The Real Secret to Day Trading
Small Steps to Consistent Profits
The Benefits of Day Trading Futures
The Real Secret to Day Trading
The best kept emini secret is to find one thing in trading that works, then do that one thing over and over again. That’s the secret to day trading S&P eminis. It’s so simple, but I must disagree: the secret to successful E-mini trading is that there is no secret! That is the secret that you’re looking for (since you’re reading this) – because the secret doesn’t exist! Thinking you have to have multiple monitors and trade 4 markets and have 6 setups, that is nonsense. Watching CNBC, listening to the Talking Heads, and thinking you have to trade day and nights is also nonsense. All you have to do is focus on one market, learn setups based on candlestick patterns, and follow your RULES is the “secret” you’re looking for.
Trading Requires Work
Learning to trade takes effort. Some trading schools tell you that they’ll provide you their automated system and when you purchase it you just set it and forget it: entries and exits will be done automatically for you and the money will just roll in. That’s nonsense. If anyone tells you that, run, don’t walk, the other way. Programmed mechanical systems that all are doomed to failure. They will get in to programming and searching for indicators because they think they are the Holy Grail. Then Fibonacci patterns, and Market Profile, and spreadsheets and market news, etc, etc. But none of it will make a difference. None of it will make you money. In fact it will only create conflict and make you a worse trader – because you will be depending upon a system that does not exist – a “secret trading system. Looking at too much information, in too many markets, will result in paralysis by analysis – a loss of your trading capital.
Simplify Your Trading Habits
It is not until you are willing to step back from your trading desk and ask the simple question: “Do I really need all of this to just make a few points a day?” When you realize that you don’t need all that stuff, that’s when you can start learning how to really trade the right way. Starting with the fact that there is no secret because none exists.
Keep It Simple (Stupid)
Professional traders learned a long time ago that successful training starts with simplicity.. Monitor by monitor. Chart by chart, setup by setup, they forgo the complexity and their trading format consist of basically one chart, a few setups that work most of the time, and they trade on one market that provides enough trades, 3 or 4 on any given day, to profit on a consistent basis. You might have heard of the expression “keep it simple stupid” (KISS). If you apply that principle to your trading desk/setups and trading strategies, it will provide the right trading environment for you to become successful.
Small Steps to Consistent Profits
For the first time you will be able focus on just a few key concepts and principles that produce a few solid trades per day and your trading will take a dramatic turn for the better. This is what most trading educators and the industry are not going to tell you, that less is more. This is what some trading schools won’t tell you, but rest assured, it’s the road to profitability, and it’s the “Best Kept Emini Secret” around!
The Benefits of Day Trading Futures
As an equity trader, have you ever been locked out of trading due to a day trading violation? Or have you missed an opportunity due to short selling restrictions?
Missed opportunities can be costly, so we’ll will look at some of the restrictions in the United States for day trading cash equity products and compare that to day trading with futures.
Minimum Account Size
A pattern day trader who executes four or more round turns in a single security within a week is required to maintain a minimum equity of $25,000 in their brokerage account.
But a futures trader is not required to meet this minimum account size. In fact, as long as you maintain the minimum margin requirements for your positions, you can trade as frequently as you like at a size suitable to your trading needs.
Margin
An equity trader can only trade up to four times their maintenance margin excess on an intra-day basis. So if they have $30,000 maintenance excess available, they can only trade up to a value of $120,000. Exceed this amount and margin calls may further limit buying power and trading frequency.
With futures, that same margin may afford you the ability to trade a much larger notional value.
No Short Sale Restrictions
Another common struggle for equity day traders is that in order to short a security, there must be shares available to trade. And there are many reasons why shares may not be available.
In comparison, a futures trader does not have the same short sale restrictions. You can take a short position as easily as a long position.
Minimum Tick
When a trader shorts a stock, they are required to sell at a minimum of a tick above last traded price. This means in a down-trending market, an equity trader may never get to take a short position, thus losing out on a market opportunity. But futures trader can be short the market just as easily as being long.
Conclusion
As a futures trader, you can trade long or short multiple times a day or week and you do not have to worry about day trading restrictions applicable to equities or the ability to take a short position in the market.
