Ever thought of trading the Russell 2000? Here’s how retail traders could benefit from trading this index.
New traders are drawn to the emini Standard & Poor’s 500 like bees to honey. Go into any live trading room and chances are that the moderators are teaching traders to trade the emini S&P 500 because it has more liquidity than any other market.
In Figure 1 the average annual volume is compared between the following emini indexes: emini S&P 500, Dow Jones Industrial Average (Djia), NasDaq 100, S&P MidCap 400, and the Russell 2000. It would be a logical assumption that the emini S&P 500 moves more than any other market. After all, volume fuels the markets, and the emini S&P 500 has more volume than any of the other indexes. However, let us look closer to see if the emini S&P 500 leads in tick movement or dollar movement.
Download the article Stocks & Commodities article by Gail Mercer, Trading the Indexes: Empowering Traders with the Russell 2000. (Stocks & Commodities V. 29:3 (24-28): Empowering Traders With the Russell 2000 by Gail Mercer.)