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.

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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.

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Futures Trading Across Higher Time Frames

You've decided that futures trading is how you want to participate in the financial markets and the emini contract is your chosen trading instrument. Great! Index futures are a top notch way to make a good living in the markets but you must first decide on a strategy.


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Part of your strategy will be choosing a time frame in which to trade. Large profits are the goal of every trader and this can surely be accomplished if the trader exercises commitment and discipline.

When deciding upon a time frame, the common approach is to choose one that is best suited to the trader's risk tolerance and trading goals. However, regardless of what time frame you choose to focus on, by analyzing the futures market across numerous time frames you can enhance your winning percentages.

A frequent error common to new traders is executing a trade while watching market action in a single time frame. All traders in every financial market, no matter if they are trading futures, stocks, options or currencies have an ideal time frame they favor.

Assesing The Market With Differing Time Frames

Scalping enthusiast could benefit by assessing market conditions with the 5 minute chart in tandem with the one minute chart. Higher chart levels can enhance your view and provide information you may not be seeing at lower level time frames.

A day trader that favors the 15 minute chart should check out the 30 minute and hourly charts as well to improve his view of market internals.

By analyzing the market across at least two higher time frames we can better check for confirmation of the move we are anticipating. Essentially, the higher time frames acting as confirmation is a signal we can use before executing a trade which shows the strength of the set up in both your favored and higher time frames.

If you are a day trader that generally holds a position for extended periods throughout the daily session riding trend for the day using a hourly chart, it is wise to check the daily and weekly time periods as well.

The same goes for the scalper. If you are using a 3 minute chart, you should be using the five and ten minute charts also. With futures trading, some people have three different time frames open all at the same time as well as the NYSE TICK and TRIN charts.

However, trading systems which are based on simplicity typically are the best systems. Over analyzing can create information overload where too much information can cause hesitation and bad judgment resulting in bad execution.

Utilizing more than three higher time frames is more often than not, overkill. Over thinking the set-up presented by the market can make you second guess and miss an opportunity to enter and exit with a profitable trade.

If you are in the habit of trading with one time frame, odds are favorable you're struggling or you would not be reading an article about trading across multiple time frames. Once you start utilizing higher time frames, it will take some trial and error to become comfortable using a different method.

However, the results may well be surprising. You can only trade with the information you have and with a single time frame you do not have all the information you need to increase your winning percentages.

You are more then likely not seeing many opportunities when they present themselves through a one-dimensional view. A three dimensional view is far superior since it provides a wider scope of the market, helping you to react when opportunity is present. Emini future trading using higher time frames in conjunction with the time you favor can only enhance your trading.

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The Best Trading System - Selecting One

A trading system can be as simple or as complex as you wish, however, simple systems tend to do better since they eliminate information overload. If we take in too much information, the decision process becomes difficult which results in bad execution or hesitation, causing losses.

So it is best to exercise some degree of caution when choosing a trading methodology. Simplicity is ideal when we are searching for the best emini trading system to meet our needs.

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If simplicity is the goal, system design is the criteria we should look to first. Is the design of the system built with user-friendliness in mind? Nothing is more frustrating than watching the market and dealing with a difficult system.

It should flow easily between the different modules that make up a system. Your futures broker should provide fast execution when your system reveals a trade set-up and work well with your charting software or time and sales feeds.

Data feeds should be in real-time which require dependable Internet connections from a reputable Internet Service Provider. A back-up Internet connection is recommended should your ISP fail.

If you've ever been in a trade and lose your connection, frantic can best describe the feeling a trader experiences when his ISP goes down. A back up connection is a must since major losses can be the result.

The best emini trading system, as you can see, is not just a single module or one size fits all. Interaction between various tools is a requirement as outlined above.

Trading methodology is the heart of the system. Choosing a time frame to trade will be part of your system. Traditionally, day trading is the method most often associated with index futures trading, with many traders choosing scalping as their approach to the futures market.

Choosing to take small profits many times throughout the day while the daily cash market is open. Others will open positions and trade the overnight sessions when trading is much slower. Some use a combination of both scalp trading and classic day trading throughout the day.

The use of traditional Japanese candlestick charts are used by most index futures traders, while some experienced traders will use only a time and sales screen. Others use a combination of charts, indicators and oscillators to determine when to enter and exit the futures market.

Pivot points around areas of strong/minor support and resistance is another often used methodology and is very productive. As you can see, the choices are varied and trading is available to just about any methodology favored by the individual trader.

Having the best trading system that fits your personality and trading style is what we are after as futures traders. The market is complex no doubt. It is fickle and ruled entirely by the emotions of greed and fear which creates a paradox.

While we see the evidence of emotion every day in the market, we seek out a trading method which eliminates the emotional aspect of trading. Our ideal is to react only to the conditions presented by the market in technical terms, not through fear or greed.

Your system should be of such design that you automatically submit trades based only on technical analysis, without hesitation. Hesitation is the result of emotion which more often than not translates into bad execution and loss.

A good trading system will assist you in determining when to place trades based on market dynamics and technical conditions, not financial news reports, crowd mentality or geopolitical events.

Is there a perfect index futures trading system? No. Is there a trading system that will help you become a proficient? Absolutely! Odds are if you are reading this, you have some experience in the financial markets, most likely as a stock day trader, swing trader or just a long term investor.

Although if you're a long term investor, it is recommended you first read up on technical analysis since you are more likely coming from a fundamental background rather than a technical analysis background.

Short term traders live and die by technical analysis and some education in this area is important before venturing into index futures trading.

As a trader, you can build your own system or you can choose to adopt one of the better trading systems available. However you choose to proceed, finding the best emini trading system will boil down to personal choice and what best suits your trading needs and goals.

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Trading Eminis - How To Win When You Are A New Index Futures Trader

Trading eminis is a vocation which has been proven time and again that just about anyone can learn to be profitable. However, there is one underlying fact that new traders fail to acknowledge when they first begin.

Almost all will lose money initially. Why? Because most will jump into the index futures markets without the necessary knowledge to trade successfully.

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Most will have some background and possibly some varying degree of success in trading stocks. Index futures have the liquidity and movement each day which entice these new traders since stocks may be stagnant and range bound for days on end.

Futures have the ability to generate profits everyday making them the ideal day trading instrument and the number one reason novice traders jump in unprepared.

Which Contract To Trade?

Most realize in order to be successful, they will need to quickly get up to speed and seek out basic information about the futures markets. For example they may acquire information to determine which  contract they prefer to trade such as the DOW YM or the S&P 500 ES contract.

Or they may search the Internet for a live trading room and trade alongside as the moderator calls out trades. Of course most of these live trading rooms charge hundreds of dollars in monthly subscription fees, placing a strain on the new trader's funding sources with most blowing out their brokerage account within the first month or two, quickly leaving the futures markets in frustration.

Trading profitably takes work on the part of the new trader. Being impatient is probably the largest factor attributed to why most new traders fail, never to return to the index futures markets. Sure, they know huge gains can be made on a daily basis, but won't take the necessary time to understand and learn the dynamics of this fascinating market.

Knowledge is key to becoming successful at mini index futures trading!

Keep It Simple

Even more importantly, simple strategies are usually the ones that work the best far more than a tedious and complex system. The good news is, a simple trading system can be learned and traded successfully in a matter of a few weeks, providing the new traders approaches with the right frame of mind.

Most new traders are not unlike small children when Christmas is approaching. Visions of presents under the tree on Christmas morning is what dominates the minds of small children at Christmas time each year. New emini traders have visions of huge gains and piles of money which distract them from what they should be focusing on...learning to trade well.

Trading well has been covered many times here on this website for one very important reason - profits are a by-product of trading well!

Trading Well Begins With The Trader

However, trading well does not begin with adopting a system or strategy, it begins within the mind of the futures trader. The novice trader must first adopt a plan for approaching the market and it begins first with trading discipline.

What do we mean when we talk about discipline where trading is concerned? It's very easy when we first start out as index future traders to easily be swayed by a moving market.

For example, say you are using pivot points or levels of major and minor support or resistance. During the afternoon session when the New York lunch comes to an end as all of the major players return the market starts to show some life after the lunchtime blues.

The market at times can take off quickly and blow through a pivot point or level and the new trader hesitates, not entering the market as planned.

An undisciplined trader will many times force a trade out of frustration and enter the market right when the NYSE TICK is at an extreme and the move is reaching exhaustion, finding himself holding a position at the high of the day as the market recedes as sellers begin shorting the pullback.

The novice trader will then either exit quickly as excitement turns to fear or further increase his loss by holding the position hoping the market will return to the high of the day before the market closes.

The point here is, the undisciplined trader forced a trade because he failed to enter the market based on his trading plan, let emotion take over when he saw the market going up and couldn't restrain himself thinking of the cash he could be making.

The disciplined trader would have stuck to his trading plan and stayed on the sidelines if he missed his planned entry point. He understands the market will always be there and another opportunity is always right around the corner, especially with the amount of liquidity provided in the futures market.

The point is,,,,trade as a disciplined trader and trading eminis can be as profitable as you need it to be.

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How To Choose A Emini Trading Platform

Trading online is much easier now than when the mini sized contracts were first introduced a decade ago due to the advancement of trading technology available over the Internet.

With so much technology available to index future traders it is understandable people experience difficulty when choosing a emini trading platform.

With so many to choose from, as futures traders, we must first determine what are the characteristics that make up a good, usable trading platform.

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When we purchase a new automobile, most people usually take the car for a test drive. The same goes for a trading platform.

The vendor should provide a demo for you to use for a brief period of time to decide if the software is right for you, your trading plan and your personality.

Not all platforms are created equal and a demo can provide invaluable information to make your choice.
So first on our check list is does the developer of the platform provide a demo for you "test drive"?

Make sure the demo provides the data to track the S&P, Dow YM and Nasdaq NQ futures.

Several other factors should be considered when determining which trading platform is best suited for your trading purposes.

Choosing the wrong platform can increase the odds of hindering trading style and failing to profit which translate into bad money management, in this case, capital preservation.

By building your checklist of attributes needed to fit your trading goals and style, you can further enhance your chances of selecting a platform which helps you to be successful.

Although there are several platforms available to future traders, one underlying attribute required is ease of use.

Traders want to trade the markets and spend their time becoming a proficient student of the futures markets, not spending a their time learning how to manage a complicated trading platform.

User friendliness without confusing add on features which require a background in programming is desirable.

There are two types of trading platforms available. One is the stand alone module which resides on the trader's hard drive and the other is a web based online platform.

Accessibility is the strong suit of the web-based online platform. Wherever the trader can connect to the Internet, he can be up an running, trading the market.

A stand alone module based platform requires the trader to be in front of the computer in which the software based program resides on the hard drive.

In this situation, it depends mainly on the lifestyle of the individual emini trader. For those which will be trading from the same location everyday, a stand alone platform is more than adequate.

For those traders that are on the go and travel, an online platform is ideal. Also, online based programs eliminate the worry of computer crashes since the trader can easily access the market through another computer.

One very important aspect of a trading platform is data feeds.

It does not matter if you purchase the best platform on the market, it will be useless without reliable real-time market feeds.

Real-time data is a crucial component of any trading platform and reliable vendors providing data feeds are a must.

It cannot be stressed enough the importance of accurate real-time market information.

If a trader does not have confidence in the information he is receiving, it will result in poorly executed trades which translates into losses.

Very often when traders are going through the selection process of determining which trading platform to use, they fail to consider customer service, including technical support.

Unlike the cash markets which open with the morning bell and close with the sounding of the closing bell, the index futures markets continue to trade after a brief break.

With a market which trades almost entirely around the clock, it is essential that the trader have access to customer support should a problem occur with the trading platform.

If customer support is not available after normal business hours, although the futures market is open, the possibility of losing money is very real if the problem cannot be resolved quickly.

Failing to consider the importance of customer and technical support when choosing a trading platform is a recipe for disaster.

In conclusion, we have discussed some of the most important components which should be considered when choosing a emini trading platform.

Use the demo provided by vendors and spend enough time learning how they work and determine of they are a fit with your trading style.

Become familiar with the different modules and their ease of use and understanding, or lack there of. A trading system is so important to the success of a trader that sufficient time should be spent making sure the system chosen is right for you.

There are many  trading systems available and with enough research, you will find the one that best provides for your trading needs.

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Emini Trading Alerts Software

About Trading Alerts

As a new trader learns how to use trading signals, he will put himself in a place to execute more profitable trades without the need to sift through tons of financial information every market session. First, it is important to understand what is meant by a trading alert or trading signal. Rather than manually reading through trading charts, daily economic reports and a myriad of other financial data, trading systems are available which analyze data for the trader. The system analyze the data turning it into relevant information the trader can use to execute high percentage trades by issuing signals which alert the trader when possible trade set-ups are on the horizon.

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What makes a mechanical trading system great is they provide information both for possible trade entry and elimination of irrelevant information thrown at a trader each day. To be sure, one of the first mistakes a new emini trader makes is failing to spend some time learning the dynamics of the index futures market. Many traders new to the market begin trading impulsively, focused on making a ton of money rather than learning to trade proficiently. Profits are a by-product of learning to trade well and proficiently. This also applies to the use of signals and alerts. New traders fail to take the necessary time to learn a mechanical trading system and don't realize until it is too late that all signals are not created equal. With the usually happening after the rookie has executed a few bad trades and lost money. However, by understanding and employing index futures trading alerts, you can greatly enhance chances of executing winning trades far more than broken, losing trades. This is the power of this kind of system.

Why Emini Trading Using Eimni Trading Alerts

Trading is, without doubt, one of the top money making ventures available to just about anyone with a drive to succeed. Every year, more and more people come to the futures markets hoping to make it big and profit trading the S&P 500 emini, Dow YM emini and Nasdaq NQ futures. Unfortunately, too many think  trading is simplistic and easy when in fact, it is complicated and difficult, especially for those without any market experience. Because of this reason, the Internet has seen an explosion of trading alert services, charting programs and without a doubt, the proliferation of questionable and expensive trading rooms, all preying on those new to the index futures trading market. That being said, there are exceptional services available to inexperienced traders which can quickly get them up to speed, teaching them the skills necessary to become profitable using alerts and signals.

Traditionally, traders have utilized a wide variety of charts and indicators to participate in the index future markets. These traditional tools and their use are still relevant and applied daily by experienced traders. But they require an extended learning curve coupled with many trading losses before becoming useful profitably. The implementation of trading alerts can greatly reduce the amount of losses associated with a learning curve, common to new traders. By relying on these systems designed by experienced index futures traders, accurate buy and sell signals will be issued by the system depending on the condition of the market. By using algorithms, trading software designed students of the markets can produce better results rather than dependence on archaic traditional methods.

 Moreover, new futures traders can, depending on the provider, utilize a demo or pay for a trial period to determine if the alert system fits in within their trading style and personality. Furthermore, by choosing a reputable trading system with built in alerts is a exceptional way to protect trading capital, the life blood of futures trading, until such time the new trader gains a better understanding of the futures markets. Using a reputable system allows the new trader to gain confidence while also allowing him to trade in a real-time market situation.

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S&P, Dow, NASDAQ Or Russell Futures: Which One To Trade?

Those new to emini trading often have difficulty determining which index futures contract is the best fit for them. For this reason we are going to outline and profile each contract for those who haven’t quite yet grasped the differences between these four very unique trading instruments.

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The S&P futures contract is the most popular and rightly so since not only is it traded exclusively by many, it is also used by stock traders as a strong indicator for daily market direction. Most stock traders will always have a live chart or ticker open on their trading platform displaying real-time feeds of these futures since they are literally the ring in the bull’s nose. Wherever they go, the cash market will follow making the S&P 500 index futures a very important tool for those utilizing short term trading methods in the stock markets.

S&P 500 Futures Contract

The Chicago Mercantile Exchange or CME, introduced the S&P mini sized contract in the 90’s as an alternative to the larger sized S&P futures contract since the original contract became too large for many smaller traders to utilize. The smaller S&P mini contract is one-fifth the size of the larger, original contract and is traded electronically through the Globex system.

The contract up ticks and down ticks in quarter points and is the minimum price movement with each quarter point tick equal to $12.50 with a whole point value of $50. The S&P futures market is highly liquid and is employed by institutional traders for speculation and hedging. It is not uncommon for the mini SP contract to trade as many as ten-thousand shares in the course of one minute to give an example of market depth and the amount of daily volume as well as to underscore their importance as a vital trading indicator and about market sentiment. Trading without one eye on the S&P futures is akin to trading blindfolded.

ES S&P

The symbol for the S&P futures contract is ES. Of course this only refers to the basic contract in general terms. Futures contracts are derivatives which means their value is derived from an underlying issue, in this case the S&P 500 cash market. As a derivative, they have expiration dates and cease to hold any value after a set expiry date. Expiry is determined by four different months starting with March, followed by June, September, and December, meaning there are four different contracts within a calendar year. Each month has a different letter within the ES symbol to identify which month the contract will expire. The identifying letters are as follows:

March = H
June = M
September = U
December = Z

Not only does the ES contract symbol contain the month in which it expires, it will also contain in which year it expires. For example, if someone were trading an ES contract which will expire in December 2012, the symbol would be ESZ12, which identifies what type of contract (ES) along with what year (09) and month (Z) the contract will expire.

The ES is an excellent futures instrument in which to trade, however it is not the only one by any means. Some traders prefer trading on different exchanges than the S&P 500 as we will discover.

NASDAQ NQ Mini Futures Contract

After the introduction of the ES S&P 500 futures contract the NASDAQ NQwas introduced. Tracking the top 100 stocks on the tech heavy NASDAQ stock exchange, the NASDAQ NQ soon became very popular among index futures traders, although never surpassing the popularity of the ES. Designated with the symbol NQ, the NASDAQ contract also trades in quarter points but is valued differently. Each quarter up tick or down tick is equal to five dollars ($5), with a total up tick or down tick point worth twenty dollars ($20).

The same symbol system applies as the ES as does expiry months. With the NQ, if a trader were to take a position in the December 2012 contract, the symbol would be NQ12Z. The mini NQ also has excellent liquidity and volume each day allowing futures traders several opportunities each day to initiate trades.

DOW YM Mini Futures Contract

Although the DOW YM contract has not been around quite as long as the ES or the NQ, it has however, seen an explosion in popularity among index futures traders. Tracking the Dow Jones Industrials Stock Exchange, the DOW mini futures or YM as it is designated, has seen increased volume and liquidity since it’s introduction and has converted many long term ES traders which now trade the YM exclusively

YM futures contracts follow the same symbol designations as the ES and NQ as outlined above. A December 2012 contract would be YM12Z identifying the contract type (YM-DOW); expiry year (12); and expiry month (Z-Dec.). Another factor unique to the DOW YM contract unlike the ES or NQ is it does not trade in quarter points, rather it trades in whole points with each up tick or down tick equal to five dollars ($5). Growing in volume and popularity, the YM is an excellent choice for all index futures traders including those new to the market seeking an education and to test strategies.

Russell 2000 Mini Contracts

Although less utilized than the other three contracts for trading, the mini Russell contract is still an excellent choice as a trading instrument. The Russell 2000 mini is one-fifth the size of the larger contract with the Russell 2000 tracking 2000 securities on the Russell 3000 stock exchange.

This contract is also uniquely different from the other three in it trades in .10 increments equal to $10 for every .10 up tick or down tick with each whole point equal to one hundred dollars ($100). The symbol for the Russell is ER and fit’s the same criteria as the other 3 for identification purposes and expiry. A December 2012 contract would designated as ERZ12. Some traders favor the Russell  contract over all others, claiming this contract trends better than the others and eliminates noise since it tracks many more stocks than the other three index futures contracts.

Strategy

Index Futures trading is most often utilized as a day trading method or scalping method and all positions are exited when the bells sounds closing the cash market, although the futures market is open 23 hours daily. Traders employ many different approaches when trading futures contracts. Some rely only on support and resistance numbers in conjunction with pivot points. Others will use simple moving averages and crossover methodologies, while some will utilize classic Japanese candlestick formations in combination with indicators and oscillators such as the Stochastic, MACD or RSI. Whatever method chosen, emini trading lends itself very well to different approaches to the index futures market no matter which contract is traded.

As mentioned above, the S&P mini futures should be used as a indicator of market direction even if the trader is utilizing a different index futures contract, since the ES is the ring in the bull’s nose and the market WILL follow their direction. Also, the NYSE TICK is an excellent indicator for determining market internals and sentiment. Newer traders may wish to join a trading room to follow along as experience traders call out trades and explain why they enter and exit the market at certain points. A trading room is an excellent way to build confidence and skill levels for rookie traders.

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Emini Education Reality Check - Scared Money Never Wins

Short term trading is a business - a very serious business that requires skill and discipline. Everyday, people trade the Emini index futures markets without these two very important elements so necessary for success.

Having no goals or objectives, rarely having a trading system in place, they throw money into the markets hoping “today” will be different. Unfortunately, today could be different and the fledgling trader could finish the day having executed one or two winning trades.


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Sadly, this same trader will give it all back tomorrow until eventually his trading account has been decimated for no other reason than lack of skill and discipline.


The futures markets are tempting. There is big money to be made for sure - but only for those who have taken the time to develop the skills necessary to trade well.

Experienced traders know profits are the result of trading well. They don’t focus on profits, they focus on trading well and follow the rules of their trading system without exception, never wavering.

They don’t let hope, fear and greed influence their trading decisions. They understand the dynamics of they market and have developed a system which eliminates the emotional element that plagues inexperienced players.

Protect Your Capital

Protecting trading capital or money management is what separates successful traders from unsuccessful losing traders who don’t last very long. Although, as traders we must all start somewhere, and almost all of us will start out losing. In fact, losing is part of trading. No trader wins with each and every trade.

However, the experienced trader does excel in preservation of capital and does not abuse it by executing trades on a guess or a gut feeling. He knows his capital is too precious to be wasted on careless, undisciplined trades.

They don’t chase the market, they don’t over-trade their account and execute trades just to be in the market, they don’t ignore their stop and hold a losing position “hoping” the market will turn in their favor. Sure, you’ve heard all of this before but if you’re reading this, odds are you haven’t heeded these important rules of the game.

Success will only come once the trader understands he must protect his capital as all cost and stop focusing on making a profit and learn to trade well by exercising discipline.

Scared Money Never Wins

Two types of people trade with scared money. The first are the ill-prepared and inexperienced players who are under-capitalized trading with money they cannot afford to lose. Usually these people are on an emotional roller coaster and depending on how much money they initially opened their account with, will determine how long before they crash and burn.

Some days are winners, more are losers because of desperation. Hope and fear rule these pitiful market participants. We won’t call them traders because they’re not.

They are gamblers hoping a miracle will happen and they will somehow survive long enough to miraculously turn into a successful index futures trader.

Unfortunately, they won’t ever become successful with most eventually blowing out their trading account and walking away in frustration. However, a few will learn from the disaster and eventually develop the skill and discipline necessary to be successful through a trading education.

The other type of scared money players are those that cannot accept losses. Unfortunately these types seldom develop into long term futures traders.

Losses are a part of being a successful futures trader or any type of trader for that matter. They need a guarantee that no losses will be sustained and will lose untold hours of sleep mulling over one or two broken trades. If you can’t handle losses, the index future market is best left alone.

Make no mistake, if you are considering trading eminis you will be unsuccessful and throw good money into the market with nothing to show for it other than an empty brokerage account. However, by gaining an education that will develop skill and discipline in conjunction with a proven trading system, you can successfully trade index futures and become one of the select few who win at the game.

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NASDAQ - Trade The NQ Futures

Mini-sized index futures trading offers several different contracts to trade including the NASDAQ Emini which tracks 100 of the largest companies listed on the tech heavy NASDAQ stock exchange. Introduced in 1997 as a smaller version of the standard futures contract, the NQ as it is called, is one fifth the size of the larger version and traded on the CME Globex Platform.

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Although not as popular as it’s cousin the S&P 500 ES contract, the NQ trades with excellent liquidity and volatility making it an outstanding choice for people utilizing a day trading or scalp trading methodology. The NQ trades in quarter increments or .25 with a minimum price fluctuation of .25 yielding $5. One total point equates to twenty dollars. For example:

If a trader went long the market with one mini NQ contract at 1130 and sold at 1155.50 he would have a profit of $510 with the equation represented as follows: 25.5 points x $20 = $510

All index futures contracts have expiration dates with each contract expiring every three months or four times per year. Expiry months are as follows; March, June, September and December with each month assigned a specific letter for it’s expiration month. March is assigned the letter H, June is M, September is U and December is Z.

The future contract will also have the year in which it expires included in its symbol. The symbol identifies what type of emini contract, expiration year and month it will expire. For example: A NASDAQ NQ contract which expires in December of 2012 would be designated by the symbol NQZ12.

Trading The NQ Futures

Since their introduction in 1997, mini NQ futures have grown into a popular financial instrument in which short term traders have chosen to both day trade and scalp trade. Since margin requirements are a great deal less than what is required for the larger contract, popularity is at all time high. Also, a few years ago regulators required a $25,000 minimum on all stock day trading accounts which eliminated many from day trading stocks with most moving over to emini futures trading.

Day Trading The NASDAQ NQ

Day trading is probably the most appealing form of trading approach for the NQ futures contract. Futures traders all have their chosen methods and trading systems to trade the mini NQ. Some may only open one trade daily and ride the market all day into the close, while others may initiate multiple trades during the daily session.

Some traders utilize a moving average crossover method, only opening trades when one moving average crosses over another. Others simply use pivot points as their method of trading, only entering trades when the market reaches certain areas of support and resistance. Pivot point levels are calculated using the previous day’s open, high , low and close which determines the current day’s major and minor levels of support and resistance as well as a pivot point level where the market is likely to change the trend and move in the opposite direction.

Others will use classic Japanese candlestick patterns to determine market entry and exit. Some will use indicators and oscillators to ascertain when the market is either overbought or oversold and likely to pullback, often using a contrarian view of the market. As you can see, NASDAQ NQ contracts are an excellent choice for utilizing a day trading method with a variety of approaches to the market.

NASDAQ NQ Scalping

Scalp trading the NQ is a method of profiting from the market where the trader expects to enter and exit the market rapidly, usually holding a position for only a few minutes. The idea is to “scalp” a point or two quickly exit the trade.

Sometimes executing many trades throughout the daily session, the scalp trader is not swing for the fences hoping to make huge gains with one trade. On the contrary, it can be said the scalp trader is happiest when he is out of the market since this method reduces exposure time.

With tight stops in place, the scalp trader knows he will not lose much on bad trades since he will quickly be out if the trade goes south.

Although this type of trading is used by many experienced traders, it is also an excellent choice for those new to emini trading. Using one contract, novice traders can get their feet wet and learn market dynamics as they build their confidence.

By using the scalp trading method, the rookie trader need not worry about a devastating loss if they follow traditional scalp trading rules and use tight stops and exit quickly once a trade turns sour.

Day trading or emini scalping, no matter which method is chosen, the NASDAQ NQ contract lends itself very well to either since the futures markets are volatile and liquid enough to make many trades daily. The NQ is an excellent choice for traders which have chosen to begin a index futures trading career

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Learning Index Futures Trading With A Focus On Trading Well

Make no mistake, the odds of long term success at short term trading stands firmly against most all who enter the financial markets. Each year, beginning traders set out with a plan to educate themselves about emini futures trading with most soon realizing index futures trading is one of the most difficult challenges they’ve ever experienced.

Once they reach this realization most will throw in the towel, ending their short trading careers in frustration, while a serious few will stay in the futures game long enough to learn how to trade and become successful.

Will you become one of the few serious winners or will you go home with the losers?

Check The Daily Emini Trading Room Results

Profiting consistently in the index futures markets demands standing against the crowd mentality which requires a level of commitment and dedication most cannot successfully achieve.

Learn To Trade Well

By beginning to build on these skills early in your trading career, you will be one step ahead and on your way to trading well. Trading well is what successful traders strive for everyday in the markets with profits being the result of trading well.

Most index futures traders use various techniques that comprise a trading system to execute potential trades. By learning to read and understand the dynamics of the market as well as developing an understanding of the internal and external forces which impact the markets, will they set themselves apart from the those that have less commitment to trading well.

The index futures market is one of extremes with traders experiencing winning and losing on a daily basis since all experienced traders know losing trades are a part of trading well. Losses are a part of futures trading and to be expected.

How the trader handles losses is the difference between a successful trader and someone who will not last long in the game. The emotional up and downs, so much a part of the markets, drives many rookies to a quick exit.

Once you learn how to handle your losing trades and accept losses equally with controlling your emotions, you’ve matured as a trader.

Learning to trade well is the key to the game. Beginners come into the futures markets raw and reckless with no clear understanding of market dynamics and most importantly, with no trading system or an expectancy.

Learn from mental mistakes. Make notes on bad executions, cut losses short and use trailing stops. Learn to exercise discipline since lack of this important skill can end a trading career far more rapidly than a lack of trading knowledge.

Many new and inexperienced traders often find themselves in a cycle of winning and losing bigger, over-trading to “get back” what they lost on the previous trade, eventually blowing out their trading account. At this point the trader will either give up or commit to gaining the skills through trading education to become successful.

Use a Trading Mentor

Locate an experienced trader that’s willing to share his knowledge about the markets. Ask about winning  trading systems, bad habits and losing strategies. Find a mentoring program that utilizes a trading system that can be expanded on once you gain confidence and experience at index mini-sized futures trading.

By joining a mentoring program, beginning traders can learn the system used by the mentor with some offering a live  trading room so the beginner can follow along during live trading sessions. Turn their knowledge into your success and follow their advice. The assistance you receive eliminates throwing money away and many months of frustration.

Trading requires that you learn to crawl before you walk. Unfortunately, many who enter the futures markets each year believe they can walk when they haven’t yet learned to crawl.

The futures trading roadside is littered with the blown out trading accounts of novices who didn’t have what it takes, focused only on the potential profits to be made rather than learning to trade well.

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