Day trading the dow emini contract
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Now, whether you are at a party, golfing, in your car, at a sporting event, or virtually anywhere, you can day trade as conveniently as though you were sitting in your office or home!
Past performance is not necessarily indicative of future results. Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contracts so that transactions are leveraged. A relatively small market movement will have a proportionately large impact on your account. This could work for or against you. You could lose more than your initial investment.
At the same time, traders can potentially capitalize on both rising and falling markets. There is no longer a need to tie up large sums of money purchasing all the individual stocks of every index. And, with online futures trading, you can trade through the Internet and receive your fill prices back in under a second. In day trading, you know exactly where you stand at the end of each day without the risk inherent in holding positions overnight.
When day trading, each day represents a new opportunity. Please be aware that trading futures contracts involves the potential for unlimited risk. Trading futures and options involves substantial risk of loss and is not suitable for all investors.
Past performance is not necessarily indicative of future results and the risk of loss does exist in futures trading. This is a section to start your e-mini futures education for it offers the very basics pertaining to trading these financial instruments.
E-mini futures, often referred to simply as e-minis, are smaller units of older, "grown-up" futures contracts that have been around for quite a while. E-mini contracts are still relatively new to the trading scene having arrived at it only a decade ago, while the "full" contracts have been around for longer than two decades. There are several futures markets that have developed both full and e-mini contracts. And while in real life situations these tickers may be different depending on your broker and even more on the charting platform you use, there is one thing all these contracts have in common: It trades electronically just as the other mentioned above.
Its often used ticker name is "YM. All of these e-minis have yet another thing in common: While there are now e-minis for other futures in the markets that can be commodities such as gold, silver or crude oil or currencies e.
If you are just starting in this field, I suggest that you stick to the more established emini markets that guarantee better volumes and thus also better trades due to better liquidity. How one makes money trading e-mini futures. Stock index e-minis are very often used for day trading which boils down to speculating in which direction the value price of their underlying index will move.
If you expect it to move up, you buy one or more e-mini contracts and if the price indeed moves in your favor you can then unload these contracts for a profit. If you expect it to move down, you take a short position, selling e-mini contracts, and if you predicted the move right, you can brag about the dough you have made riding the move and exiting it at your target.
Clearly, when your predictions do not pan out, you will end up with a loss. It is because of this speculation on which way the index will move that futures often lead the index price. This price for some indices can be calculated to the second decimal point, but even in such cases the price of the related emini market changes by some larger fixed values known as ticks.
Whether this is possible or not depends on your e-mini market liquidity at the given exit price. Now, you should better understand why it is always a good idea to trade liquid markets.
Simply because these markets allow you to take your profits or losses more easily. The size of the profits you can make while day trading e-minis is a function of the intraday range of your emini market. In ES, whose average intraday range is about 10 pts, the profits of 10 pts could in principle be possible, but in practice, because of the market unpredictability, most daytraders should be happy with a consistent daily profit of 2 pts which not infrequently is made only after several trades.