The E-mini Trading Professor

Archive for the ‘Emini Trading’ Category

First and foremost, I would like to wish everyone a happy and prosperous New Year.  This is a time when many people, including traders, re-dedicate themselves to the passions in their lives.  For me, it has always been trading and I look forward to a New Year and trading e-mini contracts.

To a certain degree, your personal dedication to trading will, more or less, determine the kind of success you will enjoy.  While my job is to teach e-mini trading, it is ultimately your dedication and continuing education that will make you a profitable trader.  I remember the very best teachers and mentors that have taken an interest in my career throughout the years, and I learned something from each of them.  But the most important mentor I ever had, lit the fire of becoming a student of trading and consuming, voraciously, all I could find on the topic.

These days there is much more written about trading than in the old days.  The old trading masters were loath to share their secrets with the younger generation.  But with the proliferation of online trading, a slew of books have emerged on e-mini trading.  Some are very good, others are merely infomercials for proprietary software the author is trying to sell, and others are just plain awful.  I try to read a book a week on trading, and this causes me to encounter all sorts of authors.  I guess you take the good with the bad.

Over the last couple of weeks I have been writing articles in a “series” format, and have completed all I want to write about trend lines.  I am including links to all of the articles below and hope that you may find at least one useful idea in the entire lot.  If you do, my mission has been accomplished.  Like trading, I truly enjoy writing about trading in an unbiased and non-commercial way.

Here are the links to the recent trend line series:

As I mentioned earlier, these are articles are packed with information, facts, and my personal observations.  That being said, my real goal would be spur your interest in further interest in the diminutive trendline.

Again, have a Happy New Year…but it’s back to trading tomorrow.

ter> 

Related Blogs

Related Blogs

Forex trading has gained a large following in recent years as a popular day trading vehicle.  It’s not unusual to observe a barrage of Forex firms touting their services on just about any financial news publication.  As a longtime institutional stock trader and commodities trader I am often shocked at some of the outrageous claims and advertising techniques this industry utilizes.  This type of advertising and verbiage is simply not allowed by the SEC or the CFTC.  The Forex industry, on the other hand, is lightly regulated and offers no centralized exchanges like the securities industry in the United States and has virtually no regulation on advertising technique and claims.

From the onset I want to point out that the United States stock and futures exchanges have their share of hucksters and fraudulent activity.  You need only peruse the current SEC and CFTC enforcement actions to get an idea of the amount of illegal activities that occur in our highly regulated exchange based trading structure.

On the other hand, the lightly regulated Forex industry has been in recent years the target of both the SEC and the CFTC, with good reason.  Exchange traded securities provide potential traders with a high level of transparency and information in regards to the equity product or series they intend to trade.  Variables like a leverage, registration of broker-dealers, and capital adequacy requirements are just a few necessary requirements that would go a long way toward establishing much-needed transparency in the Forex industry.  Further, and from a personal standpoint, I believe a centralized exchange for Forex trading would be optimal for the industry.

By means of comparison, the futures industry and stock trading exchanges have rigid leverage, registration and capital adequacy requirements.  In addition, e-mini trading is all conducted through well-regulated and orderly exchanges that feature reliable data feeds that provide real-time information on volume, trading entities, and pricing to all participants.  This transparency in the futures industry is a sharp contrast to the murky Forex industry which is dominated by individual banking interests.  Quite simply, there is a shocking lack of transparency in the Forex industry.  In an orderly market, all participants ought to have access to accurate real-time information and standardized trading contracts.

Another concern of the SEC and CFTC is the leverage requirements in the Forex industry.  The current United States industry standard for leverage and a Forex industry is 100:1.  The most recent regulation proposes lowering the leverage standard to 10:1, which is a departure from the current leverage standard that is a quantum leap in scope.  For a variety of reasons, Forex traders have been, by and large, fiercely critical of these regulations.  Since the CFTC can only regulate firms in the United States, offshore firms would still be able to offer the absurdly high leverage requirements the Forex industry has enjoyed.  The obvious result of this new regulation would be a mass migration of Forex traders from United States based firms to offshore firms that would not fall under the proposed US Forex reforms.  There is, however, regulation under consideration that is very similar to offshore betting operations; in short, it is unlawful for US citizens to patronize offshore betting firms in order to circumvent current US law regarding betting.  The proposed regulation for patronizing offshore Forex trading operations is very similar to the limitations of US citizens circumventing United States Forex regulation.  In short, Forex traders based in the United States would be required to trade through domestic Forex trading operations.

In short, I don’t trade Forex because of the lack of transparency and a centralized exchange.  In my opinion, there is simply too much potential for manipulation of bid/ask quotes, front running, and outright fraud.  Currently the Forex industry leads security related scams by a wide margin, even though it is a small portion of the total day trading aggregate.

To summarize, the Forex industry has great potential to become a legitimate and profitable day trading option.  In my opinion, the industry must institute strict regulation before its legitimacy can be truly realized.  I think that in time all of the above addressed the problems will be rectified, but until there is true transparency in the Forex industry I believe I will abstain from participating.  We have identified problems like over leverage, lack of registration, and the absence of a centralized exchange as problem areas in the Forex industry.  Until these problems are addressed, I don’t think the Forex industry will reach its full potential.

Real Live Trading Doesn’t Lie. Spend several days in my trading room and see if you can benefit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by <a target=”_new” href=”http://www.learn-to-trade-and-invest.com”>clicking here</a>.

Related Blogs

This is our weekly video summarizing the results of this week live trading room.  The week was success and profitable, though the trading was often erratic.  The volume this week was relatively low.

Make sure you take the opportunity to sign up for a FREE WEEK in our trading room and see for yourself the kind of results we post on a regular basis.  If  you are a new trader or a trader struggling to become consistently profitable…our room has some thing that will be helpful for you.
httpv://www.youtube.com/watch?v=XJmsSMB8Zes

Again, sign up for the free week.  There is no obligation, and we won’t pester you to unnecessarily.  I look forward to seeing you there.

It’s not unusual to see traders using support and resistance to set up potential trades. The most common trade I see among novice investors is a set up that envisions the price action “bouncing” off an existing support or resistance lines. There are many versions of this particular trade, and it is not unusual to see small investors implement this trade over and over. To be sure, using support and resistance lines as potential setups is very common.

Unlike the trade I described above, where the small traders are looking for a bounce off a support or resistance line, I am looking for a continuation through a support/resistance line. This makes sense at several levels. First and foremost, I’m a trend oriented trader and dislike trading against the trend. By definition, any bounce off a support or resistance line would entail a move against an existing trend, which is something I avoid, especially in a strong trend. Secondly, in order for the price action to move through a support or resistance line it takes a medium, at the least, and usually a strong push to pierce the line. Inevitably, this strong push creates excess momentum which is carried through for 10 or 15 additional ticks, and those additional ticks are the prize I am seeking to capture. This set up usually results in a very violent and short trade, as the momentum pushes the price upward or downward at a high rate of speed. It is an exciting trade to watch and even more exciting to initiate.

When setting this particular trade up, I generally look for a strong support/resistance line that will intersect an established trend line. As an aside, I tend to prefer to take this trade to the short side as the market tends to move faster when heading downward. This can be attributed to panic selling, or long traders bailing out of short positions as the price action moves against them. In any event, I position my entry three or four points below the support/resistance line and wait for the price to come to me. Needless to say, it is never a good idea to chase the price action and it is rare for me to initiate a market order. I want to enter a trade at a point of my own choosing where I think I have the best chance of profiting.

Once you become accustomed to spotting the set up, you’ll find it occurs two to three times daily. The trade is relatively reliable if it occurs in a trending market, and the trend does not necessarily have to be a strong one. On the other hand, I would avoid taking this trade when the market is in a well defined channel. Breakouts or breakdowns out of channel formations are generally unreliable and typically fail. False breakouts from a channel formation look very enticing from the onset, but after moving three or four ticks in your favor they tend to retreat back into the channel. Once in the channel, it is anyone’s guess where the price action may go as movement inside the channel is random, at best.

In summary, we have looked at a trade using support/resistance lines. Instead of looking for a bounce off these lines, we have outlined a straight that entails a continuation of a trend through known support/resistance. We have noted that this trade is reliable when used in conjunction with a trending market, further we have cautioned against taking a straight out of very well-established channel.

Related Blogs

• Trend Alert: The “Middleton” | ShinyStyle
• Elizabeth Warren: Assault on Middle Class Families | The Big Picture
• What Happened to the Middle Class?
• Hotels: The Next Trend to “Pop-Up” | NileGuide
• Even Tea Party Members Do Not Support Cutting Social Security …
• Seriously Scary Android Malware Quickly Pulled From Market
• JP Dellacamera Leaves ESPN for Fox Soccer Channel, Say Reports …
• Browser Support for CSS3: What's the Current Status?
• Insomniac Delivers Resistance 3 Single, Multiplayer Details – News …
• Dozens of Android apps pulled from market due to malware …
• Thugocracy in action in Madison, WI as protesters corner, shout …
• Resistance 3 multiplayer unveiled — Scrawl
• Android Market Coming to Google TV in “Very Short Term” | Android …
• Seesmic Updated for Android with Full Facebook Support, New …
• Cameron Diaz Won't Channel Shirley MacLaine For 'Gambit' Remake …
• Clear Channel Radio Acquires Thumbplay's Cloud-Based Music Business
• Civil Resistance Tactics Used in Egypt's Revolution #Jan25 …
• Non-Violent Resistance In Islam – Inside Islam
• Quinnipiac poll: Plurality support gov't shutdown, limiting PEU …
• Apple Squeezes Competition With $100 Price Drop on Original iPad …

Related Blogs

• Stop Running for Emini Trading, Forex Day Trading, Stock Market …
• Crude Congestion is Resistance Up to 88.11 | News of the World
• The Indicator Series: Dr. Widner's Support and Resistance …
• Dukascopy-Support-Resistance-21/12/2009 |
• Surfin' Safari – Blog Archive » WebKit nightlies support HTML5 …
• Emini Futures S&P 500 And NASDAQ 100 : Basic Trading Info …
• Fibonacci Support, Resistance and the Power of Confluence | Pro …
• Forex Resistance, Pivot Points and Support February 16, 2011
• EUR backs off after test of trendline resistance | ForexLive
• dailywireless.org » Intel: We' Support MeeGo
• Portal 2 For PS3 Has 'Complete' Move Support, Includes Free PC Copy
• PlayOn Support Comes to Android 2.2 Devices › AndroidGuys
• Here's Why You Should Trade the S&P 500 E-Mini Future- Trade …
• Nifty Futures Support Resistance Trading Level For 14 February 2011
• Google, ITA Software Deal Faces Resistance | Travel and Car Hire …
• Outerbanks Pride Celebration Plans Meet with Resistance …
• Emini Day Trading Weekly Range | Emini Trading School
• Emini Trading Update – Monday 14 Feb 2011

If you have read even a smattering of my articles about technical trading you will know that I am skeptical of just about every technical trading technique. I have been vocal in my criticism, often to the point of sarcasm. I have labeled chart formations pure bunk, poked fun at the Elliot Waves theorists, and howled at anything resembling Gann lines, Andrew’s Pitchfork and a host of other exotic sounding technical tools. In short, I have little use for most aspects of technical analysis. Then I became acquainted with FibGrid.

I have a friend with whom I often spend time trading, David Palmer, and he uses a wide range of technical analysis tools. Needless to say, I have a field day poking fun at the endless array of odd looking lines and random chicken scratching that adorn his chart. I am sure he must tire of my endless criticism, as my needling can sometimes border on being cruel. Just the same, we continue to trade together as I have a tremendous amount of respect for his integrity and work ethic. To make matters worse, he is always trying to cajole me into giving his technical tools a try, which I generally dismiss as something akin to practicing witchcraft. Now that I think about it, I have no idea why he puts up with me; but we continue to actively trade together and I genuinely enjoy his company.

One of his favorite topics is the use of a program called FibGrid. For months I dismissed this arcane sounding program as another over-hyped tool of dubious distinction. I refused to use the program on both ethical and philosophical grounds. As a testament to David’s tenaciousness, he finally got me to install the program on one of my minor charts “just to prove him wrong, once and for all.”

Note to readers: I hate it when I am wrong about any aspect of my trading style, which is constantly evolving, and the remaining portion of this article is a frank admission that FibGrid has made my view of technical trading a bit cloudy.

I had a chance to discuss the rationale behind the functioning of FibGrid with its designer David Starr. I have to admit I was impressed with the range of knowledge Mr. Starr possessed about trading, practical application for using the Fibonacci sequence, and his grasp of the history of trading. I have to admit that the guy actually made sense, which I consider unusual for traders purveying anything having to do with technical trading or technical trading indicators.

To make a long story short, I started using FibGrid and the darn thing opened my eyes wide. In the case of e-mini trading, the Fibonacci lines generated by the program date back nearly a decade and are color coded in a hierarchy of importance.

Still, I had not traded with the program and even though the theory sound plausible, I remained unconvinced that it would work in practice.

I decided to put the program to the test, and started using FibGrid in my well attended trading room…in front of some seasoned and knowledgeable e-mini traders. I expected the program to flop miserably and I could relegate the software to a pile of other worthless software have accumulated over the years.

Then something went horribly wrong, tragically amiss, shockingly awry.

The darn program worked. Not only did the program work, it worked with amazing accuracy; and the more I used and understood the program, the more accurate it became. In short, FibGrid started to consistently add cash to my bottom line. A technical program had proven itself worthy to grace my chart and my world had been turned upside down.

Gradually, I began to integrate the FibGrid lines into my well established methodology and have significantly increased my bottom line profit. To be sure, the program has made a significant dent in my profit margin and it only gets better as I learn the nuances of the program.

Who would have thought that this curmudgeon price action trader could learn something from technical analysis? From the onset, let me say that it wasn’t me…I started using the program only to prove it was a sham, like all of the other technical analysis programs I have sampled.

Want proof?

Sign up for a free week in my trading room and watch me integrate FibGrid into my existing methodology. I will begrudgingly admit….it works like a charm and you are leaving good trades and a significant amount of money on the table if you aren’t using FibGrid.

Related Blogs

• W.E.N.N » Swift Tops U.S. Christmas Album Chart
• Music Professor Builds Jazz Performance Program at Columbia …
• viagra find sites computer href – Men's Health: Buy Levitra Online …
• buy discount viagra online a href – Men's Health: Buy Levitra …
• viagra cialis levitra href
• find search viagra edinburgh href – Men's Health: Buy Levitra …
• viagra cialis levitra href
• good screw with viagra href – Men's Health: Buy Levitra Online …
• Gold Prices Climbing Despite Year End Trading Conditions
• Visa's (V) Share Value Crushed by the Fed
• Fly Or Die: The Nexus S, Barbie Video Girl, And AR.Drone (TCTV …
• Investing Systems Network Partners with Stock Traders Daily to …
• Video: Jordan CP3.IV “Quick Can't Be Caught” | Urban-Gear
• (PHP) Modify URL param – mikael12 · Software Objects Source Code
• Operation Preemptive Peace: A 20-Something Guide to a Sane Holiday …
• Robyn – Indestructible (A-Trak Remix)
• How To Purchase A Domain Name | Yoobz.com Blog | Download Software …
• Forex Trading Software – A Discussion | Yoobz.com Blog | Download …
• Xperia Play – The official name for the Playstation Phone …
• China: English Words Are Banned in Chinese Media : World …

Many traders have their own theory on how to place stops on their e-mini market orders, or whatever kind of order they place. Frankly, I insist that e-mini day traders place their stops in a manner that gives them adequate protection. My stop ranges are anywhere from 12 to 20 ticks, depending upon the nature of the market that day.

But I want to address those who day trade without stops and indicate what a terrible risk they are taking because a sudden spike could signal the end of your e-mini day trading career. Stops are an important and essential part of any e-mini trading strategy to keep from encountering catastrophic losses.

I also move my stops when a trade is in progross….let’s assume that I have made a good trade and am in the money and I have initially positioned my stop at 12 ticks…once I am 1.5 points into the money, I manually move my stop up to 4 ticks…once I have reached two points, my stops are at my market entry points, and if I let the trade run I continue moving my stops upward to protect my gain. Remember this…..NEVER LET A WINNING TRADE BECOME A LOSING TRADE…and stops are a great way to do this.

You may choose to use a trailing stop strategy, where once you reach a certain point in profit the stop moves automatically according to a preset you put in before the trade gooes in. I prefer moving my stops manually, which may be the remnant of the “old school” way of doing things, but I feel much more comfortable placing my stops this way.

Related Blogs

Pivot points in e-mini day trading are, to some, the holy grail of investing. Generally speaking pivots are calculated in the following manner:

R2 = P + (H – L) = P + (R1 – S1)
R1 = (P x 2) – L
P = (H + L + C) / 3
S1 = (P x 2) – H
S2 = P – (H – L) = P – (R1 – S1)

Where….”S” represents the support levels, “R” the resistance levels and “P” the pivot point. High, low and close are represented by the “H”, “L” and “C” respectively. Note that the high, low and close in 24-hour markets (such as forex) are often calculated using New York closing time (4pm EST) on a 24-hour cycle. Limited markets (such as the NYSE) simply use the high, low and close from the day’s standard trading hours.

As for my own opinion, I find pivot points of great value on certain days, and of zero value on others. So, if you are going to be a pivot point man or woman, you will need to develop a methodology for determining the accuracy of your own pivot point system.

As for me, I generally chart the pivot points each day, and see what relevance they may have to my own trading techniques.

Closely related to pivots are support and resistance, and this is where the rubber meets the road for me. As many of you are aware, I base most of my trading on chaos theory, which is to say that there are patterns within patterns, but the frequency of these patterns within patterns is random. Ah, that certainly is a mouthful and I am sure that many of you are shaking your heads and wondering what I am actually saying. To put it quite simply, I believe trying to apply linear charting systems to a non-linear market is futile. There is nothing, absolutely nothing, static about the method in which the market trades.

I am sure the random walkers are standing and applauding at this point, but you can all sit down. Of course, the standard argument would sound something like this, at least from the Random Walk Cabal….”those equity bubbles are anomalies that occur from time to time…” But if they were aberrations, every member of the risk arbitrage community would have resolved those market inconsistencies within hours. No these bubbles, or masses of mispriced assets suggest that random walking in a fine theory, but nearly useless in actual practice. The creation of bubbles in the e-mini market has occurred in a variety of conditions and markets for more than 400 years. Whether it has been tulips, or gold, or Internet stocks, we tend to overbuy and oversell, usually against all logic.

However, support and resistance are of great importance to me…but it is important to remember that support is not static either, and is constantly morphing into new support and resistance levels as the days progresses. What? Yes, I know that most day traders strike a line here and a line there and establish there support and resistance based upon those initial highs and lows. Some then apply Fibbonacci retracements to further establish support and resistance. Ah…erm…well….Fibonacci analysis is certainly interesting at some level, but the actual levels of correlation, proven by hundreds of scientific studies, is sketchy at best especially when charting price reversals. Since many of the numbers in the Fibonacci sequence are quite close together, it isn’t hard to point out that the market turned just past a 50% retracement, or just short of a 61.8 retracement….but the fact of the matter remains that super accurate predictions with Fibbonacci numbers is not as accurate as some practitioners would have you believe.

At once point in my career I drew in dynamic support and resistance lines as I traded, but I have found that a program called Decision Bar does an excellent job of pin pointing the ever changing support and resistance lines and have learned to rely on it’s accuracy and save myself a wealth of time and effort.

So, for today….I have tried to point out the problems of charting non-linear systems with linear charting tools, and suggest that non linear charting systems can greatly enhance your e-mini day trading success.

Related Blogs

• Cost Effective Construction – Accuracy is the Key | Architecture …
• OptionsXpress Review: Application, Broker Commissions, Trading …
• Power and Dynamics of Civil Resistance, Slovenia | Mladiinfo
• Mobility Airmen support Pakistan flood relief | Army News at …
• What Is The Currency Trading?
• Forex Automoney – Learning Currency Trading From Free Practice …
• Improvement in Home Value Depreciation Stalls in July | Zillow …
• Pieces of Time's “peace” « Yourish.com
• Expanding the Market for Clean Energy in Rural India | Triple …
• Slacker Astronomy » Accuracy, Precision and Uncertainty in Data
• How to Use Website Contests to Market Your Brand Online
• Women And Resistance Training
• Forex Trading Foreign Currency
• HK: Hong Kong shares close up on Wall Street's cue | Live Stock …
• Greater Bay Area Geo-Attractions: Point Reyes National Seashore …
• me talking out loud » Blog Archive » Attending Day Camp for Developers
• Physician resistance to EMR and why CPT should be replaced …
• “It's time for GM to compete” – Hybrid Cars and Plug-in Vehicles …
• iOS 4.1 Jailbreak on the way, 1 day after the new OS launches
• Duensing Adding Value in Twins Rotation | FanGraphs Baseball

People are always curious, especially non-traders, about how much money you can actually make day trading e-mini contracts. This is not an easy question to answer. Every potential e-mini day trader has a given skill set, with strengths and deficiencies that will contribute to his or her success. So I will compose this article directed at an average individual who is considering learning to trade the e-mini contracts.

An extraordinarily large number of potential traders try to trade without sound training and mentorship programs and find themselves in trouble from the onset. Even seasoned traders have deplorable days trading the market, but a lack of experience and training is the recipe for financial catastrophe. Anyone who is pondering learning to trade the e-mini contracts should either find a great mentor or enroll in a quality training course and practice extensively on a demo account. I would point out that trading the e-mini contracts is no simple task and entails a considerable amount of learning and time.

But the rewards can be very lucrative…

In order to prosper in the day trading business, every trader needs to learn a quality money management practices in addition to trading. There is a tendency for new traders to over trade or trade more contracts than is advisable for their account size. E-mini money management is the key to sustaining a career in trading. I suggest that a trader never risk more than 7% of his account balance on a given trade, and even less if possible. If the novice trader is taking more than 10 trades in a given day, he or she is probably over trading their futures trading account. There simply are not that many good trades on a daily basis. I generally make 3 to 5 trades on an average day, although those numbers could be higher or lower depending upon the market action during the course of a given trading session.

Since I try not to trade a large number of contracts, my daily earnings may be lower than others who trade large numbers of contracts. First of all, let me say that any day I am profitable I am happy. On an average day, a good trader should be able to make between $300 and $700, and on a bad day should be able to limit his losses to significantly less than those target profit numbers. If you are not trading well during a trading session, the best idea is to simply stop and wait for a day that is better suited to your trading style or a day when your emotional state is in better shape to trade. There are days when everything goes perfectly, and there are days when nothing goes right. I can’t explain these phenomena, but have certainly experienced it.

In summary, with practice and mentorship you can earn a great living trading the e-mini contracts on the Chicago Mercantile exchange. It’s something I think many people would enjoy and profit greatly from learning. We think you can learn all of these techniques right here at the E-mini Professor Trading System.