If you want to get into trading e-mini futures, you probably would like to become a true day trader. Day trading, using the techniques of swing trading, is the way that serious e-mini futures traders make serious profits. The e-mini futures market has enough volatility that the smart way to take part in it is to enter positions that you expect can make you money in less than one day or up to four days. Day trading is simply very short term trading, then.

But there are some key mistakes that new day traders constantly make. You should seek to recognize these common mistakes so that you can avoid them.

One of these key mistakes is averaging down-that is, continuing to buy contracts on underlying assets at lower and lower premiums as the price of those assets gets lower and lower. This may seem like a smart thing to do, but most of the time it’s not, and you should simply close out your weakened position, take a small loss, and begin looking for a new trend. This is because the e-mini market is likely to sustain a lowering trend for longer than you can afford to be in it, and you can lose a lot of money in a hurry this way. When you average down, you’re going long on a losing position, and perhaps even worse than the lost money is your lost time.

The next big mistake that day traders make is attempting to buy into positions in anticipation of financial news, or trading immediately after breaking financial news hits. For instance, positioning on an oil future knowing with nearly 100% certainty that OPEC is going to cut production or that there will be a military flare up in the Middle East that will disrupt shipments, or breaking news that wheat prices have official surged higher. The problem with this is that even if the highly probable news breaks or the headline seems juicy, you really cannot predict the way the market will respond. Even if you’ve found that you’re good at guessing the way that it will respond, you cannot know how long the new trend will last, nor how far it will go. As a day trader, you should be looking to position yourself on trends that already have definitely started, and positioning yourself with respect to tried and true emotionless technique. Your tool of the trade is technical analysis, not fundamental analysis.

Next, you must limit the amount of your capital that you risk with every trade. Depending on your risk tolerance, this will be one percent to five percent. Bigger risks don’t equate with bigger gains, because losses are inevitable. Low risk, high probability trades that don’t lay on the line more than a very small percentage of your capital are what you want.

And finally-don’t have unrealistic expectations. E-mini day trading is fun, exciting, and if done right it can be very profitable, but it’s not a get rich quick scheme, and there’s just no such thing as a day trader who never loses. Consistency in profitable traders over time is the key. May your trading days be blessed!

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