Emini Trading Tips - Three That Are Important

Although many are drawn to the financial markets because they can be lucrative, most will leave in failure. Why?

Lack of discipline. In this blog post, we will cover three very important emini trading tips that can increase your chances of becoming a successful futures trader.

Check The Daily Emini Trading Room Results

Mini futures day trading offers something other forms of trading does not…short term profits, everyday!

The level of risk involved with index futures trading is substantially high but new traders can learn to become successful.

Most new participants (we will call them participants because they aren’t traders) will fail miserably because they are more focused on gambling rather than trading with purpose.

Getting It Right In The Beginning

Profits, to them, are more important than learning a skill and increasing knowledge. They, in effect, have the process backwards. Profits are only a result of gaining the skill to trade first.

Many increase the number of contracts they are trading from one to two or more before they are ready which results in larger losses and eventually blowing out their trading account.

Trading with one contract until such time the necessary skill level is gained and accounts levels justify increasing the number of contracts, should always be the rule.

This is one area where discipline is necessary.

It’s easy for a new trader to throw caution to the wind after a successful trade rationalizing, “I could have made more had I only traded with more contracts“.

Don’t do it!!!

Tip number one is; never ever increase the number of contracts until you are ready and your trading account capital can tolerate failed trade draw downs.

Always know the prevailing trend for the day.

Countertrend methodologies are the domain of experienced traders whom have the trading account balances to withstand the loss should the countertrend method go bad.

In trading, the trend is your friend!

Every level of trading throughout the daily session is effected by the underlying trend.

If you trade with the prevailing trend when trading, your odds of success are greater.

Always know what the current trend is by checking higher time frames before the opening bell.

Look at the hourly, daily, weekly and even the monthly time frames.

This information may seem unimportant to you as a  day trader since the goal is short term profits.

Nothing could be further from the truth. So index futures trading tip number two is to always trade with the prevailing trend.

Trading tip number three is another area where new participants fail miserably:

Obeying stop losses is also where a new trader often lets the gambling mentality takeover, leading to disaster.

Stops are there for a reason, to stop the trader from taking a larger than anticipated loss.

Where the new participant fails is he lets emotion take over when a trade goes against them, hoping the market will return to their entry point or higher.

In some cases this does happen but the novice failed to trade and only gambled.

Do this over and over and you will soon find yourself with a empty trading account.

Stops are there to be obeyed and not disregarded - EVER!

Trading is difficult enough without a proper trading system in place.

Why would anyone approach the index futures market without a proper trading plan in place?

Because they are more focused on profits rather than learning to trade well.

Follow these trading tips and you could be well on your way to being a successful  futures trader.

Read More

Scalping Futures Using Emini Contracts

Although as traders we use various methods to make our money from the markets, scalping futures using emini contracts is one method experienced traders use frequently.

If you're new to the index futures market, in this article we will explain how using this method can reduce your exposure while allowing you to reach your trading goals and increase your confidence and grow as a futures trader.


Check The Daily Emini Trading Room Results

By nature, trades executed using the scalping method are designed to get the trader in and out of the market quickly.

Usually with no more than a few minutes elapsing between entry and exit with the trader pocketing a small profit. Since the time frame is small, exposure to the market is significantly reduced thereby protecting precious capital.

Shorter Time Frames - Less Exposure

With traditional emini day trading, the trader is focused on a larger time frame, ideally entering a trade and riding the current days trend, banking larger profits than the trader utilizing a scalping method.

However, the day trader risk more exposure to market forces by holding a position for longer periods.

Scalping mini-sized contracts is a much more rapid type of trading with traders focused more on smaller movements in market action.

Accumulating profits with each trade, the trader will execute several times more trades throughout the daily session than those using a futures day trading methodology.

Since this type of trading is faster than traditional day trading, the scalp trader must be more focused on his trading rules and sticking to his money management system.

Although experienced traders utilize scalping methods, this form of trading lends itself very well to the new index futures trader.

Day trading methods normally allow for more liberal stop losses before exiting a losing trade.

However, scalp trading by design, requires the position be exited quickly should the trade turn south minimizing trading losses.

Stealth and Favorable Odds

Scalping futures is not unlike a submarine using stealth to stalk and attack an opposing target.

The scalper will only execute trades when the odds are in his favor by employing tactics and strategies which exploit favorable market conditions.

In most cases, other traders will never know he's there, quickly entering and exiting the market, waiting on the next profitable set-up.

Although many believe scalp trading to be difficult, in most cases a simple strategy or one tactic can be used over and over.

The futures market offers many opportunities throughout the daily sessions for a skilled scalper to enter many trades everyday, making it possible for him to make as much profit as a traditional day trader.

Scalpers or day traders never hold positions over night, going home with a flat account with no exposure to the news and geopolitical events which can affect the overnight futures markets.

Hence the scalper sleeps worry free each night. In fact, the scalper seldom if ever concerns himself with daily financial reports or anything that can affect the markets, relying only on the technical attributes of the futures markets.

Ideal Conditions For the Scalp Trade

Certain conditions need to be present within the index futures market for successful scalp trading tactics.

Fortunately, these conditions are almost always present in the daily futures trading sessions.

Liquidity is one characteristic of the futures market which is always present. Thousands of contracts are bought and sold each day without wild price swings making them extremely attractive to short term traders.

Volatility is another condition which is needed for scalpers to trade successfully. The index futures market can be highly volatile in some instances like when an FOMC announcement is released other financial news hits the news wires.

At times such as these, the wise trader stands aside and lets the market sort out the news before considering a new trade.

However, the futures markets has enough volatility on normal trading days which allow the scalp trader to enter and exit the market multiple times everyday.

The scalp trader learns to exploit these characteristics of the futures market and profit.

By exercising discipline and obeying the rules of their trading system such as exiting the market when stop losses are hit and not swinging for the fences and focusing on small profits, scalping futures with emini contracts is an excellent way to profit from the financial markets.

Read More

Emini Pivot Points - A Powerful Emini Simple Indicator

Simplicity should be the goal of all index futures traders when it comes to their trading methodology.

Uncomplicated methods allow the trader to watch market action without the level of stress associated with a complex system, freeing them to concentrate on potential trade set-ups.

Emini pivot points are one such  simple trading indicator many experienced traders employ exclusively in the index futures markets with excellent results.

Check The Daily Emini Trading Room Results

A powerful technical analysis tool, pivot points have proven to be effective across all financial markets no matter what instrument is traded, whether futures contracts, stocks and even currencies.

Many trading services provide futures traders daily pivot points along with import levels of support and resistance before the market opens.

These chart setting services are affordable and an excellent tool for people choosing to trade using pivot points in conjunction with support and resistance levels.

If you are unfamiliar with pivot points and using them as a simple indicator, follow along and learn how they are implemented by futures traders to effectively trade the ES , YM and NQ futures contracts.

A Change In Market Direction

If you've been around the financial market for any length of time, you've heard of leading and lagging indicators. Pivot points are commonly referred to as a leading inductor since the area of the pivot point is established before the market opens.

A pivot is defined as a point on which something turns. In the index futures trading world, this means a change of short term trend.

For example, if the market opened down and continued down throughout the morning session, the trend is down so far for the day. As the market continues down and bounces off an area of support and reverses, the trend is still considered down until is reaches the pivot point for the day.

Once price action pushes through the pivot point, the trend has changed to upwards. Many traders use these pre-defined areas, both pivot points and levels of support and resistance, to initiate trades.

Drawing The Lines

If you take pivots points and levels of support and resistance numbers and draw lines on your chart, odds are they will line up with the areas where changes of trend, bounces and pullbacks have occurred in the past or very near that area.

Some traders only use a time and sales screen with these levels written on a sheet of paper without using a chart. A testament to the power of pivot points and levels of support and resistance when used properly.

Calculating Pivot Points

Because they are a leading indicator, the trader knows in advance what might occur should price action reach one of these levels.

As we mentioned above, simplicity is what we should look for in a indicator and the mathematical calculation to determine pivots points and other levels is a simple formula. By using numbers from the previous days session, we can determine the possible trading range  for the following day.

By using the previous days low of the day, the high of the day and the closing price and divide by three, we can easily enough generate the range for the next trading session.

If you are not sure what is meant by a range, it is simply the low and high of a period of time. In this case the high would be how far the market went as bulls pushed the market up and the low would be how low sellers sold the market for the session. A Pivot Point Calculator can be used to calculate daily, weekly and monthly pivot points.

The range is a complete picture of what took place during the session. Within this range, there will be evidence of struggle where bulls and bears fought over lines of support and resistance with the pivot point being where the trend changed from up to down or down to up.

The pivot point is an indicator of market sentiment and the mood of emini traders. Most experienced traders advocate going long if the market is above the pivot point and short selling the market if it is below the pivot point line.

At first, pivot points may seem complicated. However once you begin using them, you will soon realize how easy they are to apply as a simple indicator of current market direction.

Many experienced traders have used them to such levels of success, they would not even consider using any other indicator to trade the index futures market. Pivot points can be used with all of the index futures including the ES emini, YM, NQ and the Russell with equal results.

Read More