Index Fund Trading Using Technical Stock Market Analysis - What Every Trader Should Know - by Rockford Tapscott

Index Fund Trading Using Technical Stock Market Analysis - What Every Trader Should Know - by Rockford Tapscott: "Index Fund trading using technical stock market analysis can be one of the most profitable...or most costly exercises you will ever undertake.

While trading a basket of stocks has it's advantages, such as removing the risk of any single company you own going bust and taking all of your money with it, stock indexes (on which index funds are based) can tend to be highly volatile, especially the smaller ones.

The S&P 500 is probably one of the worlds best know stock indexes, and it has a long history of strong trends that have made and lost traders fortunes over the years. By trading a managed fund that tracks the index, options over the index, futures contracts over the index or Contracts For Difference (CFD's), we can participate in the movements of the market.

The easiest way to do this (and the system that many mom and dad investors use) is to simply buy a managed fund like the Vanguard 500 Index Fund. This works fine when the trend is up, but what about when the trend is heading in the other direction? There are several mutual funds that trade inversely to their respective index. One of these can be used to trade the downside when prices are falling, as they do from time to time, sometime"