So you want to make money from trading the E-minis? Well hop on board. Join the masses. Ha ha just kidding. Ever since the explosion of the E-mini contract, it seems like everybody wants to start trading and making fortunes in the E-mini’s.In the beginning the majority of the people interested in trading and investing pretty much just stuck with the basic stocks. Very few retail investors tackled the unknown S&P cash contract ($250 a point). And then the CME introduced the E-mini S&P futures contract on September 9, 1997. Now each point in the S&P would be worth $50. This made it much more accessible and attractive to small traders. How attractive? The E-mini S&P quickly became the most popular equity index futures contract in the world.
After this explosion in popularity, of course, every day trading guru came out of the woodwork selling his or her course on how to day trade be S&P E-mini contract. Since then of course, the E-mini Dow in the E-mini NASDAQ also joined in. Now of course the futures market has a multitude of instruments to choose from and with the cost of brokerage commissions and margin requirements so low, it’s popularity is growing by leaps and bounds.
Even though there are so many instruments to choose from in the futures market, the clear leader still remains the S&P E-mini. With one of the smallest margin requirements ($500 per contract). And the ability to scale as high as you want (some people or firms trading 1,000’s of contracts at a time).
So how do I make money in the S&P E-mini market.
• First, find yourself a good mentor. Now this could be a daunting task, because there’s so many of them. Do your due diligence and find a good one. Make sure the mentor is reputable. Can be easily contacted. Has other members or students that you can speak to as referrals. And most important, offers some type of free trial. If they’re not willing to show you that they can do what they teach, then why should you follow them? Also very important tip: don’t ever look at price. I know this may sound weird. But if you can’t afford proper education, then you probably can’t afford to trade right now. When looking for proper trading education, look for value, experience, and transparency. Not discounts. This is from experience.
• Second, find yourself a good platform. There are a couple out there. Like ninja trader, Sierra charts, trade station, just to name a few. They all pretty much offer free trials so you get a feel for them.
• Third, if you don’t already have, get yourself a good computer and fast Internet connection. Again don’t go cheap on this. If the cheapest Internet package in your area as $19.95 and the fastest and best package is $49.95, don’t even take a second thought go with the $49.95. Again, if $30 a month is going to get in the way of whether you want to be a trader or not, then you are not ready to trade.
• Fourth, find yourself a good broker. Again do not go cheap on this. Most brokers are pretty competitive. Usually between $3 - $7 per round turn. Again, don’t go cheap on this at the risk of sacrificing execution. You want to know that your trades are getting filled and that your broker can be contacted at any time if there’s a problem. The few extra dollars is worth your peace of mind.
• And last, practice, practice, practice, practice, practice . . . . Oh and did I mention practice. With a demo account now in pretty much any of the platforms you can do what’s called simulated trading. Granted it’s not the same as live, but all of your trading is done in real time. If someone says you should Sim trade for at least 3 to 4 weeks, you should Sim at least 3 to 4 months. There are people out there that will Sim for 1 to 2 years. Don’t rush this process. Remember the market is not going anywhere. It will be right here when you’re ready to trade. If this is not done properly you can get frustrated and lose everything very fast. But if you take your time and do it right, set up the foundation, the rewards will be quite substantial based on the efforts placed by you.
Online day trading is an amazing business with extremely lucrative possibilities. And one of the most profitable is the S&P E-mini contract if done properly.
Please take the steps to properly educate yourself on trading the S&P E-mini contract. You’ll be very thankful you did in the end.
Hope you enjoyed this article. Good luck and happy trading.Dimitri