Emini Day Trading

TradeStation Announces Launch of All-New Options Trading Platform
17, 2011 (GLOBE NEWSWIRE) — TradeStation, the award-winning broker-dealer for stock, options, futures and forex traders, today announced the launch of its all-new OptionStation Pro options trading platform. The launch will coincide with the …
Read more on GlobeNewsWire (press release)

U.S. Regulators' Epic Fail
There is no guardian angel for futures traders who's ready to step in and backstop the customer accounts of a failed futures broker. There's no insurance fund sitting around waiting to make right the wrongs of that failed broker. …
Read more on Motley Fool

MF Global theft has destroyed the confidence in the futures and options markets
After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as …
Read more on Examiner.com

Ever see the movie, the Untouchables? It’s about a government agent, Eliot Ness who, along with his band of G-men (Government men), fights gangsters (like Al Capone) during prohibition. There are great shots in the film, guys hanging from moving cars, holding onto swinging doors while they shoot up restaurants with Tommy guns. Today we have our own Untouchables. We’ve replaced Tommy guns for computers and trading platforms. We sit in chairs instead of swinging from moving cars. And the killing, well, we’ve traded in the G-men for the G-word: Greed.

What is greed? Wikipedia defines greed as “an excessive desire to possess wealth or goods with the intention to keep it for one’s self.” Probably the operative word here is “excessive”. To investors day trading or night trading, the G-word may as well be 4 letters.

Lets look at how insane greed can be as it affects futures trading, especially emini futures.

Emini futures, just like stocks, trade in price fluctuations, but with futures, price fluctuations are known as ticks. In the world of stocks, one price fluctuation is 1 penny. Generally, 1 tick, 1 price fluctuation, pays out about .50…that’s correct 1 tick. Futures trade in contracts not shares. Investors can easily find futures brokers who allow you to trade for 0 per contract. Stocks trade in multiples of 100 shares. Stocks that have enough volatility to day trade start anywhere from /share to /share and more. Even on the low end, realistically, you need 00. Then when your 100 shares move 1 penny, you make .00. But compare that to trading with emini’s. For 00, you can trade 5 contracts. For each tick movement, you make . So it’s a 60 to 1 ratio, perhaps a bit less, given that the commission for trading futures is a bit higher than stock trading, so call it 50 to 1 ratio.

Want to make 0 a day….make 5 ticks. Watch this. 5 ticks X .50 = .50 x 5 contracts (00) = 2.50. Now take off for commission and say for losses = 5 (give or take). 5/day x 20 days a month is a nice ,500 a month, or just over ,000 a year. Futures are unique when it comes to taxes. They were originally designed for farmers. Over the years, farmers ended up with some very sweet IRS deductions, called the 60/40 split. When you trade futures, 60% of the capital gains is considered long term and 40% is considered short term. At the end of the year, your futures broker sends you a one-liner, a net price, of the amount of wins or losses. It is not itemized by transaction. Since it is a net figure, the IRS can’t tell if you are a farmer or a speculator trading crude oil futures. So everyone enjoys the 60/40 spilt. For taxes, that puts you in about a 20% tax bracket. Since you are trading and that is your business, you can deduct business expenses from that figure (part of your house, your phone, internet, computer, car, etc.) lowering that tax rate to more like 15%. So 15% of ,000 gives you around ,000 spendable a year.

Lets compare that with working 8 hours a day at a job. To make ,000 a year, first of all your job needs to be paying you about / hour. Why? Most Americans pay an overall tax rate (Federal, State, Local, and Withholding) of about 40%. If you make / hour and say work 2,000 hours a year, that comes to ,000. Take off ,000 in taxes, so now you’re at ,000. In order to work, you have commute expenses to deal with. With the price of gas and oil, if you drive 20 miles a day, we’ll there is 1 gallon, so call it /day or 0/month, so there goes 00 just to commute. You’ve got wear and tear on your car, so that will cost another 00 a year. With a ,000 a year job, chances are you can’t be driving some clunker, so that will cost you another 0 a month, so lets take 00. While at work, you’re probably going to have to eat out, add another, conservatively /day (coffee and sandwich), another 00. And of course you need clothes, unless you are fortunate to work in a place that allows you to work in jeans. Add another 00 for that. All in all, say that’s 00 and that’s on the low end, assuming you only use 1 gallon a day, eat cheaply, and buy simple suits. To be on the safe side, say 10k. So for working 8 hours a day, you net around ,000 spendable.

Of course, something must be wrong with this calculation, because the average median income in America is not ,000. It is more in the range of ,000, more like /hour, grossing 0 per day, not spendable.

0 / day spendable is a lot of money. That puts you WAY above normal by about 35%. Just 0 / day. And here’s the best part, to make your 5 ticks, 0 / day, it doesn’t take 8 hours, working bell to bell. You can make those ticks in as little as 15 minutes of trading a day, on the high side, maybe an hour and a half. There is no commuting, no wear and tear on your body, no boss, no clients or customers, no specific time you need to be in the office, etc.

So why are Emini Futures killing investors who are day trading or night trading? Because of the illusive G-word….Greed. We have all seen extreme damages that greed can cause. In 2008, larger brokerages created collateralized debt obligations, packaging and repackaging mortgages until they were trading nothing but air, sending the entire world into financial collapse from which we are still not recovered (job wise or housing wise). The problem for day traders and night traders is not that you can’t make 5 ticks, it is that you can’t stop after you have made them. If you can make 0 in 15 minutes, you tell yourself, well, then I can make 0 in 30 minutes, 0 in an hour, etc. etc. etc. Maybe you can and maybe you can’t. The longer you trade, the more mistakes you are bound to have. People say…I am trading in a zone, I can do no wrong today, and boom…loss. Why? There seems to be a direct relationship between the number of wins and the degree of cockiness: the more wins, the more cocky traders become, the more they trade without their own rules and by the seat of their pants.

Investors who are day trading or night trading beware, lest the swinging doors and Tommy guns get you! By the way, while writing this article, I did one trade, made 0 in 43 seconds, and now I am ready to trade again.

Another advantageous session for E-mini day-traders
Tuesday morning began with strength after the index futures sold off in response to European weakness in premarket trade. Downside gaps filled quickly, but the market had been down even further in early trade, leaving the indices at resistance fairly …
Read more on Futures Magazine

Michelle Lamirande from Farms.com Risk Management provides a weekly update on the crop and grain commodity market news and prices. For more information visit Farms.com www.markets.farms.com
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A NEW LOOK AT DIVERGENCE ON THE SPOOS www.rsksys.com inforsk@comcast.net 303-750-8234 Be sure to subscribe to our videos and comment on them! RSKsys Intl is committed to the ongoing development of consistently profitable Emini trading systems and strategies for the S&P Futures commonly called the Spoos. Our accomplishments thus far have been nothing short of remarkable. This site will give you a glimpse into one of the most robust S&P trading systems to be found anywhere at any price.
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Brazil Rate-Futures Yields Decline on Slowing Growth; Real Falls
17 (Bloomberg) — Yields on most Brazilian interest- rate futures contracts declined after a report showed Latin America's largest economy grew at its slowest pace in two years, bolstering bets the central bank will prolong its cycle of interest-rate …
Read more on BusinessWeek

US STOCKS-Euro zone, technicals unnerve Wall Street
About 2.83 million S&P E-Mini futures contracts traded on Thursday, with nearly 250000 changing hands in an unusually busy 15-minute period when the market fell more than 1 percent. The S&P struggled to break above 1225 in August and September before …
Read more on Reuters

KSE to launch stock index futures contract
KARACHI (APP) – Karachi Stock Exchange will launch Stock Index Futures Contracts (SIFC) on tradable sector indices from January 2012 in oil and gas and banking sectors. According to KSE here Wednesday, oil and gas sector will have four companies namely …
Read more on The Nation, Pakistan

Every Wednesday the US government releases the latest oil inventory numbers and the recent figures have not been good for those speculating on a rise in prices. The weekly Energy Information Administration (EIA) reports have been showing rises in stockpiles.

The most recent report showed that crude oil inventories rose by 0.97m barrels to 358.3m barrels. Gasoline stockpiles also increased, the latest data showed a jump of 1.59m barrels to 226.1m barrels.

Whilst the figures were unexceptional they were unexpected. Financial news agency, Bloomberg had reported that inventory levels had been expected to drop due to the 8 day shutdown of the Enbridge Energy pipeline, ie the pipelines that supplies Canadian oil to Americas Mid-West.

Buy what does this mean for the crude oil markets? According to Simon Denham of Financial Spread, We can see that the irresistible attraction of per barrel seems to be working its magic once again. Following the pattern of the past few years, the November futures contract was higher than October. Once again we can see that long-term sellers are picking up this per month price difference.

In the futures markets, this upward sloping price curve is called a contango and so far in 2010 the contango has given us more than to the bottom line. If you were spread trading with a rolling sell position held since January, you would effectively be short of the crude oil market at . With the price hovering around that would be a good position to have. Although you would need deep pockets to cover the volatility that that crude oil market often experiences.

Looking at the technical indications, at some point crude may break above the / level, having said that, do not hold your breath. As discussed above, inventories remain solid and fuel efficiency is ever improving.

For all of the growth of the world economies over the last 5 years, it is important to realise that oil production has actually fallen and yet there has been no massive strain on prices.

Given that both Brent Crude Oil and US Crude Oil (also known as Light Crude and Nymex) are priced in US dollars any weakness in the dollar will often translate into higher oil prices. And its the current dollar weakness that seems to be supporting the oil futures market.

According to Christopher Beauchamp of IG Markets, The US Federal Reserves Open Market Committee has intimated that Americas slowing inflation and sluggish growth might require further action from the US Government. That action could start as early as November 2010 and would be likely to weaken the dollar.

Although if you are trading the crude oil market note that the next price direction may not be that easy to read. The increase in supply arising from the slowing American economy stands in sharp contrast to robust consumption levels in emerging markets, Chinese demand for oil expanded by 7.6% in August 2010.

Note the spread trading carries a high level of risk and you can lose more than your initial investment. Before trading, please ensure that spread trading matches your investment objectives. Familiarise yourself with the risks that are involved. Seek independent advice if necessary.

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Dow futures are futures contracts that are based on the Dow Jones Industrial Average (DJIA). DJIA is the index of 30 blue chip stocks that are traded on the New York Stock Exchange. Dow index is one of the most famous stock index in the world and everyday if you watch financial news like that on CNBC, you will hear constantly about the performance of the Dow Index that day.

Futures trading is somewhat different than the traditional buy and hold investing. In futures trading you have to constantly monitor the price. if you don’t than you will very soon receive the margin call from your broker. Dow Futures are based on the Dow Jones Index and the value of the Dow futures contract is equal to 10 times the value of the index at a particular point in time.

For example, suppose the Dow Jones Index value is 8500 points. The value of the Dow Futures contract will be ,000.

So Dow futures provide the traders an inbuilt leverage of 10. If you are bullish on the DJIA, you can invest in the Dow Futures. Each point rise in the DJIA will translate into profit for you.

Similarly if you are bearish on the DJIA, you can go short on Dow Futures contract. Again, each point decline in the DJIA index will give you as profit. Unlike stocks, you can go short on futures contract without bothering about the uptick rule as none applies on the futures contract. This makes futures trading far superior for speculative purposes as compared to stock trading.

Now, futures trading is risky and if you are a buy and hold type of investor than you should stay away from futures trading. However, if you have an appetite for risk and can monitor the market constantly than you can profit handsomely from futures.

Other futures contracts that are popular with traders are the S&P futures contract and crude oil futures contracts.

If you are into futures trading than you need to meet High Velocity Market Master, Mark Soberman. He has unique trading methods. He says that he only trades for 20 minutes each day.

www.informedtrades.com The next lesson in our free futures trading course which covers how to add quotes to th platform window.