Emini Trading Blog

Many would-be day traders of e-mini S&P futures or any other market yearn for a “magic formula”, an epiphany that in a short time would bring handsome profits with minimal effort. Perhaps you wonder if such a thing exists. At first glance the answer appears to be yes. If you have watched or read a play-by-play account of an expert trader executing a trade, you have seen uncommonly difficult choices carried out with reflex speed and apparent ease.

Since the entire trade is handled in a seamless fashion with a winning result, it appears that such a formula may be what this winnig trader possesses. However, the truth is here is no such thing. Instead, this ability, like all abilities, is developed over time through trial and error. It is practiced and enhanced through deliberate effort, and administered by self-coaching and mentoring.  Only after consistently focusing on acquiring skills essential to profitable trading can the expertise needed to day trade for a living and subsequent financial success be found.
 
Part II: SKILLS NEEDED

Our review of the skills needed to succeed as day traders is divided into two parts:

1. Recognizing trade opportunities
2. Profiting from opportunities.

RECOGNIZING TRADE OPPORTUNITIES

Recognizing viable trade opportunities starts with the essential skill of knowing the trend of the market within the time-frame from which we base our trade decisions. Trading with the trend is highly advisable – especially for beginners. You must be trained to know which highs and which lows are most significant. Without this skill it is likely you will initiate trades with a higher probability of losing than winning!

On a scale of 1-10, what is your present understanding of trading concepts such as support/resistance, Fibonacci ratios, price action and the impact these have on price behavior? Write down your answers. 

Little else aids profitability like not losing. Unforeseen, sudden and drastic changes in price can happen at any time. Therefore, you must set a limit for the risk you will bear. First determine the most advisable stop-loss price for the trade you are considering. Now base your entry-price off that price. Doing so will likely lessen the frequency with which your stops are hit, and perhaps minimize the distance between your entry and stop-loss prices.

PROFITING FROM TRADE OPPORTUNITIES

Don’t rationalize. Don’t hold a trade that began as a day-trade for an extended period. Rather,  protect profits via stop-loss adjustments and stick to your exit target rules.  Don’t let winning trades turn into losers!

Next time we’ll look at the money needed to day trade successfully.