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The Essentials to Successful eMini Futures Trading

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by Troy Noonan

The eMini futures markets are both seductive and treacherous yet in my opinion, they offer the best and most consistent opportunities for day traders.  On any given session a trader can find numerous profitable trades.  But along with the opportunities come many hazards.  Like the ancient Greek Sirens of old, it is critical to not let yourself be seduced by the enchantments of untold profits.  The futures markets can be a cash register but more often than not, it is putting your money into the drawer and ringing up other people’s profits.  In fact, navigating your way through an eMini session, without crashing into the rocks and losing your hard earned capital can be very difficult, but it doesn’t have to be so.  Whether you’re trading the Russell eMini, the S&P, the Nasdaq or the Dow, here are some basic key pointers that you will want to pay attention to if you are serious about succeeding as a profitable day trader.  Here are the essentials to successful emini futures trading.

 

  1. Focus on a strategy with a proven track record.  As you get better, you can diversify by using additional strategies, but this is something to aspire to later.  You may decide to just keep things simple and we all know that simple is usually the best approach.

 

  1. Limit your trading to a consistent time period each day.  You should know your start time and stop time and you should be extremely disciplined in sticking to it each and every session.

 

  1. Backtest your time period and determine consistent profitability.  This will give you the confidence you need to succeed by knowing that your predetermined timeframe does indeed produce profits.  It is best to use a preprogrammed spreadsheet to track your trades.
    1. Note — Manual backtests are far more valuable than automated backtests because it forces you to think through every trade.

 

  1. Focus in on a single market that meets your specific needs.  When I speak of needs, I am referring to three essential things.
    1. Capital requirements; don’t select a market that you cannot afford.
    2. Enough quality trades on a day to day basis, as discovered in your backtest.
    3. A market that you are skilled enough to trade with perfect executions.  You should practice in a sim account until you have proven your ability.

 

  1. Less is always more when day trading.  Your quitting time should be teamed up with a dynamic goal setting strategy.  If you can hit your goals before your hard stopping time, all the better.

 a.  Your goals should be based on what the market wants to give you vs. what you want from the market.  We call this the Power of Quitting.  One of the universally best formulas is what we call ‘poq1.’  That means you need at least one winner and a positive result, then quit for the session.  Combine that with a maximum number of trades and a hard stopping time and then prove it is consistently going to grow your account via your backtest.

b.  There are other PoQ formulas:

 

i.    poq2 which requires two winners and a positive result

ii.    requiring a winner to be a full target winner and not a partial winner

iii.    ‘x’ number of winners vs ‘x’ number of losses, whichever comes first.  This approach doesn’t require a positive result but will do a great job in limiting your quantity of daily trades and could prove itself to be the best profitable approach over time.

c.  The important thing is to live to fight another day.  A great day trading strategy will win more often than it loses so it is essential not to give back your hard earned gains due to one bad session.  This leads us to the next essential point…

 

  1. Surrender to the fact that there is NO such thing as perfection in trading.  NOTHING wins 100%.  The good news is that you don’t have to win 100% to be extremely successful.  Trying to divorce your losing trades from your winners is not possible and IS a loser’s pursuit.  Accept that fact and move a long way towards long term, consistent profits.

 

  1. Add a 2nd and then 3rd market to your day trading routine but stagger them so that you don’t find yourself trying to execute multiple trades at the same time.  This leads to mistakes.  Mistakes lead to losses.

 

  1. Strive for 100% perfection in your execution of your tradeplan.  Zero mistakes is the goal you always want to strive for, each and every session.

 

  1. Limit your risk.  NEVER risk more than 2% of your trade capital on any given trade.  Great wealth comes from consistency.  Go for lots of singles and doubles with the occasional homerun.  Swinging for the fence on every trade leads to lots of strikeouts and lots of losses.  Just increase your position size as your account grows.
  2. Find a good mentor.  Whether it is a reputable virtual traderoom or some other sort of trade coach, this is a very important key to success.
  3. Treat your trading as a business and run it with ‘best practices’ each and every day.

 

There is a lot of money to be made day trading but most traders don’t know when to quit and will often turn a positive session into a negative one.  Or they don’t have their entire tradeplan figured out in advance.  Or they break their own rules, get distracted, make mistakes, etc..  Having a mentor (or trading partner) is a great way to be disciplined because you will be held accountable for your actions or lack of actions.  It forces you to ‘plan your trade’ and then, ‘trade your plan.’  Ultimately, it takes a very professional mindset.  You want to treat your trading as your business and not as a hobby, your source of entertainment or anything else.  If you exercise ‘best practices’ as outlined in this article, you will be ahead of a majority of traders out there and will be in the best possible position to succeed.

 

Finally, seek out an eMini (futures/day trade) Trading Course that teaches you ALL of the above pointers.  One trading course that does teach all of the above is the Premier Trader University’s Trend Jumper Trading Strategy.  This comprehensive course offers everything listed above and a whole lot more:

 

  • Proven tradeplans with rules to follow
  • Video based training
  • Live, in the market training
  • Chart structure that leaves NO guesswork on when and what to trade
  • Directional bias
  • Price action based trading; takes advantage of price momentum
  • High percentage targets
  • Favorable risk reward ratios
  • Clear and concise training that makes everything crystal clear

 

Trading should be easy but it is not simple.  The PTU Trend Jumper makes trading as easy as it could possibly be.  Sure, it is not the only eMini Trading Course that covers all of the above essential keys.  But it is a great choice that has a long term proven track record.  Whatever you choose though as your eMini day trading course, you will be best served if you insist that all of the above is covered in a comprehensive, easy to understand way.

 

 

About Coach TJ

Troy "TJ" has over 17 years of extensive trading experience in forex, futures, and stocks and is passionate about teaching others the art of trading. He has extensive experience in developing comprehensive trade plans for individual investors including risk management, money management, and trade psychology.
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