Day Trading the Emini - Training Ground For Big Contracts
In 1997 the Chicago Mercantile Exchange created a new financial instrument known as the emini futures contract. It started off small but now is a fully mature market with excellent liquidity. Now in 2005, the emini futures contract is an investment vehicle of choice, for beginning and experienced futures traders the world over. In this introductory article, I just want to have a look at why that is. You see for an investment vehicle to gain wide appeal it has to have a few characteristics. It needs to be accessible to a wide public. The emini is such a vehicle. The minimum you need is around $500 to get started, instead of $5000 or more with regular futures. It needs to be liquid, in other words there must be enough buyers to buy when you want to sell and sellers to sell when you want to buy. The emini is very liquid. There needs to be a significant profit. The structure of a well traded account is such that with a small amount of start-up capital very significant profits can be made, enough actually to trade for a living. The taxation situation is very advantageous, in many jurisdictions only being capital gains tax - you should always check with a professional before making an investment decision. The lifestyle of a successful emini futures trader can be very comfortable, an hour or so of trading in the morning and that's it for the day. It's possible to make $500 or $1000 in an hour or so depending upon how many contracts you trade. It's also possible to lose just as much, which is my obligatory sobering statement to any gamblers out there. It's this lifestyle that gives it such appeal to people like you and me. - Freedom from the man
- Working from home
- Spending more time with the family
But that is the positive. On the dark side, with futures and emini futures there is financial risk, so this is not something that one goes into untrained. That would merely be gambling. Successful investing, is not so much about being right or wrong or the roll of the dice, but about money management, patience and discipline to following a system. If you are a gambler then stay away from futures, for you will surely lose and can lose big. If you are willing to learn and trade a system, and utilise money management principles then you can join the ranks of an group of successful traders are making significant profits from home. Graeme Sprigge is the webmaster of emini-courses.com, a site which presents and reviews more than ten quality emini day trading courses and systems. Graeme has a keen interest in investing in options, shares and futures trading. Visit emini-courses.com to get an eye-opening free ebook, The Truth about Day Trading |
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