall Street Journal, financial publications, whose authority is unshakable in the financial world and still. Dou for a long time studied the laws and practices of the stock market, or in other words, the stock market.We can say that research Henry Dow laid the Foundation for the development of "technical analysis" discipline, which is actively used to analyze price charts and Forex market.
DOE has set a goal to invent a universal "barometer" to determine the weather in the stock market. As a result, they have created a comprehensive index that provides information about the market in quantitative expression. Completed task solved the problem of correctly assessing the state of the market as a whole: it is clear that at any given moment the stock price of some companies is growing, the other falls, the third – no change.
The technique, invented by the Dow, was simple, like all brilliant – he proposed to consider the average closing price of the stock from 11 companies. Index "saw the world" July 3, 1884. Change of average stock prices from multiple companies allows you to track the overall trend in the market.
In fact, the first version of the index has suffered many childhood illnesses. It was considered the price of the stock only eleven companies. In addition, almost all these companies were connected with the rail, which made the nature of the index rather one-sided, he is even called "railway index". Nevertheless, thus was laid the "cornerstone" quantitative measurement of the overall dynamics of the market.
Later, in 1896, Henry Dow, who well understood the shortcomings of his brainchild, created a new index – the industrial. This index was calculated on the basis of the shares of twelve companies of the industrial sector and received the acronym DJIA (Dow Jones Industrial Average). (Here Jones is the name of another man, the companion and the companion DOE publishing, Edward Jones).
In the future, the method of calculation has been improved - taking into account the number of companies increased to 30, and, thus, the index became more precise. Has altered the calculation formula, this change allowed us to discard the influence of such processes as, say, "crushing" shares (when a company reduces the par value of its shares while increasing their number). This advanced index, and is still being used.
Index family the Dow Jones
Apart from the DJIA, for the update and the publication of which is consistent with the new York stock exchange, was introduced sectoral indices, for example, transport Dow Jones (the heir of the above-described "train index") is calculated based on stock prices of 20 companies in the transport sector - rail, road and airlines.
One of them, the utility Dow Jones takes into account the movement of stock prices of 15 companies working in the field of electricity and gas utilities in the USA.
There is also a composite and Dow Jones, which is calculated on the stock prices of the companies already included in the other three indexes. But still the most popular of these is the DJIA.
It is clear that these indices reflect the real picture of the state of the U.S. economy, which has a direct impact on the U.S. dollar, and because they are in the "zone of interests" of foreign exchange traders.
|
| Category: Forex | Added by: (30.10.2017)
|
| Views: 257
| Rating: 0.0/0 |
|
