Day-Trading Emini Index Futures — A Futures Trading Mentor Shares Key Trading Concepts
Maybe its just me, but it seems like Emini trading is becoming more popular by the day. I have to admit I don’t know all too much about it, so I decided to go ask Marc of TradingEmini.com. Marc is a 14-year trader who worked as a proprietary trader for JP Capital, a division of Andover Trading. For the past 7 years Marc has been offering Private Mentorship with Real Money Calls, made in Real Time.
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In the article below, Marc teaches us about Eminis and shares some trading concepts to utilize with them.
The Emini S&P500 Index Future is a good instrument to trade because it is very heavily traded with volume and a thin spread, so orders are filled quickly and it has high volatility, so there are opportunities for 3 to 4 good trades during the day, up or down, with ranges between 9-20 points and technical chart analysis works well. (Each point is worth $50, split into 4 ticks of $12.50 and there are 4 contracts a year, traded on the Chicago Mercantile Exchange).
Tradingemini.com’s Six Rules to keep you in the 10% winning club Vs 90% of traders losing money.
Trading is inherently risky but by following six fundamental money management rules you keep your capital safe while building your chart reading experience.
1. $10-$15k is the minimum per Emini S&P500 contract. Then if you loose $1000-$1500 it only represents 10% of you capital which is a recoverable number compared to a $3k account where the same loss equals 50% of your account, consequently you are more likely to loose the remainder of your capital rather than recover the loss.
2. Only risk 1% of your capital per trade, then your capital can absorb 100 consecutive bad trades. Even the best systems can expect 20% loosing trades, so the 1% rule gives you room to manoeuvre.
3. Limit the hours you trade. We prefer the first 60-90 minutes, when typically there is a good trend before the lunch time chop – many professional traders trade this time period.
4. Limit the number of trades you make per day. 2-6 is a good number as usually there are up to 3 Emini trends per day and your aim should be to catch 1-2 out of the 3. Overtrading is a typical newbie vice. It racks up unnecessary commission fees and increases the risk of negative emotions like revenge trading.
5. On any one day, stop trading when losses hit 5-10% of capital. As with point 1 above, 5-10% loss is recoverable and to have reached such a level you must be reading the market wrong for whatever reason, so stop before you make the situation worse, take the time to evaluate your errors.
6. Base your stop loss strategically from the charts, not an arbitrary number of points. I expand this below.
Pre-Market Preparation Long, Short, and No-Trade Zones
Before the market opens (9.30am EST), it is crucial to prepare three trading zones (Buy Zone-Sell Zone-Chop, Dangerous Zone). To do the Daily Analysis we use weekly and daily and 60 minute charts with 6 EMAS (Exponential Moving Averages). Being prepared means you take high probability, strategic trades and keep your emotions in check, greatly reducing the risk of destructive psychological behaviours like revenge trading.
By knowing your zones in advance, once the market opens, you can quickly establish entry points plus stop loss and target points – from which you calculate a trade’s profit ratio e.g. a 1 point stop loss risked with a 3 point target equals a profit ratio of 3:1, a healthy trade, worth taking.
Essentially we are establishing Support & Resistance values. The basic principle is sell at resistance, buy at support. Using moving averages and price action keeps your system succinct yet dynamic. The less but more immediate the data you focus on, the more you will be in-tune with the market and the faster you can trigger the trade.
excellent. thanks guys.
excellent. thanks guys.
excellent. thanks guys.