When you trade futures for the day, you enter and exit all positions on the same day – if you never have a position from one day to the next. Because it is difficult to predict market movements at night, many traders avoid risk with day trading. Ironically, the public believes that day trading is the most dangerous way to negotiate.
THIS IS A MYTH!
Some traders trade futures per day, doing 1 to 3 trades per day, trying to catch the main movements of the day. Others trade often and with output, trying to “get” a small profit in each trade. (My style uses a unique blend of these two strategies.)
For trading futures on the day, the Emini Stock Index Futures has become the most popular trading vehicle of the day because of its ease of trading, leverage and ease of trading. You can go short or long with equal ease – because of the “tick up” rule, it’s easier than making it shorter than long.
It is important to understand the time relationship of eminences (and “big contracts”) with cash indices. Let’s start with the box.
The S&P 500 stock index (cash index, SPX symbol) is key to trading the day’s futures. It has an Exchange Traded Fund (“Spyders”), but no “tick up” rules. The price of the S&P 500 cash index moves up and down with the 500 shares that make up the index. SPYder is closely following the S&P 500 box index. You can exchange Exchange Negotiated Funds such as SPY (and QQQQ Nasdaq 100) online from home. But for day traders they are not as beneficial as day futures negotiations.
The concept of “futures” is a bit confusing, but it comes down to this: the financial industry has turned the S&P 500 cash index into a “contract” that trades in the form of shares. A contract (or future contract) has a price that goes up and down from one moment to the next. It has a chart that looks like a stock chart and with it you can make money by buying low and selling high or vice versa. That’s as complicated as it needs to be right now.
“Big contracts” or SP Maxis were first invented and are still around. With big contracts, a lot of money changes by hand. When the SP Maxis price moves one point, they move $ 250 per contract with it. SP Maxi trades in a literal “hole” where traders who call themselves “traders” shout at each other, buying and selling part of the stock for everyone who wants it.
The natives are not public servants, of course, they earn money for their own accounts. They have the advantage of being able to read each other’s body language and the tone of the other trader’s voices. The strongest traders in the hole see what they are doing. They also have many other advantages, as the costs per trade are low compared to public commissions.
“Locals” are not born as professional traders, they learn to market like everyone else, except for the great advantage of learning, because they learn to learn scalp first! They allow for immediate access and low commissions compared to others, but those who trade futures online can also benefit from professional scaling.
Scalping is basically limiting your losses to just one or two bucks while you make a profit. It’s easier than getting several points per trade, I’ve been trading the futures of the strategy day with great success.
Locals also use expansion (the difference between supply and demand price) to achieve rapid returns on demand entering each side of the market. This makes it easier for them to scale.
In the past, all of these advantages made it impossible for a “retail” day trader to be a successful scalper. It was crazy to try. Many traders today have the idea that scalping is very difficult because they have to compete against traders who have an unfair advantage to the public.
But that has all changed now. If you follow simple and important guidelines, you too can be successful in scalping and trading the futures of the day online.
Maxi took the concept of future contracts and made smaller contracts (eminias) for $ 50.00 SP instead of $ 250.00 for each SP point. This will allow all traders, both small and large, to trade the futures of the stock market index.
But even more radical, smaller contracts (eminences) were set up to trade only through computers. This was revolutionary, they avoided the pit, stripped the “locals” of their advantage, and leveled the playing field in a way they had never done before. And to level the area even further, the costs of retail commissions fell like rocks. Today, any trader can pay $ 4.80 per day for each round (trading in and out of a trade) that trades futures with a small account per day.
This means that scalping has been open to public trade throughout history. But most who negotiate the futures of the day are not aware of where the new advantage really lies.
Scalping is one of the keys to achieving the futures I am trading in the future because I follow a simple rule: “Every trade starts as a skin until proven otherwise.”
SP emini futures became more and more popular and liquid, breaking many records along the way.
The SP Maxis futures and the SP emini futures are derived from the S&P 500 index (symbol SPX), as mentioned, it has an ETF that trades similar to shares (symbol SPY).
So the question is: which of these is the leader and which are the followers?
Today, Emin’s future is almost marked by Maxi’s contract marks, as Emin sometimes begins to direct Maxi, and also on the emotional extremes that Max “surpassed” him, such as at the top of an indoor rally.
SP eminences and SP Max (futures) lead the S&P 500 box index for a variable amount of time, often within a fraction of a second. Some call this a “dog-shaking tail” because futures are derived from stock indices, but they call it what you want, futures are making their way.
Leading futures markets makes their chart patterns “cleaner” and more reliable for trading support and resistance. That makes a huge difference to me.
I use the futures of stock indices (eminis and Maxis) to calculate areas of daily support and resistance, which are the basis of my trading style – the trading style I built about 27 years ago to pay bills and secure my financial security.
I post my support and resistance level in RBI Trader updates, along with my daily trading plan. Since 1996 many professional traders and some beginners have subscribed to my work for accuracy.