Dow Jones

Dow Jones brokers provide investors with a simple way to get a ‘big-picture’ view of US economic performance and speculate on one of the world’s most respected equity indexes – the Dow Jones Industrial Average. This guide will introduce the Dow Jones, the second-oldest equity index and explain how it is composed. It will also list the key information you need to compare Dow Jones brokers and start investing, including information on trading times, strategy tips, charts, graphs, and price history.

How To Compare Dow Jones Brokers

Traders need a reliable and secure broker with fair pricing to execute a winning Dow Jones strategy. Every investor will have their own criteria, however there are several key areas to compare Dow Jones brokers in:

Trading Vehicles

There are multiple ways to trade the Dow Jones Index, so you should choose a broker that provides the most appropriate product for your trading style. Common ways to gain exposure to the Dow Jones include CFDs, ETFs and spread betting, though more exotic alternatives like binary options are also available from some brokers.

• IG is a great choice for traders as it offers Dow Jones spread betting, CFDs and ETFs and supports a range of platforms including MT4
• eToro is a good Dow Jones broker for beginner traders thanks to its user-friendly, browser-based trading platform
• Pocket Option is a popular binary options broker with Dow Jones trading and useful features including a demo account

Check the fees and tools such as available leverage when deciding on your preferred method of trading.

Platforms & Apps

Serious traders will want access to a powerful trading platform with a full range of tools and indicators to help them read Dow Jones charts. Some Dow Jones brokers offer their own proprietary platforms, but many will also support third-party platforms such as MetaTrader 4 (MT4) or MetaTrader 5 (MT5).

While a beginner investor may prefer a broker like eToro with an easy-to-use browser-based platform, those who want a deeper trading experience may prefer a Dow Jones broker such as Pepperstone which supports MT4 or another dedicated trading platform.

Also check that the broker’s platform is available as an Android, iOS or Windows-compatible app if you plan to make trades and manage positions on the go.

Fees

Fees are usually toward the top of a trader’s list when it comes to choosing Dow Jones brokers as they have a direct impact on the profit they can make from trades. The most important fees will usually be commissions charged per trade and the spread.

Note that UK traders can speculate on the Dow Jones using various instruments, including CFDs, ETFs, and spread betting, and the fees can vary according to how you trade. For example, eToro offers both a Dow Jones tracker ETF and CFDs on the index, with a 0% commission on standard ETF trades, a 0.15% commission on ETF CFDs, and a 6-point spread on Dow Jones CFDs. Alternatively, Pepperstone offers even tighter spreads during most of the trading day:

Additional Features

Some of the best Dow Jones brokers offer extra features to help traders improve their skills and get the best out of their trading platforms.

Copy trading and automated trading are among the most useful features for Dow Jones traders as they keep you updated with the latest information about the index’s price movements with signals and allow you to immediately place trades.

A full range of tools and indicators is another important feature to look out for as these help you to analyse the Dow Jones index’s price history and choose the ideal time to execute and close trades. Look out for Dow Jones brokers whose platforms support indicators and tools such as moving averages, Bollinger bands, and daily trading volume charts.

Beginner traders also benefit from educational resources. Some of the best Dow Jones brokers in the UK offer learning resources in the form of blog posts, YouTube videos and even courses. Combined with demo accounts, these can teach you how to formulate a strategy for trading the Dow Jones and allow you to practice and fine-tune it without risking any real cash.

Regulation

The Dow Jones Index tracks US companies, but regulation will depend on the individual broker you use. The regulatory body that oversees a brokerage may affect the type of products on offer and the amount of leverage available to retail clients – for example, the UK’s Financial Conduct Authority (FCA) limits leverage for retail clients (1:20 for indices), ensures negative balance protection is provided, and has various rules around trading bonuses and promotions.

Other major regulators include the US’s FINRA, CFTC and SEC, Australia’s ASIC and Cyprus’s CySEC.

Customer Support

A high-quality, responsive customer support service is the hallmark of a good broker and it can be key if you have any issues with your account. Look for Dow Jones brokers that have live chat and support hotlines as well as detailed FAQ areas on their site. You should also check that the support team is available in your timezone and look for a hotline that serves traders from the United Kingdom.

Pepperstone is an example of an established and reputable Dow Jones broker with comprehensive support, open 24 hours in the week and 18 hours on the weekend.

Security

Traders need to know their funds and personal information are in safe hands, so they should research the protocols and security measures used by each Dow Jones broker on their list.

Look for brokerages that securely store user data with cutting-edge encryption and offer reliable login security systems, such as two-step authentication. In addition, look for DJ30 brokers that use segregated accounts to separate traders’ funds from company capital.

What Is The Dow Jones?

The Dow Jones Industrial Average (DJIA), sometimes known as the US30 or simply the Dow, is a stock market index of 30 leading companies listed on US stock exchanges. Founded in 1885 by Wall Street Journal editor Charles Dow and his business partner, statistician Edward Jones, the index is the second oldest in the United States and is still one of the most widely followed in the world to this day.

As a price-weighted index, the stocks with higher values per share will impact the Dow’s price more than their lower-valued peers.

Today, the Dow Jones is one of several indexes maintained by S&P Dow Jones Indices, a company that is owned by S&P Global and is also known for maintaining the S&P 500 index.

The 30 companies comprising the Dow Jones are chosen by a committee, and over the years the addition of new companies has brought the Dow Jones a little diversity to make a change from its original, wholly industrial flavour.

Dow Jones Criteria Explained

For a company to be considered as a Dow Jones stock, it must be incorporated and headquartered in the US with a plurality of its income coming from that country, be representative of the US economy with an excellent reputation, attract a large amount of investment and demonstrate sustained growth.

The 10 Dow companies with the highest revenues yield are known as “the Dogs of the Dow”.

Dow Jones Companies List

1. 3M Company
2. American Express
3. Apple Inc.
4. Boeing Company
5. Caterpillar Inc.
6. Chevron Corporation
7. Cisco Systems, Inc.
8. The Coca-Cola Company
9. Dow Inc.
10. Exxon Mobil
11. Goldman Sachs Group
12. Home Depot, Inc.
13. IBM
14. Intel Corporation
15. Johnson & Johnson
16. JPMorgan Chase & Co.
17. McDonald’s Corporation
18. Merck & Co., Inc.
19. Microsoft Corporation
20. Nike, Inc.
21. Pfizer
22. The Procter & Gamble Company
23. Travelers Companies, Inc.
24. UnitedHealth Group Inc.
25. Verizon Communications Inc.
26. Visa Inc.
27. Verizon Communications
28. Walgreens Boots Alliance
29. Walmart Inc.
30. The Walt Disney Company

The Dogs Of The Dow

The Dogs of the Dow as of 2023 are:

1. Verizon (VZ)
2. Walgreens Boots Alliance (WBA)
3. 3M (MMM)
4. Intel (INTC)
5. International Business Machines (IBM)
6. Dow (DOW)
7. Pfizer (PFE)
8. Chevron (CVX)
9. Cisco Systems (CSCO)
10. Exxon Mobil (XOM)

Dow Jones Futures

Dow Jones futures contracts are the basic way to speculate on the price movements of the index, and just about anyone can do so through a Dow Jones broker that offers this instrument.

There are currently two Dow futures contracts available: the E-mini or mini-Dow, and the Micro E-mini. The E-Mini’s value corresponds to $5 per tick on the Dow, while the Micro E-mini represents $0.50 per tick.

Trading on Dow Jones futures is available from a wide range of online brokers, including some of the biggest names like Interactive Brokers.

However, many Dow Jones brokers also offer their own instruments that trade off the index’s price but are not directly linked to Dow Jones futures. These are sometimes represented by a different symbol, such as US30.

Trading Hours

Most of the companies on the Dow Jones trade during the opening hours of the New York and NASDAQ exchanges, on weekdays from 9:30 am to 4:00 pm Eastern time (EST)

Dow Jones futures are available Sunday through Friday and can be traded almost around the clock. After-hours and pre-market trading information on the Dow Jones is available on CNN Business.

Retail traders should also check their Dow Jones broker, as many platforms set their own hours for trading specific instruments.

Live Price Chart

Getting Started

Following a few simple steps to get started trading the Dow Jones index:

Create And Fund Your Account

Traders looking to sign up with Dow Jones brokers should compare their options, keeping in mind the criteria listed above. Registering with a trading broker for the first time usually involves providing documents for identity verification and know-your-customer checks, and it may also involve proof of address.

When the time comes to fund your Dow Jones brokerage account, pay attention to the minimum and maximum deposit limits as well as the supported payment methods. New traders will probably want to stick to smaller trades while they gain experience with the Dow Jones index, so a low minimum deposit is often desirable. The payment method can also make a big difference – you should use the method that has the lowest fees and the fastest transaction times, such as PayPal.

Do Your Research

The Dow Jones is made up of 30 of the leading companies in the world’s biggest economy. This will have a deep impact on how you analyse, plan and execute your trades for several reasons.

Firstly, as one of the world’s most widely followed and influential indexes, there will be no shortage of material online to help you research the Dow Jones. A little reading goes a long way, and you can quickly learn about the factors that have led to price movements on the Dow Jones’s historical price chart.

Moreover, the makeup of the Dow Jones in itself will help you to understand something of the price’s movement. These are all blue-chip stocks with global reach, and you can count on the Dow Jones to do well during market rallies. Look out for US numbers reports, including things like inflation, interest rate hikes, unemployment announcements etc to help inform your predictions about the Dow’s direction.

Also, note that this is a far smaller index than the S&P 500 and similar. This means that while the S&P 500 will give a broader view of the US economy as a whole, the Dow Jones reflects only the performance of 30 companies – significant as these may be – the majority of which are involved in industry or the manufacture of consumer goods.

Choose A Trading Instrument

Your choice of trading vehicle will have a big impact on your Dow Jones trading experience, affecting your profit potential, the length of contracts available, and more. Longer-term investors may wish to put their money in a Dow Jones EFT, while day traders often prefer derivatives with margin trading such as CFDs. Binary options can be a good option for newer traders or for those who wish to make a lot of short-term trades in one day.

Some Dow Jones brokers such as IG offer traders a variety of ways to trade the index, including EFTs, CFDs and spread betting. However, some of the top Dow Jones binary options brokers such as Pocket Option limit their offerings to only this product.

Choose A Strategy

Your strategy when trading the Dow Jones will depend a lot on the timeframe of your trade and the way the market is performing.

Since the Dow Jones tracks some of the US economy’s biggest companies, in the long-run, the value is often bound to go up – this means it can be a relatively low-risk addition to a trading portfolio for investors who are playing the long game. However, bear in mind that the index’s value will often go down with a big market crash and may take years to recover.

Dow Jones Historical Price Chart

For shorter-term trades, look out for factors that affect the US economy as a whole and particularly the companies that make up the Dow. Remember that the companies on the index with the highest share price will also have the greatest influence on the Dow’s price – this means that it should be your priority to keep an eye on those companies.

Execute A Trade

Once you have signed up to a good Dow Jones broker and researched the market, it’s time to place a trade. Chart analysis of the Dow’s recent performance on TradingView or a powerful trading platform will give you a good idea about price movements and help you identify levels of support and resistance. Also check graphs showing the trading volume and level of volatility for the Dow Jones before opening your position.

When you are satisfied with the market conditions and want to place your trade, navigate to the relevant section on your broker’s app or trading platform to set it up. You will need to input the size of your position, whether you are going long or short, and the amount of leverage you wish to use.

If possible, you may wish to open the trade by placing an order at a specific price. It is also a good idea to set stop loss and take profit levels, as this will curtail the risk of a bad trade leading to big losses and ensure you lock in profits from a good trade.

Bottom Line On Dow Jones Brokers

The Dow is a trading institution and one of the most trusted ways to understand the economic performance in the US. It can also be an exciting and profitable index to trade in the short-term using derivatives, and many investors also put their money in Dow Jones ETFs to reap longer-term profits.

Remember that finding a good and reliable Dow Jones broker will be a key part of your success and keep up to date with all the relevant news on the US economy and Dow Jones companies to stay ahead of the game.

To start trading, see our list of the best Dow Jones brokers and platforms for UK investors.

FAQ