Day Trade Emini S&P 500 NASDAQ 100

5 Minutes Chart

15 Minutes Chart

Hi,
The market is in a slightly uptreding environment when viewed on the 5 minutes chart. But I would rather classify it as a ranging market. This is evident if you look at the 15 minutes chart. But because it is slight uptrending, it is rather dangerous to go short, Emini can rebound heavily once it hits the Moving Averages ( MA). My stratetgy for this kind of market condition is to go long when price hits the MA. I executed 2 trades for the day, one around 12pm and another at around 3pm. The first trade at 12 pm, I entered a second contract when price moved 2 points in my favor and exited on a profit taking limit order at 1728. The second trade did not turn out as well, but I was lucky to remain profitable with $70.

Posted by Michael Taylor at 5:31 PM | Permalink | Comments (0) | TrackBacks (0)

Paper trading refers to trading with virtual money, you do not use real money. You jot down in your notebook when you bought at what price and why. When you sell, you record in your notebook again why you sold and calculate the profit or loss associated with the trade.

If you cannot make money by paper trading, you can forget about making money in real trading. Always test a new trading idea with paper trading first before using real money. Also start with paper trading after a long period of break, to help you get back in touch with trading.

Although there is very little difference between paper trading and real trading in Emini, real trading is subjected to slippage and psychological factors come into play when you are using real money. Do not underestimate the impact of psychological factors on your trading. After you have a reasonable method and money management techniques, it is the psychological factors which will determine whether you make a profit or loss.

Some traders have created software to paper trade. You push the buttons like you are doing real trading but only virtual money is involved and no real cash is used. The system will record down the time, price, symbol and the position opened or closed. This saves you the trouble of keeping a paper record.

Posted by Michael Taylor at 11:11 AM | Permalink | Comments (0) | TrackBacks (0)

Fundamental Analysis
Fundamental analysis is a methodology for analysis of a company as a viable stock that you want to hold for long term. Fundamental analysis is more widespread in the world of investing since you are going to hold your companies for 10 to 20 years, you do not wish that your companies go bankrupt the next day. Some of the common ratios used are P/E ratios (price earnings ratios) which measures the relative price of the stock to the earnings of the company, the EPS (earnings per share), the debt equity ratio and tons of other ratios.

Although I have spent considerable time studying such ratios I discovered that you do not really need such information to be successful in day trading. I repeat, fundamental analysis plays a marginal role in day trading. In fact, most of the time, I don't follow it at all. If you still have reservations about ignoring fundamental analysis, I recommend trading ETFs (exchange traded funds) such as QQQQ which mirrors the movement of the NASDAQ 100. In essence, you are actually trading the index like a normal stock. Indexes usually have a huge number of stocks in them, making them less susceptible to company specific news. However if you are paranoid, then you might still want to follow the news of the major companies in the index.

here is no lack of information and no end to analysis. Knowing the fundamentals might seem cool when you discuss company so and so over a cocktail party, but it will not help you rip money off Wall Street in day trading. Being able to remove fundamental analysis from the decision making process is also one of the reasons why I recommend trading Emini index futures.

Posted by Michael Taylor at 11:08 AM | Permalink | Comments (0) | TrackBacks (0)

How's your trading going? The market sure is tough recently eh?
You might be wondering why I trade only 1 contract recently. Reason ---> it is a ranging market! There is no real trend. It's simply not worth the risk to trade so many lots when market direction is unclear. Price went down heavily in a 17point move. I missed the boat and I didn't want to chase the price down. Furthermore, I didn't know how far this decline will go. Remember PATIENCE, basically this is a ranging market and experience tells me that price will rebound right up after a sharp fall. I resisted the temptation to short.... I waited for it to rebound and entered! Take note of the support line drawn at 1681.5. This is the support line which I drawn from the lows of these few days. I placed my stop loss there. However, I did not set a price target, although mentally I was telling myself it should be somewhere around 1696. Yup, price did went up to 1696 and dropped a little, I exited on the first sight of weakness at 1695.5. Not a bad trade at all in this market condition. A $170 profit.

Posted by Michael Taylor at 4:22 PM | Permalink | Comments (2) | TrackBacks (0)

Hi, how's your trading? Market condition is not very good as it enters a new phase of undecisiveness. I would recommend most novice traders to stay of of the market. But if you really must enter, play short instead of long. The market is still very much affected by the big decline last Friday and it would be unwise to go against this trend. You might be asking why I only sold 1 contract. The reason? From experience, this market is not a trending market and we can always expect some pullback from a huge decline. You have to be extremely cautious in this kind of market situation. In fact I was prepared to get out on the first sign of weakness.

Posted by Michael Taylor at 4:40 PM | Permalink | Comments (0) | TrackBacks (0)

The minimum needed to open an account for trading the Emini Futures ( S&P 500 and Nasdaq 100 ) is $2000. This amount is imposed by the brokerage.
However, this amount would only allow you to trade 1 lot. In my experience, trading one lot makes sense when you are a novice trader, experimenting with new methods. However, it is simply not cost effective to trade just one lot. Usually you would want to load the boat when you are winning ( buy or sell more lots when the market is moving in your favor). I would recommend a minimum of $5000 trading capital to start with.

Posted by Michael Taylor at 8:23 AM | Permalink | Comments (0) | TrackBacks (0)

Hi,

A very common question I encounter is what are the symbols for the emini futures?
The symbols changes every quarterly. You can find the details in this article : Emini S&P 500 symbols

Posted by Michael Taylor at 8:16 AM | Permalink | Comments (0) | TrackBacks (0)

There is a distinct difference between day trading and investing. The main difference is the time frame and methodology used. Investing requires a much longer time frame than trading, from months to years to decades. Usually you want to select a good company that will not go bankrupt the next day you purchase it. You will also want to analyze the fundamentals of the companies, make sure it is in good financial health and has a competitive advantage relative to other companies in the industry.

Trading takes a different approach to making money. The time frame considered is short from a few minutes to hours to days, weeks or maybe a month. Specifically, day trading refers to strictly trading within the day. This means that you do not hold positions overnight. For example, if you buy at 10:00 (EST), you have to sell before 16:15(EST) when the market closes.

There are no rules against holding overnight but risk is minimized if trading is strictly restricted to within the day. The market often moves in reaction to news when exchanges are closed. Stocks usually do not have much liquidity and trade on light volume after market hours. Imagine what would happen to your long position when there is a sudden hurricane strike when market is closed. The market will drop but you might not be able to sell at a reasonable price due to low volume. I sleep better at night when I know have no open positions overnight. Whatever losses and winnings are strictly during market hours when there is enough volume to trade. How the market moves after the closing bell does not affect me and I start the next day with a new state of mind.

Posted by Michael Taylor at 8:05 AM | Permalink | Comments (0) | TrackBacks (0)

Hi,

Most of you must be wondering what happened to me the last few days. I was down with fever and decided to take a one week break. Well, apparently, I missed out on some of the market action, especially on Friday when Nasdaq and Dow declined heavily. Oil prices increased again and there was tension in IRAQ and threats issued by USAMA BIN LADEN.... these are what analysts reports say, but remember, if you are monitoring the market and it starts trending in a particular direction, whether up or down very strongly, you can be quite sure that there are some fundamentals behind the movement. But, DON'T spend time trying to find out what made the markets move. Seize this window of opportunity before it ends. You can always find out the reason; after you have made the profit!

You can say that the opportunity cost of me being sick at this untimely week is at least $2000. Hey, but what's money if you don't have the health to enjoy it? And, day trading is suppose to give me the freedom to do what I want and when I want it, not impose restrictions on me taking medical leave.. Novice traders ---> remember this golden rule: Opportunity is always there, the market will still be there waiting for you tomorrow. It doesn't bother me to lose that opportunity to earn $2000 from the Emini Futures. What matters is that I have fully recovered from fever and all ready to go!

Posted by Michael Taylor at 10:15 PM | Permalink | Comments (0) | TrackBacks (0)

Hi,

Recently one of my readers has brought to my notice that the Emini Start Up Kit ( Free News letter ) is not working. I had my tech guy fixed it. Its should be working fine now. Note: Our primary business is in day trading Emini Futures. We do not rent or sell your email addresses and You can opt-out anytime you like.

Here's what installed for you in the FREE newsletter!

Chapter 1
What is day Trading?
Day Trading VS Investing.

Chapter 2
What are Index Futures?
What is EMINI?
Symbols for the S&P 500 and NASDAQ 100

Chapter 3
Hardware for daytrading the EMINI.
Software for daytrading the EMINI.

Chapter 4
Fundamental Analysis
Paper Trading
Types of orders

Chapter 5
Technical Analysis: Your first step in daytrading
Candlestick Body Length

Chapter 6
Candlestick Shadows
Signs of Reversals: Doji candlesticks
Hammers and Shooting Stars

Posted by Michael Taylor at 6:00 AM | Permalink | Comments (0) | TrackBacks (0)

Have you heard of day traders? These are people who reap profits from Wall Street day in day out. They do nothing but trade, they answer to no one but themselves. Day trading is their livelihood, their bread and butter. Day trading is profit driven. If you have aims other than making money from the markets, you have probably come to the wrong site. This is not a site for gamblers who seek short term thrills in the markets, nor is it meant to be a theorectical exposition on day trading for academic researchers.

Why day trade? Is it worth the effort? Day trading offers the road to financial freedom. The day trader is independent. He is free from the office routine, not restraint by time or place, he works when and where he fancies. This is the power of day trading!

What does it takes? You don't need to be extremely smart to be successful in day trading. The most successful day traders are those who have the iron-resolve and solid discipline. Intelligence is certainly welcomed, but is not an essential criterion for success. I was never the top in my class and always scrapped through my exams. SO WHAT? I am making big bucks by just trading a few hours per day.

Don't get me wrong, I am not profitable from day one. This site does not offer another get rich fast campaign. It took me almost four years of daily trading to reach where I am now. Constantly revising and researching on various methods finally paid off. It is hard work and you are not going to get any richer just by just reading and not practicing. Can you drive a car just by reading the manual? You have to practice what you learn. I hope you can learn something from this site to jumpstart your trading.

Posted by Michael Taylor at 2:07 AM | Permalink | Comments (0) | TrackBacks (0)

Dear Trader,

I have added news feed ( RSS, ATOM and RSD) to my Emini Trading Blog. Now you can use your favourite news reader to subscribe to my site at http://www.daytradeemini.com/blog

Posted by Michael Taylor at 10:25 PM | Permalink | Comments (0) | TrackBacks (0)

Future contracts originate from commodity trading. A future contract is an obligation to buy/sell a certain quantity of commodity at a specific date for a specific price determined at the outset of the contract. Future contracts are frequently used for hedging risks and also for speculation.

For example, with the recent hike in oil prices, an airline company which uses a lot of fuel might want to hedge it's exposure to oil prices through the purchase of oil futures. If the price of oil is $60 now and is expected to go up to $70 within 3 months, the airline would hedge its exposure by purchasing the 3 month future contracts so long as the agreed price is less than $70.

Oil prices now $60
Expected oil price in 3 mth's time (by airline) $70
Price of 3 mth oil contract (by oil producer) $68
Actual price 3 mths later $65

Let's assume the airline can find an oil producer willing to sell oil 3 month later for $68, the company would enter a futures agreement with this oil producer for delivery of a certain quantity of oil in 3 month's time. If the price of oil falls to $65, the airline still has to purchase at the agreed price of $68. But what propelled the airline to enter the futures contract in the first place is its expectations of future oil prices going up to $70 in 3 months and buying at a price below $70 (3 months later) seemed reasonable to the company.

Index futures are cash settled, there is no physical delivery of commodity as in the case of wheat, corn, etc. Although index futures can also be held for the long term, the time span we are concentrating on is a day. We are using the index futures as a vehicle for speculation and not for hedging as in the case of the airline company.

Posted by Michael Taylor at 6:28 AM | Permalink | Comments (0) | TrackBacks (0)

Hi, the market has been ranging for these few days and there are not many economic news announcements. I would say the market is in a very slight downward bias now. Friday, the last day of this trading week was no better and I was reluctant to take any heavy positions. One way to trade ranging markets is to wait for price to hit the Moving averages and a downward confirmation with a 2 point candlestick ( as show in circle on figure). I shorted 1 lot to test the market. At the same time I placed my stop loss and profit target orders immediately ( as shown by the 2 green bands ). I was prepared to take a loss if price went up suddenly. The market was erratic and there was no way to tell which way it will go. Price of the Nasdaq 100 Emini Futures dropped further to 1757.5 and I shorted another contract. When it hit 1753.5, my profit target was automatically hit and I exited the trade. This trade lasted almost an hour... not an easy trade at all. I could have been whipsawed out of my stop loss anytime.

Posted by Michael Taylor at 3:02 PM | Permalink | Comments (0) | TrackBacks (0)

E-min NASDAQ 100 opened and started to move down towards the Moving averages, normally we would expect a rebound when price hits the moving averages since we are still in an uptrend environment, albeit a gentle one. Indeed price did bounce up as shown in the circle ( refer to figure). This was my entry point. The trade lasted for around half an hour, with my maximum paper profit being $30 and maximum paper loss of $40. At 10:21, I decided that price is not going anyway judging from the movements of the 5 minute candlestick charts. It is most probably going to be a ranging market today and I exited my position with a loss of $20.

Posted by Michael Taylor at 10:36 AM | Permalink | Comments (0) | TrackBacks (0)

Having a stable computer system is crucial to your trading success. Imagine what would happen if your computer hangs in the middle of a trade. What happens if you suddenly get disconnected from the internet? Accidents do occur and these scenarios are very possible, I have encountered an internet disconnection while trading. Such scenarios are potentially lethal to your trading especially when the market can move against you in a couple of minutes in the case of day trading.

Besides making sure that our equipment is up-to-date and reliable, care must also be given to the planning of a backup system. For example, I have 2 internet connections just in case one fails and I always have my laptop on standby should my PC hang in the middle of a trade. This section covers the necessary precautions and minimum set up you need to start trading. It is important to remind ourselves that making money through trading is our ultimate aim. It is easy to fall into the trap of delaying setting up your trading system because you want to fine tune your computer system. Have the basic reliable set up and get ready to go!

Although there are no hard and fast rules to your hardware configuration, I recommend the following minimum configuration.

CPU : at least 1GHz
Memory RAM : at least 512MB ( charting software is memory intensive)
Monitors at least two 17 inch XVGA monitors (resolution of 1280 X 1024)
Graphics Card Any graphics card capable to support 2 monitors, usually one monitor will be connected via analog cable and the other monitor connected via digital cable. Hence it is important that one of your monitors support digital output.
Internet Connection Cable or ADSL, try not to connect trough wireless since wireless connections are prone to instability.

A minimum of 2 high quality monitors is needed in order to display all the charts and order management screens. If you only have one screen, you might ALT-TAB in windows to switch between the different applications, however, there is not really much reaction time when the market is moving and I strongly recommend have at least 2 monitors to display all the necessary charts and applications.

Posted by Michael Taylor at 6:03 AM | Permalink | Comments (0) | TrackBacks (0)

Why day trade?
Because it is a viable source of income and a very profitable one.
Because no matter whether you are in America, Asia, Japan or Europe, anywhere in the world.... you can trade.
Because you can trade when you want. Work when you want and enjoy the freedom that company employees only dream of.

Why trade the Emini?
Because it requires only $2000 to open an account to start trading.
Because you can tray 24 hr through CME's globex system
Because even beginners can start profiting from day trading Emini in as little as 2 weeks.

Where can I get more information?
Get your free Emini start up kit here http://www.daytradeemini.com/
ABSOLUTELY NO OBLIGATIONS. You can OPT-OUT anytime.

Posted by Michael Taylor at 5:51 AM | Permalink | Comments (0) | TrackBacks (0)

This is a very common question among beginners. Well, it depends on which emini contract you are talking about.

Before we go on, a distinction has to be made between tick and point. A tick is the minimum level the index can change. This is usually set at less than a point.
For example, for e-mini S&P 500, a tick equals 0.25 points. This is to say that the next level the e-mini S&P 500 can go from 1200 is 1200.25. A one point move from 1200 to 1201 will consist of 4 ticks.

For the e-mini S&P 500, each tick equals $12.5 dollars. One tick is set to be 0.25 points. Hence 1 point of e-mini S&P 500 equals $50 dollars ( 4 x 2.5).

For the e-mini NASDAQ 100, each tick equals $10 dollars. One tick is set to be 0.5 points. Hence 1 point of e-mini NASDAQ 100 equals $20 dollars ( 2 x $10).

Posted by Michael Taylor at 4:48 AM | Permalink | Comments (0) | TrackBacks (0)

Hi fellow trader,

How's it going lately? One of my students asked me how many contracts he should trade for a beginner. I recommend 2 contracts. Well, I always recommend the NASDAQ 100 over S&P 500 for beginners as it is less volatile. Beginners get burnt on S&P 500 in hope of making big money. DON'T GET GREEDY. GREED is one of the worst enemy of the trader. Start by trading 2 contracts, and aim for a 5 point move. 5 points in Nasdaq 100 emini is equivalent to 100 dollars. Remember, the minimum tick for NASDAQ 100 is 0.5 points which is equivalent to $10. So by trading 2 contracts for a 5 point move, you are aiming for
2 contracts * 5 points * $20 = $200.

The trade below is a typical simple and fairly accurate trading technique beginners can try out. Several Conditions must be satisfied first:

1 Price is in an upward trending environment.

2 Price is moving countertrend in a pullback towards the moving averages.

The KEY is to wait for price to bounce off the moving average. Wait for confirmation and enter. Exit when price hits the previous peak. This following trade illustrates this strategy:

For those of you who are cynical, here's proof of this simple trading strategy: (click to enlarge image)

Posted by Michael Taylor at 11:00 AM | Permalink | Comments (0) | TrackBacks (0)

Both the S&P 500 and Nasdaq 100 emini futures contracts have expiry months in March, June, September and December which are denoted by the letters "H", "M", "U","Z"respectively. Hence NQ05Z will represent the NASDAQ 100 emini contract with expiry month in December 2005. Similarly, ES06H will be the symbol for an S&P 500 emini contract with expiry month in March 2006.

For a full discussion, please get your free Day Trade Emini Startup KIt. Absolutely no obligations!

Posted by Michael Taylor at 4:25 AM | Permalink | Comments (0) | TrackBacks (0)

There is a distinct difference between day trading and investing. The main difference is the time frame and methodology used. Investing requires a much longer time frame than trading, from months to years to decades. Usually you want to select a good company that will not go bankrupt the next day you purchase it. You will also want to analyze the fundamentals of the companies, make sure it is in good financial health and has a competitive advantage relative to other companies in the industry.

Trading takes a different approach to making money. The time frame considered is short from a few minutes to hours to days, weeks or maybe a month. Specifically, day trading refers to strictly trading within the day. This means that you do not hold positions overnight. For example, if you buy at 10:00 (EST), you have to sell before 16:15(EST) when the market closes.

There are no rules against holding overnight but risk is minimized if trading is strictly restricted to within the day. The market often moves in reaction to news when exchanges are closed. Stocks usually do not have much liquidity and trade on light volume after market hours. Imagine what would happen to your long position when there is a sudden hurricane strike when market is closed. The market will drop but you might not be able to sell at a reasonable price due to low volume. I sleep better at night when I know have no open positions overnight. Whatever losses and winnings are strictly during market hours when there is enough volume to trade. How the market moves after the closing bell does not affect me and I start the next day with a new state of mind.

Posted by Michael Taylor at 1:18 AM | Permalink | Comments (0) | TrackBacks (0)

Hi fellow trader,
How's your trading so far. After the big gain on Tuesday ( FOMC minutes), I had some small profits for Wednesdays and Thursday. ( around $300 -- $ 500), market was not really moving, and I was happy that I was not making a loss. I will spare you the trouble of looking at these not so great trades.. but, bear in mind that it is not everyday that you get to win a few grands from the market. Sometimes you even make a loss. Ok, enough of caveats... let's examine this trade now..

The announcement of the Non Farm Payrolls at 8:30 am gave the market bullish sentiments.

according to briefing.com:
Non-farm payrolls, the most scrutinized portion, rose a less than expected 108K; analysts had expected a 200K increase. Sustained payroll growth near 200K per month is expected for 2006, and that pace is key for consumer spending. The unemployment rate ticked slightly lower to 4.9% while hourly earnings rose 0.3% (consensus 0.2%) and the average work week remained 33.7 hours. In its initial response, stock futures have jumped higher. While the non-farm data was below expectations, strong revisions to last month's data have helped futures trade.

Whatever... I was monitor the market during the announcement and anyone could see that the market was reacting favorably to the announcement. You don't need to be an expert analyst to know that.

Market opened at 9:30 am with a 5 point gap up. Experience tells me that such gaps are very likely to close. I was expecting a rebound upon the closing of gap as the pass few days had been very strong on the upside. However, my MACD indicators ( proprietary, not shown in pic look to DAY TRADE EMINI FOR REGULAR PROFITS for a complete discussion) were not faring welling, showing a ranging market scenario, I decided to wait. Remember, PATIENCE is one of the most important characteristics of successful traders.

My chance came at 10:24 when NQ ( Emini NASDAQ 100 Futures) rebounded heavily after closing the gap. I long 1 contract at 1725 and another 4 at 1731 and at the same time I set a limit order to exit all 5 contracts at 1740. However, if NQ did not cross the 1735 resistance line formed at the opening price, I was prepared to exit. Fortunately, NQ crossed 1735 with a 4 point white candle, this gave further conviction that NQ shouldn't have any problem hitting 1740. As expected, at 12:30, all my contracts were sold and I pocketed $1020.

Posted by Michael Taylor at 5:21 PM | Permalink | Comments (0) | TrackBacks (0)

How's your first trading day? Not bad for me. I just made $2380 trading the NQ ( Emini Nasdaq 100 futures). It was virtually a riskless trade. I timed my trade just after the release for the December FOMC minutes at 1400. Why did the market go up?
You don't need to know exactly why the market go up. Usually market reaction to FOMC minutes is limited. But today, there's a HUGE spike. I hope you were able to grab this opportunity and make some hard cold profits.

Technically:
NQ was already trading near the Moving averages before the FOMC minutes. The moving averages were also flat. This is a pre-warning signal that NQ is gearing up for a big move. Nobody is asking to you start buying or shorting immediately, wait! I waited for around 3 minutes after the announcement before buying 1 lot. Upward momentum was apparently unstoppable and I added 4 more lots 2 minutes later. ( refer to 5 minute Candlestick Chart above). When it hit the resistance line 1694.5, I was almost ready to take profit but at the same time I was hoping for some more upward potential. I decided to wait and was ready to exit on the first sign of weakness. Momentum appeared to slow and I exited all 5 lots. My profit was $2380. Not really that fantastic ( My highest record was $5320 in a single trade), but I was satisfied, afterall this is a good start for the first trading day.

Here's the fundamentals:
Well, according to analysts, the minutes reinforced perceptions that the Fed's tightening policy may be near an end.

According to the minutes:
“some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance.”

Measured might be interpreted as a steady 25 basis point tightening in recent context. While the minutes should not be interpreted as a signal that the tightening cycle has run its course, they do seem to reinforce the belief that policy is now comfortably in the neutral zone which is good for the market.

Posted by Michael Taylor at 4:30 PM | Permalink | Comments (0) | TrackBacks (0)