What are emini futures and why do we prefer to trade them!

After smooth sailing in the tech boom of 2000 a lot of day traders found the markets more difficult to extract money out of then they'd anticipated. Some switched to forex, other switched to bonds. Our traders found a huge edge in trading the futures markets. Please read on for more about this very exiting market. There are a plethora of reasons the Chicago Board of Trade's Mini Dow is on fire right now. e-mini index futures have become very popular trading weapons in the past few years.

Futures are an agreement/contract to buy an underlying security or commodity at a fixed price at a "future" date. There are a ton of great advantages to trading futures over stocks including smaller margin requirements. Index futures (almost like a mutual fund or ETF) are made up of a group of stocks traded under one symbol. The Dow E-Mini futures contract (symbol YM) reflects the price action of all the 30 Dow stocks. This investment approach allows the investor to take advantage of changes in the index, without actually buying the individual securities which make up the index. We buy and sell these contracts intra-day and do not hold over night. Thus, you do not ever need to concern yourself with the futures contract expiration date. You trade them just like you would any other normal stock.



Currently, the CBOT's Mini-DOW (YM contract) E-mini futures are the favored pick due to the following reasons . . . .


+ You can day trade without needing $25,000+ in the account! Day trade with an account size of $5,000

+ Tax Reasons + You don't have to list every sale on your return! (for people in the USA)

+ They are always liquid enough. Market orders are instant.

+ Commissions are decent $4/round turn trip on the YM

+ The spreads are never going to be huge like they can get on stocks

+ Focusing on one instrument day in and day out is less complicated and more productive

+ A trader does not have to wake up at 6am and scan for stocks to trade

+ Share size allocation is easier. I trade from 3+ 8 contracts depending on the setup

+ RISK. I've held a stock that plunged 20 pts due to random company event. While econ reports move the futures. It's never been THAT bad!

+ There are always shorts available!

+ Commissions are reasonable (I pay around $4.10/round trip)

+ No up tick rule

+ The $5/tick range of the YM makes for lower slippage(ES, ER too volatile=bad slippage)

+ Bang for the buck. You make 1+ 3 trades a day and can make as much as the multiple stock juggling stock traders do.

+ Less stressful, only need to follow 3 eminis max if you so desire instead keep up with 5+ 10 holdings everyday.

+ Don't have to follow the indices and sectors, eminis ARE the indices. Stocktraders constantly have to follow the cues from the indices to
track their positions. That means more eyes to follow all these charts.

+ Less investment in hardware and software cost. I used to have 3 PCs with 3 monitors, now only 1. They were used for 4 charting services, now 1, another as backup and it's free.

+ NO market makers, no games. No weird fills

+ NO routing decisions to make: "ECN? ARCA? REDBOOK????? "Oh shucks, could have gotten a better fill with ARCA!" Geez, Louise."




There's a reason E-minis are now being called "the most successful product ever launched" Thats not to say the risk is less. Trading in any market can be dangerous if you do not have a good handle on your emotions and the proper equipment.

That's where PureTick is here to help. We provide guidance on setups, psychology, risk management, charting layout, equipment advice and will gladly share what's working for us right now.
Trading is hard enough. We help you swing the odds in your favor. Would you like to see your opponents hand in poker? Well of course that's impossible but we'll show you one of the markets cards and help you stay a step ahead of the newbies aka 'sheep'.

If you've had some success with trading stocks or forex, you should have little issues switching to the futures market. Support, resistance, multiple time frames, overbought & over sold conditions still exist in this market. What you've already learned about technical analysis will apply to these markets.

Welcome!

Also, please read all the posts in the forum for more on Alex's methods.