Posts tagged ‘futures trading’

ES Emini Trading: Why Not You

By , 4 January, 2010, No Comment

The newspaper have for years written enumerable article about stocks busts, market crashes and the economic calamities that face stock investors.  It makes good news, and adds to the negative image of investing in equities and the market in general.

But those calamities are problems that face long term investors.  You know, the buy and hold guys.   For years, the general line of thinking was to buy a stock and hold onto for years and reap the rewards in your retirement years.  Of course, the dynamic nature of the stock has, to a certain extent, changed that line of thinking.

Of course, there are still the hordes of mutual fund holders who have invested untold billions in these investment vehicles.  I have a low opinion of mutual funds, as an investor cannot exit a fund until the end of the day.  Additionally, very few fund managers even come close to matching the indexes they are supposed to be imitating.  Why pay exorbitant fees for substandard performance?  I will never understand it, but there are trillions of dollars still invested in these investment vehicles.

However, recent changes in investment structuring from the Chicago Mercantile Exchange has made investment for primary income a very attainable goal.  Several product lines are aimed directly at the consumer market and priced well within the average budget.   The are called e-mini’s and are investments that are traded during the day, and seldom held overnight.  No worrying about the stock market here, you are in complete control of your investment future.

I don’t want to give you the impression that these investment are like ATM machines that simply spit out money all day, but with proper training and practice a trader can easily earn $500 a day or more and not hold any positions over night.  Of course, most individuals have never given serious consideration to investing in the markets, which many consider relegated to Wall Street experts.  But nothing could be farther from the truth.

There are many courses, some home study, that are reasonably priced that will give you more than the pre-requisite knowledge you need to be an effective trader.  Thousands of people, from housewives to businessman, have turned to trading and greatly increased their income and improved their lifestyle.

The secret is training.  It is very important that a trader spends time learning the slightly illogical movements of the market.  Again, with proper knowledge this illogical movement becomes second nature to understand.

The benefits to trading for a living are many fold:

1.  More time with your family and children.
2.  No more boss, your self-discipline is the key to success.
3.  Time for leisure activities and enjoying the fine things in life.
4.  You control your income.  You have the skill to make money, and nobody can take that away from you, fire you, or change your job.  More than anything, once you learn to trade, you can become completely in control of your lifestyle.
So, I propose that you consider exploring the benefits of trading and see if it suits you.  It’s not for everyone, but it’s wonderful for a lot more people, especially if they have the knowledge of what is possible in trading right from your home.  You are your own boss, and master of you own lifestyle.  No more corporate mentality to deal with.

ES Emini Day Trading: Eight Habits of Successful Trading Scalpers

By , 19 December, 2009, No Comment

ES Emini Day Trading:  Eight Habits of Successful Trading Scalpers

Not everyone day trades in the same manner, but successful scalpers tend to share some similar characteristics.  Over the years, I have noticed that:

1.  A good scalper is familiar with the contract he is trading.  He has extensive experience trading the contract, and most scalpers will tell you that every futures contract has it’s own idiosyncracies that make it unique.  Trading a contract you are unfamiliar with can be fun, if you are trading low contract numbers and trying to learn, but it is a tough place to try and make money.

2.  A good scalper is in complete control of his trading account.  He does not overtrade or trade more contracts than his pre-set risk tolerance.  There is often a tendency among less talented scalpers to start trading larger contract amounts if they find themselves having a bad day.  A good scalper does not try to over compensate and stays within the parameters he lives by in his trading life.  Doubling down is not a good way to make up for successive losing trades.

3.  A good scalper is self-disciplined and stays within himself.  He has a system and his goal is to execute his system flawlessly.  He does not take on a risky trade that is not within the parameters of his entries, and he does not bail out of a trade that is still within his parameters if he starts feeling bad about the trade.  The ability to stay under control during difficult trading times is the hallmark of a great scalper.

4.  A good scalper has a solid understanding of his own ability.  Some markets are very difficult to trade, especially when the price action is whipshawing back and forth and there is no clear trend.  There are risky techniques to trade these markets, but they involve considerable risk which is probably outside the risk parameters of the scalpers.   Trading is not like Texas Hold ‘Em, you never go all in, and you never bluff.

5.  A good scalper realizes that the market is always right and he is always wrong.  This is a tough one to swallow, but when I make a losing trade, even though the set up was just exactly what I was looking for and the price started moving in the expected direction, then turns south and I get stop out, I am wrong.  The market is a constant, so it is always right.  It may not always be logical, but it is the ultimate decider of trading truth.

6.  A good scalper keeps track of his trading.  Most good scalpers keep a trading diary and perhaps even the daily chart for every day they trade.  I frequently go back six months and look at the things I did well and some of the things I did poorly.  It is part of the method of learning to trade to keep track of where you have been and revisit that place from time to time.  You don’t live in the past or dwell on your mistakes, you learn from your mistakes.

7.  A good scalper controls all the outside variables in his trading environment.  Many traders listen to music while they trade, some prefer silence, but very few listen to the trendy market television shows that blare out all sorts of speculation and rumor.  Scalpers trade the chart in front of them, and that chart contains all the information they need.  There is no need for some television talking head to skew your thinking, and it can happen.  The trading atmosphere should be away from the family, tv, radio anything that can distract, and the family should understand that while dad is trading he should be left to trade.

8.  And finally, a good trader has a healthy perspective on life.  He understands that as a scalper he does not have to worry about the broader trends effecting the economy or the world, at least from a trading standpoint.   He knows that all the information he needs is right there in the price action and indicators he has come to rely upon, and he trust his system to serve him well.  Trading isn’t everything in his life, but it is his income.  But trading gives him the time to spend with his children and family, his leisure time is enhanced, and he has a chance to make the world a better place instead of working long hours in the corporate life.

I am a long time retail and institutional trader who now only trades part time, usually in the morning. I enjoy writing informational articles about my style of trading so others may benefit.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 16 December, 2009, No Comment

Tomorrow should be an interesting day, as I am sure the market will be keeping an eye on the jobless numbers. Along with the others indicators to be announced, especially if we get some mixed signals, the day might turn out a bit choppy.

Read More →

ES Emini Day Trading: The Perfect Day Job

By , 16 December, 2009, No Comment

Day trading allows you to get your life back from the 9-5 grind of a regular job. I get to spend more time with my family and children, along with having time for some of the leisure pursuits I have always dreamed of doing. Trading is not for everyone, but most people can be taught to trade with profitable results, and you only improve as you gain more and more experience.

Read More →

ES Emini Day Trading: The Basics-Long or Short on Your Trades

By , 16 December, 2009, No Comment

ES Emini Day Trading: The Basics-Long or Short on Your Trades

I often get a chuckle when I see trading programs that claim you can make money in both up and down markets.  Of course you can, when the market is going up you are long a position, and when the market is going down you are short a position.  It’s pretty simple, at first glance.

But how does it really work?

First let me point out that the mechanisms and terminology for “long” and “short” are different when referring to futures contracts as oppose to the manner in which “short” and “long” are implemented in trading stocks.  Though the end result of both types of transactions is similar, the mechanism for accomplishing a stock short and a futures short are quite different.

When traders who speculate go long, they presume the price will rise in an electronic trading exchange.  The idea is fairly simple to explain, let us say the price of the Dow emini (called the YM contract) is trading at 1000 and you buy long, your hope is that the price will go up and you will profit when you sell.

When speculators sell short, they presume the price will fall in an electronic trading exchange.  Again, the idea is fairly similar.  Let’s again say the price of the YM contract is 1000 and you sell short, your hope is that the price will go down and you will profit when you close the position.

So, in essence, in a long position you buy first then sell, and in a short position you sell first then get bought out (called closing out).

We understand now that you can make money buy going long and the market moves upward, and if you sell short and the market moves down.  But this is a good news and bad news proposition.  If you take a long position and the market moves upward, your profit potential is unlimited, and visa versa for a short position.  This makes futures contracts very attractive.  But futures contracts are also a dog that bites, and if you go long and the market moves down, in the opposite direction you thought, your potential for loss is unlimited.  The same holds true with short positions, if you sell short and the market moves upward, your potential for loss is unlimited.

Uh-oh, this doesn’t sound so wonderful after all, does it?

There are measures that all futures speculators employ to limit risk.  These are called stops and we will spend some time in a future article about the methods employed using stops to make sure that you don’t let a loss destroy your account.  Further, proper money management of your future accounts, that is, not taking positions that are inappropriately large for the size of the individuals futures account must be observed to avoid averse outcomes in trading.  The important thing in this final paragraph to understand is that we can trade in up and down markets and all traders employ measures to control risk in their trading.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

ES Emini Day Trading: More on the Scalping Style of Trading

By , 15 December, 2009, No Comment

One of the toughest occupations to define is that of a trader.  There are countless variations on methods for trading the ES Emini contract.  Most forms of trading differ in the length of time the trader holds a given contract.  Of course, all traders attempt to accomplish the same goal: profit by moves in the market.  It is simply the manner in which traders quantify moves in the market the delineates them from each other.

Before I continue much further, I should state that I am a dedicated scalper.  I never hold contracts overnight, and my average trade seldom lasts more than twenty minutes.  I am looking to snatch small 2-3 point moves in the market and cash in on them.  Generally speaking, I am unconcerned about the fundamentals of the market and concentrate solely on trading the chart in front of me, with little consideration for what the market is going to do tomorrow, next week or next year.  My time frame in trading is strictly “now.”

Scalp trading is about making many small gains throughout the day and never about trying to hit a “home run” on a trade.  Scalpers also rely heavily upon technical indicators and thus, most scalpers are experienced traders.  Scalp traders risks are minimal and are an effective use of trading capital since this method of trading usually generates more winning trades than traditional day trading.  Scalpers generally run very tight stops and limits and are extremely risk averse.  I would also point out that beginning traders can make use of scalping techniques.  I point novice traders in the direction of scalping because of the lower risks involved with this style of trading.  Still, even Scalping takes a high level of self discipline to be successful.

One component of scalping that is often overlooked is the high degree of concentration that is required to scalp effectively.  The chance to make sizable gains sometimes comes rapidly and the trader has to be prepared to exit his trade when the correct opportunity rises…because you may only get once chance to make the winning trade in a given trading sequence.

The technical indicators most scalpers use vary widely from trader to trader, and are generally not shared with others.  It is sort of like having a great fishing spot and not wanting to share it with an army of fisherman who would fish it out quickly.  Generally speaking though, scalpers use momentum indicators set to very short time periods.  The CCI, MACD, Stochastic indicator and RSI are all common oscillators the scalper utilizes in various capacities.  Of course, support and resistance are among the most important tools the scalper uses, along with pivot points and theoretical support and resistance calculated from the pivot point.

It takes some practice, but scalping can be as profitable as any trading method, and there are a lot less headaches.  You don’t lose any sleep on overnight trades because you never have a trade overnight.  It is my style of choice.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

ES Emini Day Trading: Charting Software

By , 12 December, 2009, 1 Comment

I like my chart to layout in a certain fashion, and I want my software to have the ability to allow me to layout my charts in the manner I feel comfortable.

Read More →
Page 2 of 15«12345»10...Last »
Easy AdSense by Unreal