Start Day Trading The Emini With Only $500
More and more people want to get into day trading. We hear them say, “I am interested in day trading but I don’t have the funds necessary to open the account and meet the minimum requirements. Since 9/11, day trading stocks requires at least $25,000 in your brokerage account. With the economy as tough as it is for everyone, with highest ever unemployment, $25,000 can be a barrier.
At last there is a way for you bypass the barrier to daytrading even though you do not have $25,000 in your brokerage account…learn to trade Emini Futures, a whole new form of education. Emini Futures gives you the capacity to open a brokerage account, and yet have only $2,500. That is significantly less than what you need to open an account to day trade stocks. And imagine trading with only $500/ trade. There are many volatile Emini Futures contracts which require just $500 / contract. Can you name shares of stock that you can be traded for $500, a stock with volatility and liquidity?
Here is one contract you can use for day trading, the Emini S&P 500. On margin, it costs only $500/contract to trade, and some brokerages require even less.
The Emini S&P 500 is a Futures Contract. The “E” signifies that it trades “electronically” over the internet. The “Mini” signifies that it is a smaller version of the same contract traded by the larger institutions and hedge funds. To note, Futures trade in “Contracts” not shares. The symbol, “ES”, is used for the Emini S&P 500 Futures Contract. Imagine trading this Emini. It is like you were trading each of the top 500 stocks that make up the S&P 500 Index, all at once. The Emini S&P 500 Futures Contract rises and falls in accord with the S&P 500 Index on the New York Stock Exchange.
Think of day trading Emini Futures as the same thing as day trading stocks. Your technical analysis charts that you use with stocks work the same, with MACD, stochastics, moving averages, etc. You can use the same trading strategies and same trading software that you would when you are day trading stocks. You can setup up trading alerts, the same alerts that work with your stock trades. Best of all, you are trading the S&P 500 Emini, a contract that represents all the top 500 stocks on the NYSE. You’ll only need 1 technical analysis chart to represent all 500 stocks, not 4 or 5 charts.
To be trading 1 Emini S&P 500, you’ll have to come up with $500 / contract, depending, of course, upon your brokerage. Emini S&P 500 Futures contracts day trade on margin just like your stock trades. But the difference is that your brokerage decides the margin rate he can offer to each client. That being said, almost every Futures brokerage allows you to day trade the S&P 500 Emini with 1 contract with only $500. As a side bar…you really should do your Futures trading by opening an account with a Futures broker, not a brokerage that multi-tasks, one that primarily trades stocks and as an after thought, also trades Futures. Why? Futures brokerages offer better margin rates and lower commissions.
For each “tick” profit, the Emini S&P 500 earns you $12.50. 1 tick is 1 price movement, like 1 penny increase on stocks.
Example: Lets compare day trading a stock that costs $25/share and day trading 1 S&P 500 Emini Futures contract. You’ll need to trade a 100 share lot, so right away you need $2500 to trade that stock. With the S&P 500 Emini you can be daytrading with $500 for 1 contract. To earn $12.50, the 100 shares of stock need to move up about 13 cents, 13 price movements. The S&P 500 Emini only has to move 1 tick — 1 price movement. If you matched investments, you could be trading 5 S&P 500 Emini contracts for the same $2500. Then 1 tick = $60. Now 100 shares of stock needs to move up $6.00, 600 price movements to match the profit from trading the S&P 500 Emini’s 1 price movement.
You’re only moving up 1 price movement with S&P 500 Emini Futures, and 1 price movement could well be under 4 minutes of live trading time. Mind you, it could be that your elapsed time trading in front of the computer is longer than 4 minutes. But we’re talking actual day trading live in the Futures Market, less than 4 minutes.
If you would like more trading education, attend a Monday night Webinar put on by http://Shadowtraders.com. You will be able to see for yourself what Futures trading is all about and why professional day traders choose Futures trading over stock trading. Shadowtraders offers trading software with built in trading strategies and trading alerts using technical analysis charts. Shadowtraders has complete trading education, including a 4-Day intensive online trading seminar and an online trading course that you do at your own pace.
Barbara Cohen is a professional day trader. She has trained hundreds of students to trade Futures with Shadowtraders trading strategies. Before you purchase any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen
