Trading education » People

Emini Trading – Basic Introduction to Day Trading Emini Futures

admin — Fri, 21 May 2010 20:31:42 +0000

Have you ever thought about day trading for a living? I am sure you must have at least heard about it, right? Yes, there are people doing it for a living, some making big bucks in the process, others losing their shirts, trophy wives, and mortgages. Not necessarily in this order. And I am quite positive that you would rather be in the former category.

I have been contacted by more than just a few folks who wanted to know what it was like to be a day trader once they had somehow found out through my relatives or friends that that’s what I had been doing for a living for a few good years. I don’t blame them for this curiosity. Everyone once in a while wants to improve his or her life and day trading can be a very alluring way to do it. And quite lucrative too, if you know how to make it work for you, which is not always so easy as most people actually never succeed at this business. But then again, most businesses fail routinely, and most people never succeed at anything big, so these challenging circumstances should not necessarily discourage you from giving it a try.

Now, when thinking about day trading, most people think this has something to do with the stock market. Yes, that is correct, but that’s not the only way to approach it. In fact, this could be put day trading out of the reach of the majority of folks, for to embark on day trading stocks you would need to come up with at least 25,000 US dollars to be deposited with your broker.

It turns out that there is an easier way to do this. And a simpler one, too, for you don’t have to be interested in the whole universe of stocks, but just in a single trading instrument. It has to do with trading emini futures rather than stocks and to do this no more than $3,000 is necessary if you are just starting. In fact, with some brokers, you may never need to deposit more and still be able to make $100 to $200 a day, if you are really good at it. More money is better though, making it safer to start and keep trading and easier to make more money as you simply have more to trade with.

Emini futures, or eminis for short, are traded in contracts. One contract is just like one share when it comes to trading stocks, that is, it is the smallest unit you can trade. There are many eminis currently available for trading, literally dozen or more, but some are more popular than others. The most popular is the S&P 500 emini contract, known under its symbol, or ticker, as ES. Another one is YM, the the Dow Jones Industrial Average (DJIA) emini futures contract.

In what follows, I will focus on this contract as it is more suitable for beginners, in my opinion.

The moves in this contract mirror the moves in the DJIA index, sometimes being ahead of it, sometimes being behind it. One point is the smallest amount the Dow emini futures can move and this move can make you 5 dollars. Usually, one targets more than 1 point, 5-10 pt targets being among the most popular targets for quick scalps. If you happen to make a 10 pt trade, you profit 50 dollars minus the commission that can be as low as $5 or even less for a round turn with many a broker out there, although some may charge more than that. I would avoid them, though.

Now, imagine that you are lucky enough to make only 5 trades like that. That would give you about $225 after commissions, which would amount to a nice monthly paycheck if you were good enough to keep repeating this day after day.

Yes, it is possible to do this. How? Well, that would be the subject of another article.

By: Waldemar Puszkarz

Breakout Method – One of the Simplest Trading Methods

admin — Thu, 06 May 2010 18:47:38 +0000

Many new Forex traders ask what trading system is better to start. I believe the simpler the system the easier can a trader learn to trade. In my opinion trading systems based on a breakout method are the simplest and easiest to trade. I would like to discuss the advantages of breakout method and give a few examples of it.

1. What is the breakout method?

First let’s define what the breakout method is. Whenever you define a price range and the price breaks out of that range you have a trading opportunity. The range can be defined in different ways. Usually it’s a period of time where price did not move a lot. It can be the period of Asian session. Sometimes an indicator can be used to identify such a ranging period. I use Ballinger bands to identify the squeeze in price range.

2. How to trade the break out method?

It’s very simple to trade the breakout method. First you need to set a pending order to buy at the top of the range. Then you set the pending order to sell at the bottom of the range. Or if you can continuously watch the charts then you buy or sell as soon as price breaks out the range. Some people introduce more sophisticated rules into break out method. Fore example they can wait until candle closes outside of the range. The beauty of the break out method you know for sure where to place your stop-loss level.

3. Example of a Bollinger-squeeze breakout method.

This is one of my favorite trading setups. Place Bollinger indicator on your 15-minute chart. Look for the period when bands become horizontal and the distance between them becomes no more than 10-15 pips. The longer the squeeze lasts the higher the probability of a profitable breakout trade. Now place your orders on each side of the bands. The upper band is where you place your buy order, the lower band where you place your sell order. Stop-loss levels are placed at the opposite bands. With EURUSD pair this method gives at least 30 pips. But taking profit is actually art of trading. So you need to test your profit taking levels and methods with it.

By: Albert Schmidt

What Do You Need to Learn to Trade Currencies Successfully?

admin — Sat, 01 May 2010 04:57:33 +0000

Some people ask me if trading currencies is something you can learn or it’s something that must suit your personality. I strongly believe that any skill is learnable as long as a person has a strong desire to persist in learning. Another thing is that Forex allows you to trade with any personality. If you have a better emotional control and you can watch continuously how price is fluctuating then short term trading may suit you better. If you have patience and can wait for a long time for trade to mature then long-term trading is for you.

So the question is what do you need to learn successfully trade currencies? I found one thing that made all the difference in my learning experiences. But first let’s look at the reason why people get attracted to trading in Forex or why they start any business at all. I believe they attracted to it by the promise of freedom. How many times you heard “be your own boss”, “fire your boss”. But what I didn’t realize was that trading as well starting any new business required much more effort and hard work than any boss would require.

So the most important thing I found to make my learning experience much more successful is to find an accountability partner. When we study in school we are accountable to our teacher to do our homework. When we work we are accountable to our boss or company. So to make your learning to trade successfully you need to find someone to hold you accountable on finishing your tasks and on following through your plans.

I have my wife to hold me accountable. She has no understanding of any technical or fundamental analysis but she does have understanding of my finishing daily tasks that I have planned. If you can find a mentor who trades Forex it’s the best option. But if you don’t have such a mentor it can be any of your friends or relative. The most important thing is they need to be supportive of your plans.

The following are few tips on learning Forex trading with and accountability partner. First select a trading system that suits your personality. Now set a daily routine of testing and trading your system. Put on paper how many trades on historical data you are going to test on a daily basis. Make a list of parameters you want to fix in a real-time trade. For example if you get impatient and get out the trade too early you can put it as “Always wait until price hits the take profit or stop-loss levels.”

At the end of the day or at least at the end of the week report to your partner how well you followed the plan. Don’t pay attention to a result of any single trade. If you lost but managed to stick to your rules then it was a successful trade. If you had a profit by violating your trading rules then you failed. This is what needs to be reported.

You may be thinking that having an accountability partner is not very important thing. Trust me if you do it on a consistent basis very soon you will develop a habit of accomplishing whatever you set to accomplish in your trading plan. Once you have that habit in place the success in trading becomes surprisingly easy.

By: Albert Schmidt

Emini Trading – Is Trading Emini Futures For You?

admin — Wed, 28 Apr 2010 23:18:32 +0000

No, it’s not.

Now, that would be a short answer and as you see I can be quite succinct. And even though I meant this half in jest, it is the correct answer for most people out there. Simply because most people will not succeed at trading emini futures. Or even stocks, for that matter.

The reason is rather simple too: this is a very competitive business and only the most competitive will succeed. Which rules out about 90% of the human population. Yes, let’s be painfully honest here: some people are not even computer savvy enough to start this business. You don’t have to know how to program in C++ or C# or any other higher programming language, although this may prove very useful indeed, to be able to launch a successful trading career, but since your tool is a computer, you need to be able to use it well. Computer dummies should not apply.

But let’s assume that you are no stranger to computers and so this should not be a problem. So far so good then. But that was actually the smallest obstacle to overcome on your way to become a successful emini trader. There are much bigger ahead.

Do you have the mental aptitude to succeed in this business? The market is merciful and there is no room for any office politics to work things out. You are either right or wrong. There is no other way. No amount of persuasion will convince Mr. Market to give you back what you just lost. You have to fight constantly and be prepared to lose and be humiliated more often than other mortals. If you can take it, and most cannot, you are one step closer to your success as an emini trader.

Now you only need a good strategy. One that could make money and that would suit your trading personality. Finding such a strategy can be an elaborate process. Once this step is completed, though, you still need to see if it makes money in real trading. Sometimes, and probably more often than not, many wannabe traders end their careers right here. So close to the success. Practically one step away from it. This is so because they do not find their strategy good enough. And that’s how the trek to the Holy Grail starts. The journey to the land where only perfect strategies live.

The legend about this land is not unlike the legend about the Atlantis. Mesmerizing, but still only a legend. Such a land does not exist, but the belief in it is so strong that many a wannabe trader ends up searching for it forever instead of trading. There are no perfect strategies. And the sooner one realizes this, the better. Stick to what is good enough. Stick to what works even if it is far from what you would like to be using. Simply master it as well as possible and you will be on your way to solid profits.

Yet, despite all these obstacles, I do strongly believe that everyone can succeed at trading eminis. Everyone who really wants to, that is. Which still excludes 90 % of humans, but it can include you. As long as you really want it badly enough.

By: Waldemar Puszkarz

Stock Trading Tips

admin — Sat, 13 Mar 2010 00:07:59 +0000

On a constant basis, we are constantly bombarded by “stock trading tips”, in emails, by regular mail, and in many other forms of print. We’ve all seen those nice glossy newsletters in our mailbox proclaiming the next hot stock that is “Going to Quadruple Your Money in Only Six Weeks”, and other similar ridiculous claims. Most of these stock trading tips are worthless and will only end up causing you to lose money or break even at best. But, how do you determine if these stock market trading tips that are being freely given have any real value or not?

Luckily, there are a few basic guidelines you can follow that will help you to determine if these tips are going to have a likely chance of improving the value of your stock trading portfolio. Follow these few simple guidelines listed here and you’ll be able to eliminate most, if not all of the “stock trading tips” you receive.

Guidelines to Determine Whether Stock Trading Tips Have Real Value

1) Who is paying to have these tips delivered? A lot of what you receive are simply paid advertisements. Look closely at the bottom of the last page. By law, if a company has been paid to promote a stock, they must state this fact. And usually it is in small print at the bottom or end of the document. If it says they were paid to promote the endorsed company, you can usually bet that you will NOT “get paid” by investing in it.

2) Check the recent volume of the underlying stock tip. If there was significantly higher recent volume surges before the stock tip was sent out, you can usually rest assured that someone (the people providing the stock tip) have already purchased this stock and hope to make a profit when those that receive their “tips” purchase this same stock from them at an elevated price due to the frenzied buying of their duped targets (you).

3) Search for recent information and news on the recommended tip. If you can’t find out anything about the “great” company they are recommending, then you should strongly consider staying far away from it.

4) Do the providers of these stock trading tips make statements like “largest off-shore oil find ever” or “so profitable they don’t know what to do with all the extra cash”? If so, you should be able to research these stocks and find at least something that backs up these outlandish claims. If not, well, then once again it is probable that you are being misled.

So next time you receive yet another hot stock tip, simply follow the above guidelines to help determine the validity of the investment. You will find that a large proportion of all the free stock tips you receive will meet one of the guidelines above.

Remember, these stock market tips are being given to you for “free”, and more than likely you’re getting what you paid for.

Buyer beware!

By: Frank Soler

Currency Trading Course – An Education For Your Financial Future

admin — Tue, 12 Jan 2010 10:53:27 +0000

People execute trades everyday. There are those who trade consumer products such as food or clothing while there are those that trade services for salary. Everyone needs money in order for them to live. This is the very reason why humans create businesses, participate in markets and sell products. If you would like to earn more than what you are already earning from your regular day job, you may do so through forex trading.

If you have not heard of foreign exchange trading, then you are clearly missing out. Individuals see this business as an opportunity to earn money without any difficulty. Generally, what you do in the forex market is trade currencies. Sounds easy? It is, as long as you possess the needed capital and even simple knowledge about how it works.

Sadly, majority of the world population do not understand the way foreign exchange works even though they are interested in this business. It is not hard to catch why they show interest in it. After all, it is only the largest and most liquid market in the whole world. Furthermore, the market works 24/7, so you can continue to earn profits regardless of the time.

However, while forex is indeed a promising means of profits, it involves its own risks. A lot of people execute such mistakes, which is why they continue to lose earnings in the market. Without the right knowledge, you will surely flunk in the field of forex. This is where a currency trading course comes in handy.

A currency trading course, as the name suggests, is an educational course that mainly teaches about the basics of forex and how you can do well in it. You must understand that forex is trading of currencies, so this knowledge is highly essential.

If you want to be a success in the forex market, you should start looking for the right currency trading course for you. Good education will lead to an effective strategy in forex, which will eventually turn your efforts into earnings. It also helps you recognize the risks and benefits that you can gain. With the proper course, you will definitely be enjoying your profits in no time.

By: Milton Houle

Forex Trading Education – Trading Looks Easy But You Must Have This Key Trait Or Lose!

admin — Sat, 09 Jan 2010 20:50:35 +0000

Forex trading look easy and anyone can learn to be a successful trader so why then do 95% of trader’s burn their equity and get wiped out. The reason is they lack one key trait and this normally comes about from the way they get their forex education…

Trait the overwhelming majority of losing forex traders lack is discipline – they have all heard of it but can’t obtain it and in most instances this comes from the way they believe forex markets work and the education they get.

There are two main reasons traders cannot stay discipline and trade their systems.

1. They Want to Follow Others

The fact is discipline comes form within and is based upon confidence in what you are doing and most traders follow others and do not get confidence. When a few losses occur (and most of the advice given on the net and forex robots people try and follow do) they then throw in the towel however, even with a successful method, traders cant follow them most of the time.

Keep in mind if you don’t have the disciple to follow your trading system – you don’t have one!

3. Normal Traits to Win Don’t Apply In Forex

Most trader want perfection they want to buy low sell high and predict market tops and bottoms and be rewarded by the market for being clever and their effort – but it doesn’t the forex market provides a unique challenge and traits that work in normal society, don’t in forex trading:

- You are not rewarded for effort just profits you make

- Only you can be wrong and the market is always right

- Being clever wont help its like effort you don’t get rewarded for it

- You cannot trade with the majority you must trade in isolation

- Your emotions will come into play and fight your ability to remain disciplined.

Forex trading even if you have a sound system takes tremendous discipline to stay on course, as normal traits that you rely on to make money in society, don’t work in forex trading.

This is frustrating and when you start to lose and the market makes you look a fool, you have a battle with your emotions to keep executing trading signals in the face of losses. You also need to be on your own and cannot seek refuge with the majority, as the majority lose.

Becoming a Disciplined Trader is Achievable but NOT Easy

Think its easy? Then you have never traded!

Of course, you can do it – but this means getting a forex education which you have confidence in and accepting that you will look a fool, you will lose for some periods and you will have to battle your emotions to stay on course.

Discipline comes from confidence and learning and applying a logical forex trading system, through the losing periods and staying on course – until you are rewarded for your perseverance.

Success is in your hands and is reliant as much on your mindset as on your method.

You need a logical method; you have confidence in and the discipline to apply it. If you can do this, you can make big forex gains – its not easy and that’s why the rewards are so high.

Learn to be disciplined and you will find it will lead you to currency trading success.

By: Kelly Price

Forex Trading Education – How To Trade Price Consolidations

admin — Mon, 04 Jan 2010 10:57:52 +0000

Trading on price consolidation breakouts is a popular choice among Forex traders. In this article, I will present to you one of the most effective and simplest ways to trade consolidations.

What Is A Price Consolidation?

Price consolidation occurs when there is no obvious uptrend or downtrend in short-term time frames. Ranging markets are not considered to be consolidating because prices are still fluctuating up and down. In a true consolidation, market prices don’t fluctuate and typically stay within a 10 to 15 pip range.

What Time Frames Should I Trade?

Consolidating prices don’t usually last very long. That’s why you’ll usually trade using intraday time frames (i.e. hourly charts or minute charts). Occasionally, daily charts may show flat prices as well… but these are more the exception rather than the norm.

How Do I Trade It?

Most people enter into a trade when prices break out of the highest price (or lowest price) of the consolidation. If prices break upwards, they buy. If prices break downwards, they sell. The decision to trade on breakouts is based on the assumption that the momentum of the break will be strong enough to push price further in the same direction.

How Effective Is It To Trade Breakouts?

In my experience, breakout trading can yield rather consistent profits. This is because they usually follow through. The hard part is deciding when to exit your trade once it’s in-the-money, because breakouts sometimes reverse directions quite quickly.

What Should Be My Profit Target?

Usually, a profit target of 30 pips is good enough. Sometimes, you may want to try for 50 pips. I don’t usually hold breakout trade positions after I’m in-the-money for 50 pips because then the price action will usually turn erratic.

By: Harold Hsu

Stock Trading Seminars – 7 Points to Consider at a Trading Seminar

admin — Mon, 21 Dec 2009 08:23:41 +0000

A great many seminars are nothing more than a product pitch, or pitch-fest as they are commonly referred to. I’ve spoken to people who simply will not attend for that reason only. Never again should you need to wonder about what to look for when you attend a Day Trading seminar. Here are seven pointers worth considering before you attend. It’s very easy to get lured into spending precious time at a seminar, only to come away with an awful feeling of it not being worth your while.

1. If the seminar is going to cost you money, then the chances are that you should get a reasonable amount of information for your outlay. A golden rule is, that just like the rules of placing a trade anywhere, you should never spend more than five percent of your trading budget on a seminar.

2. The cost of the seminar is not always indicative of the quality of the information, or tutelage you will receive. If you can, check out online for any reviews from previous attendees.

3. What you will likely find in a free seminar is that there will be a product pitch at the end. Your host will be making the most of the seminar as a pitch-festival for their products, as well as what they earn from trading.

4. Always ask to see proof of their successful trading. If they cannot or will not, view this with suspicion. Your host should at least be able to prove that his or her product works

5. Do not be fobbed off, or get suckered into stories of their family, or a recent holiday, for instance. It is all padding, and a waste of your time. One seminar I went to was padded out for twenty minutes with a story of how the host and his wife met, their children and so on. All very nice, but that was not going to help anyone with their trading.

6. If you can, check out the number of attendees there will be, as the less there are, the more attention you will receive.

7. They should provide contact details so it is always a good idea to find out a little about the seminar first, particularly if you are paying for it. Also, you could ask the organisers if they supply note-taking materials. If not, do not forget you own!

That list will prepare you for enjoying and getting the most from your seminar. Do not forget to arrange your travelling and accommodation well in advance too. Arrive early rather than late.

By: Ian C Jackson

Forex Trading Tutorial – How to Make Money Automatically With Forex

admin — Wed, 16 Dec 2009 20:23:10 +0000

In this article, I want to explain how you can make money automatically in the foreign exchange market. The earning potential in this market is extremely high and millions of people contribute to a daily turnover of over $3 trillion. This forex trading tutorial will tell you how to place and close trades automatically.

The way to place trades that will have the greatest chance of coming out in profit, without you doing anything, is by using forex trading software. Forex trading software will work as an expert advisor application on your forex trading platform.

Now, if you already have a trading platform, that is good and you can install the software to work with it. If you don’t have one, you can get a free one, such as MetaTrader 4 and set up the software in a matter or minutes.

Next, you will want to enable the software to start working. Let it analyze the market conditions and execute trades. These software programs are extremely smart and can make very reliable decisions, which makes you the most money.

Now, before you use this forex trading tutorial with real money, I recommend that you use it with a demo account to make sure it makes good trades. Keep in mind, however, that no software is perfect. There will be trades that lose money, but the majority of them will make good profits that outweigh the bad trades that come every once in a while.

I hope that this short forex trading tutorial has helped out better understand how a forex trading software program can help you and make your trading much easier. As someone who has used forex software, I recommend it highly.

By: Cory Sanders