What is a futures contract?
Futures contracts can sound confusing for new traders.  To explain what a futures contract is, I like to use the analogy of a home purchase contract.  When you buy a home, you first sign a contract that lays our the purchase price, property specs, and other information pertaining to the sale.  Then, 30 or 40 days later, you “take delivery” or actually close on the house by paying the seller and taking ownership of the property.  Futures operate in the same way.  Except we’re not holding the contract for 30 days.  Actually, sometimes we’re only holding the contract for 10-30 minutes!

What are E-minis?
E-minis are also known as “stock index futures” that are traded 100% electronically (not in a trading pit on an exchange).  The benefit to this is you have access to all the same information as everyone else.  A stock index is simply and index (or group) of stocks).  For example, the S&P 500 is an index of 500 stocks.  There is a futures contract based on the S&P 500.  The “mini” means it’s 1/5 the size of the standard futures contract traded in Chicago.

The S&P 500 E-mini
The E-mini S&P 500 is one of the most popular e-mini indexes with professional traders.  The reason is because the ES (e-mini S&P 500) has very high volume and volatility.  These are a traders two best friends, because movement (volatility), and a lot of market participants (volume), means big opportunity for traders.  Also, the e-minis markets are highly leveraged, which is a great thing if you know what you’re doing, but can be very dangerous for traders without a winning strategy.

“Shorting the markets”
Typically, people thing of making money in the market when price goes up, right?  Just like buying low and selling high.  You can also make money when the market goes down.  This is called “shorting” the market.  You’re essentially selling something that you don’t yet own, then buying it back at a lower price.   It is very easy and simple to short the e-minis markets.  Other markets, such as the stock market, have had restrictions on short-selling, which can be a huge problem for traders.

Tools Of The Trade
With recent advances in technology, we (individual traders) now have access to the same tools and information as the professional traders at the trading floor.  You can literally trade from anywhere in the world with an internet connection, and be on a completely level playing field with everyone else trading the same market.  All you need to become a professional e-mini trader is an off-the-shelf computer, high-speed internet connection, and a desire to succeed.  We set all of our members up with the charting, data feeds, and education tools needed to trade the markets.

Getting started
The E-mini markets are often referred to as “the professionals’ market”.  The high leverage and volatility makes it appealing to traders, but novice traders with little or no trading have a good chance of losing money.  At the Emini Academy, we show you the proper way to trade the markets for consistent profits.  There is a lot of misinformation on the web, and we’re setting out to revolutionize the way traders learn to trade E-minis.  Feel free to join us for free and get started on your path to financial freedom!

Emini Trading Articles:

Emini Day Trading Basics
Emini Trading – A brief history and overview
How to Becomes a Professional Trader
Tips and Advice for Search For an Online Trading Course
Emini Academy FAQ’s
Are You a Confident Trader?
Day Trading with the MACD indicator
How To Find a Good Emini Broker

If you’re trading e-mini futures, then you’ll more than likely end up paying a flat commission per contract traded.  Basically, you will pay a commission to your broker for each contract traded, regardless of how many contracts you trade at a time.  If your broker is charging $2.00 per side, then you’d end up paying $4.00 for every “round turn”.

For example, if you bought 20 emini Dow contracts you would end up paying $2.00 per contract, or $40.00 total.  When you liquidate (or sell) your 20 contracts, you’ll pay another $40.00.  Thus, your total brokerage commission would be $80 round turn for 20 contracts.

Margin: When daytrading futures, you will be trading on “margin”.  Essentially, you’re not investing money into a company.  Rather, with e-minis you are trading contracts that require some sort of deposit.  Your broker doesn’t take the margin money out of your account.  Instead, they make sure you have enough margin money in your account to support the amount of contracts your trading.

For example, let’s assume your brokers minimum margin requirement is $1,000 per S&P 500 e-mini contract.  If you were trading 10 contracts, then you would be required to keep a minimum of $10,000 (10 contracts x $1,000) in your account at all times.  If your account ever dips below the minimum margin requirement, then your broker can liquidate your position without notice.  After all, if you don’t have enough money to cover your position, then the broker is required to provide the funds to the Chicago Board of Trade.

Data Feed: If you’re intra-day trading futures, stocks, or any other kind of equity, then you must have a real-time data feed.  Some brokers provide delayed feeds, but you need real-time data from the exchange.  Believe it or not, not all data feeds are created equally.

A lot of professional traders use tick charts which measure the amount of transactions, not time.  And to accurately utilize tick charts, you need to have what we refer to as an “unbundled data feed”.  This means that you’re counting each and every transactions.  Some data feed providers will bundle data, or group trades together.

For example, a bundled data feed could show 1 transaction of 10 contracts, but in reality there are 10 transactions of 1 contract each.  If you were to compare two tick charts side-by-side, then you would see a significant difference.

Service: In today’s day in age people demand great service.  And it’s no different when choosing an e-mini broker.  You should have access to the trade desk where you can call in orders if needed.  Let’s say your internet connection goes out and you can’t close out your trade.  You’d need to be able to get your broker on the phone immediately to close out your position.

To sum it up, a good emini broker will provide competitive commissions, reasonable margins, a fast and reliable data feed, and great service.  If you need a recommendation for our preferred brokers, feel free to call or email my team directly.

“A fundamental idea in finance is the relationship between risk and return. The greater the amount of risk that an investor is willing to take on, the greater the potential return. The reason for this is that investors need to be compensated for taking on additional risk. ”

In other words, risk is the amount of capital you’re investing, and the amount of money you’re willing to lose in order to earn a return on your initial investment capital.  If you enter into a position without a stop loss, then your risk would be the total amount of money invested.  However, if you implement a protective stop, then your risk could be measured by the amount of money you could potentially lose if the market moved to the price in which your stop is standing.

Now that you understand what trading risk is, let’s take a look at the different ways traders look to manage their risk.  As I mentioned earlier, using a protective stop is a widely understood way to cut your losses short.  Not only can you protect yourself if the market goes down when you’re in a long position, but you can use buy stop losses if you’re short the market.

Getting in a trade that doesn’t hit your stop is just half of the equation.  Beyond that, you need to define when you’ll take profit.  It’s possible to get into a good trade, but not take profit at the right moment, which could turn a winning trade into a losing trade.  Traders use profit targets in many different ways.  Some traders use automated profit target orders, while others use trailing stops or some other strategy to lock in profits.

This last way of managing risk is misunderstood by many traders.  Position sizing means controlling your risk through managing the size of your investment.  Let’s look at an example:  You typically trade ten contracts on the S&P 500 E-mini futures contract with a hard stop of 2 points, or $100 per contract.  If your trade hits the stop on a full load of contracts, then you’re loss before commissions would be $1,000.  But let’s say instead of getting in with 10 contracts at one time, you decide to put on 5 contracts with a 4 point stop.  What would your loss be if the trade went against you in that scenario?  Well, $50 per point x 4 points equals $200 per contract.  If we’re trading with 5 contracts, that would mean we’d have a net loss of $1,000; the same as the first scenario.

So why would a trader want to trade with less contracts and more risk?    The benefit to scenario #2 is that you can get into a position with less risk on the table initially, let the trade develop further, then decide if you want to place more contracts on the table.  As you scale into your position, you could reduce or eliminate the risk as the trade moves in your favor.  By using this tactic, you are essentially increasing your winning potential while simultaniously reducing your stop size.  In other words, you’re increasing your chance of winning, stacking more chips on the table, and reducing the risk all at the same time!

Managing risk through position sizing is fairly simple, but takes practice to develop a plan that is consistently profitable.  Scaling in and out of trades can help put the odds in your favor and reduce risk, but it is not a substitute for a solid technical trading strategy and discipline.  You must combine a trading system that gives you an edge in the market, with a pre-determine risk management plan that gives you a positive expectancy.

There are many ways to manage risk.  No matter what form of technical analysis or risk mangement techniques you use, it’s vital that you stick to a plan that fits your own personaility and risk tolerance.  You can try an immulate other traders, but ultimately you’ll do best with something that’s inline with what’s comfortable to you!

Stay profitable,

Chris Dunn

Since emini futures are based on a stock index, the movement isn’t tied to one company.  This means traders don’t need to focus on hundreds of individual companies.  Rather, they can focus on the market as a whole, or a stock index like the S&P 500, NASDAQ, or Russell 2000.  The popularity of e-mini trading is due in part to the volatility and liquidity sustained throughout most of the trading day.  Unlike individual stocks, the indices tend to have a large trading range with many market participants.  For professional traders, this means more opportunity.

With e-minis, you trade for points.  In the S&P 500, each point is worth $50.  There are 4 “ticks” per point, which are valued at $12.50 each.  Let’s say you make 3 points on the ES.  That would be a $150 profit.  You could also trade more than 1 futures contract.  If you were trading 10 contracts, that 3 point profit would become $1,500.  By trading multiple contracts, you’re able to leverage your time and efforts.  Of course, we recommend discipline and proper risk management structure.  A lot of traders learn the basics of e-mini trading, but never fully grasp the many other important factors to successfully trading e-minis.

If you’re looking to learn how to day trade e-minis, we recommend taking a look at our MAP Mastery Program.  In this intense coaching program, we show you the same strategies we use to trade every day.  This is more than just a simple day trading course.  It’s actually a full-service, proven training program that will work with you personally to help you become a consistently profitable trader.

There are a lot of choices when looking for day trading training and education. As a long-time professional trader, I’ve been through nearly everything available in the form of learning how to day trade e-minis.  I’ve gone through online trading courses, invested in trading systems, and gotten personal coaching. Here are a couple of key points to keep in mind when looking for a reputable day trading course:

1) Is the day trading course just recycled information, or do they provide proprietary trading strategies? There are many sources online to find useful trading information. You can find everything from the basics of e-minis, to technical analysis concepts. The problem is that many courses just recycle outdated information that may or may not work in today’s market. When looking for a valuable training program, make sure to investigate to find out if what they’re selling is useful information that can help you earn daily income in today’s market.

2) Are they just looking to sell you an over-hyped “black-box” trading system? You may have seen advertisements for “trading robots” or systems that promise to make you a million dollars without you doing anything. The truth is, many of these systems just don’t work. If it sounds too good to be true, it probably is. If you don’t understand the aspects of the trading strategy, then ask if they have an introduction course that can teach you about the system before you buy it.

3) Find out what support is offered in their trading course. Many courses you buy come with some kind of support. Ask the education company what they do to help you develop your skill after you go through the training material. Many people will lead you to believe that you can read their course, or watch their DVD’s and start making money in the stock market right away. For a lot of traders, that’s just not the case. For example, we provide live trading and personal coaching for all of our MAP Mastery students.

It’s very important that you do your due diligence when researching different programs. Also, make sure the educator actually trades. There are many people who teach who don’t trade at all! At the Emini Academy, we provide top-level education and training for traders at all levels of experience.

For example, here’s a few benefits to our day trading course:

- We guide our students through a step-by-step curriculum that can be learned in the most effective and efficient way
- You’ll get access to an extensive trading video library with lessons tied to our training curriculum
- All course material is designed to help you transition into the live market to start developing your skill as a professional trader
- We offer lifetime free updates for all our students. As the market changes, you’ll always have the latest information
- Daily updates and education is provided through our market recap videos, blog posts, and personal trade reviews.
- You’ll get one-on-one critiques from our professional traders.

For more information, check out our MAP Mastery Program and give us a call at 800-788-1658 to get started!

As you may already know, trading offers an income and freedom opportunity unparalleled to any other business.  What other business allows you to work just 90 minutes a day?  Furthermore, you don’t need a boss, employees, or customers.  The overhead is very small, and with technology advancing all over the world, you can trade from anywhere with a high speed internet connection.  If trading is such a great opportunity, then why are so many traders failing at this business?  Here are some tips that can help you on your journey to becoming a pro trader!

Professional Trader Tip #1 – Use a trading strategy that gives you a positive expectancy.  For some, this is common knowledge.  Others might not yet know the meaning of a “positive expectancy”.  Basically, you’re looking for whatever analysis you’re using to make decisions, to give you an expectancy to profit over time.  It doesn’t matter if you’re using technical analysis, fundamental analysis, automated strategies, or discretionary trading; The only way to show a positive expectancy is by using the same trading strategies every time.  Here’s what I mean… you need to have defined rules for trades, entries, and exits.  Without defined rules, you’re essentially guessing, which can make it very difficult to see consistency in your results.

Professional Trader Tip #2 – Employ a solid risk management structure that evaluates these three components: stop sizes, position sizing, and profit targets.  If you can lay out your risk plan before trading the market, you can remove a lot of the psychological weight that comes from the fear of losing money.  If you know the maximum amount of money you’ll ever lose on  a trade, then you won’t worry if any given trade is going to win or not.  If you have a high win ratio and reward-to-risk ratio, then your positive expectancy will give you the confidence to trade without second-guessing.

Professional Trader Tip #3 – Do what’s comfortable for you!  I see a lot of new traders trying to immulate what other professional traders are doing.  This is fine so long as the new trader is trading in a way that’s comfortable for his own personaility and risk tolerance.  Blindly following another trader’s style is a dangerous and unprofitable way to trade the markets.  Here’s why… Say I have a risk plan that doesn’t sit well with your own risk tolerance.  Even if I make money with that plan, if you’re not comfortable with it, then you probably won’t stick to the rules.  So, you must find out who you are as a trader, then execute on your own style that’s in line with your personality.

While these three tips can help you become a professional, there is a lot more involved to earn the right to make the big bucks.  For more information on the Emini Academy’s training, visit Our Emini Trading Blog for more free information, or give us a call at 800-788-1658.

I wish you much success,

Chris Dunn