S&P 500 Emini Futures Trading – Understanding Time Will Help You Make Money Daytrading

As traders we analyze price action, but we tend to forget how important time is to our overall trading success.  This article will discourse some perspectives of time which can be used to trade successfully.

 

The saying “patience is a virtue” is very true in regards to trading. Time is closely related to patience, and patience is essential to successful trading.  Patience is required for entries, exits, length of time in a trade, and for allowing trading opportunities to unfold.

 

The time frame a trader chooses is also important.  This will reflect the personality of the trader.  Traders who necessitate a lot of action will unremarkably trade lower time frames.  Those who trade less, usually move up the time scale. In general, the lower the time frame, the more trading; the higher the time frame, the less trading.

 

Traders can use multiple time frames to set-up a trade.  Trade setups that involve two, or even three, time frames can be useful.  I prefer two time frames because I think it keeps things simpler and a little less complicated.  Better trading decisions can be made by analyzing the market with multiple time frame perspectives.

 

Time frames also contain a mix of information and noise.  The lower the time frame, the more noise that exists in the data.  Trying to separate the noise from the actual information, or the signals that the market is sending, is another describing to trading successfully.  My possessing opinion is that it is easier to analyze the market on higher time frames, because there is less noise in market prices.  Once I have a directional understanding from a higher time frame perspective, I use a lower time frame for my actual entries and exits.

 

Time is also useful to consider as a stop.  I use both a price and a time stop.  Most traders use a price stop, but I wonder how many actually use a time stop?  If a trade does not work out within a certain amount of time, I get out of it–no questions asked.  Why?  Because as traders we need to minimize risks.  When we are in a trade we are exposed to market risk.  The less time we spend in the trade, the less risk we are taking.

 

In addition, winning trades generally work out correcting away and within a certain period of time.  In general, the longer a trade takes to reach its objective, the less the chance of a winner.  This is my general opinion; others may disagree.  My suggestion is to analyze your victorious and losing trades.  Time stamp your entries and exits and go indorsing and staring at how much clock you were in your winning trade compared to the amount of time in the losers?   You may be surprised by what you discover.

 

Time and hope are also closely related.  Many traders, when they are in a losing trade, begin to “hope.”  By analyzing your trading statistics you may notice how much hope you had as your loss was growing.  Get rid of the ego and hope, and get out of the trade if it is not working out within a certain amount of time.  It is as simple as that– if you want to have a chance at trading successfully.  

 

The last concept I would like to discourse is the frequency of trades within negative time periods.  All system traders rely on their trading strategies and trading models.  All system traders also have drawdown periods.  Traders who trade frequently, though, can incur many losses in a very short amount of time; specially if they are trading during market conditions that are unfavorable to their style or strategy of trading. 

 

I too have drawdowns.  These can last a long time and are painful.  But I also avoid many losses that can occur when the market is not favoring my style of trading by trading infrequently and letting time pass.  Markets are ever-changing and have cyclical qualities.  As I allow time to pass, I know the market’s condition will change, and once again become more favorable to my bottom line. 

 

I hope this oblige helped you better understand how time is closely related to trading successfully and if you have any questions please feel free to contact me.

 

 

 

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3 Best Daytrading Emini Ideas for Traders

Emini day trading rules to trade by…

When day trading emini sp 500, most traders start the day hard pressed to initiate a trade even though it may not be the best opportunity to do so. There are many factors to consider before placing the order to enter the market and when trading futures, especially the emini. Most day traders use trading indicators to make their decision. Lets think for a second if instead of looking and trying to make sense of the tradestation indicators or Ninja Trader indicators, we instead begin to analyze price itself as the main focus of how to day trade the eminis.

3 day trading strategies to start your day

 

1. To begin, lets burying about those trading indicators. Once the day session begins everything changing. Traders are entering positions, other traders are exiting from prior day end of day session. What your trading indicators show as may not be what may occur, especially at the beginning of the day (pit) session. The emini trading session begins at 9:30EST and everything changes especially the volatility. The direction of the emini can quickly change from long to short and those esignal, tradestation and even ninja trader indicators will do you more harm then good if they are using data plotted on the globex (pre-market) data.

2. Don’t rush into the market as soon as the day session (pit session) opens. The pressing chaos at the opening bell making for difficult emini trading. Patience does pay off and a clear opportunity will arrive after to enter the market properly. Each trade taken at Daytradetowin clearly shows entries into the market after at least 15 minutes of trading have been established. When learning how to day trade eminis its important to take into account the volatile swings that occur with the opening bell.

3. Practice for free before you trade live! Common sense dictates that before risking any money in the markets a trader must practice first and be confident with what he/she is doing. If you are using E-signal, or Tradestation you may be paying a fee each month for your charting software. I would like to suggest a free alternative, Ninja Trader charting platform. Ninja Trader 6.5 or the new Ninja Trader 7 are both free to practice and include live data. The best way to understand and test your methods is not by historical charting but live. Ninja Trader charting platform has the ability for market replay included free in simulation mode.

 

John Paul at http://Daytradetowin.com has been trading the futures, stocks and Forex markets and leading traders into price action mentorship trading. if you need further information contact daytradetowin at support@daytradetowin.com

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Three Reasons Not to Rush into E-Mini Day Trading

It seems there is a chorus of marketers hawking a variety of Forex and e-mini day trading programs on the Internet. There are promises of fast cash, 1000% returns, and guaranteed methods of trading. Nothing could be farther from the truth. Learning to trade is a skill, much like the skill placed required for any job. This skill set is not acquired instantly from reading an e-book or buying a trading course. This is not to say that buying a trading course is a bad idea, in fact, it’s a great idea. But to trade effectively you need to give yourself some time to larning trading methodology, market psychology and acclimate yourself to the trading environment.

I encourage everyone to learn e-mini day trading, but I caution against running headlong into the market place with expectations that are not realistic. The first few months of trading can be disastrous without proper preparation and experience.

1. Most Novice Traders Tend to over Trade.

When considering an e-mini day trading opportunity it is important to weigh a number of factors and assess the probability of the trade being successful. Relying on rote oscillator signals or similar rate of change indicators without fully assessing the price action in the e-mini contract being traded is the recipe for failure. It is important to firmly understand the current trend in the market and the size of your e-mini futures account before entering any trade.

I regularly see new traders taking 10 to 15 trades a day. Rarely are there are this many trading opportunities during a trading session. Experience has taught me that there are 5 to 8 good trading setups each day, sometimes less.  Why do novice traders lean to over trade?

A distinctive reason for over trading is “tracking the market.” New traders run to pile into trades belated, normally simply-in-time for the guiding movement of the market to change. There are a variety of reasons unexampled traders incline to chase the market, for the most mutual reason for this phenomenon is taking every single trade signalled by an oscillator or indicator. It is significant to use a multi-wandered system to filter your trades in a manner that eliminates some of lower probability trades. Trade filtrating is one of the most significant components of any trading system. Some trading systems use trending markets and agreement between several indicators to bespeak a trade. There are many filtrating systems on the market and all full trading programs filter trades in some manner.

2. Most Novice Traders Tend to Trade to Many Contracts

Money management in your e-mini futures trading account is the skill that will enable traders to remain in the market for an extended period of time. On the other hand, trading the maximum number of contracts your account is authorized to trade (by the brokerage margin department) is a mistake.

A good rule of thumb for sizing the number of contracts in a potential trade is to never trade more than 5% of your e-mini trading account balance. For many smaller accounts, this will mean trading only one contract. Emotionally, trading a mere one contract is a difficult task, especially when the new trader has purchased a program that has conditioned his or her thinking to get-rich-quick. Because the margin department has authorized you to trade up to 5 contracts doesn’t mean it’s a good idea to do so.

Why?

Should you go on a run of losing trades, save 4 in a row, you can easily lose 60 to 70% of your e-mini trading account balance. Needless to say, this is a less than desirable outcome. In my opinion, most traders trade to many contracts because they have been conditioned to believe their trading system is infallible and all they need to do is follow the system and riches will come pouring their way. As I said earlier, 5 to 7% of your account balance is the maximum you should risk on any given trade.

3. Most Traders Are Not Familiar with the Psychological Factors in Trading.

I like for my first trade to be successful because it puts me in the right frame of mind. Of course, there are days when you might be stopped out on your first trade and find yourself with a significant negative profit/loss position. At this point, it is not unusual for novice traders to over trade or trade too many contracts in order to catch up.

Regardless of the day’s prior trades, is essential to maintain your trading methodology and money management system. There is always a temptation when you are having a losing day to up the number of contracts in an effort to regain your footing in positive territory. This is always a bad idea. Traders also tend to increase their risk tolerance by initiating lower probability trades when they are having a losing day.

It is essential to trade your account, not let your account trade you. It is entirely possible to salvage a day after an initial losing trade. To be sure, you are more likely to produce positive results when you stay true to your system. Negative account balances for a trading session are notorious for compounding problems. You can easily turn a modest loss and to disaster by trading outside the parameters of your e-mini day trading system.

In summary, we have discussed the importance of staying true to your system and not letting outside factors put you in the market before you are ready; over trading, poor money management, and unfamiliar psychological feelings all contribute to trader failure. In short, be fully prepared to trade before you begin trading in earnest; there is no need to rush into e-mini day trading before you are ready.

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