E-minin Trading Tips: Recognizing Investors

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One of the beauties of trading the e-mini futures is the sheer number of different styles being traded. Each investor or trader is in the market for their own specific reasons and those affect how price action behaves. A key skill for any trader looking to profit in these markets is understanding who else in the market at any given time. Knowing and recognizing the emotions and psychological pressures that various participants are going to be under allows traders to identify areas where they can put pressure on the opposition and thereby increase their own trading profits.

So what are the possible calls to action a trader can make inside the markets?

1. Entering a New Position

Traders have to initiate a position in order to profit from it. The easiest behaviour for a newer trader to understand is action in the markets based on a new position acquisition. Trades can either buy contracts to enter a new position or sell contracts (go short) to enter a new position.

2. Taking Profits

When trades go well there are going to be traders looking to exit their positions for profits. If they are long they will need to sell. Too much profit taking and the market will appear as though it is selling off when in fact it is still going strong. Being able to recognize the difference between a sell off and profit taking will immediately improve your results in the markets.

3. Stops Being Hit

This is usually the most violent market behaviour. When stops are hit it can have major effects on price action, especially in the e-mini markets. Stops are just market orders used to protect investment and minimize risk. Recognizing stops being hit is the number one goal of a scalp trader. As stops get hit you can capitalize on short term market exhaustion by scalping in the opposite direction.

Price action on the e-minis is unlike any other financial market. Stops and covering are a major part of why price moves and the patterns that makes up an intraday chart. Knowing who is looking to operate at which levels can allow a smart trader to fully optimize the opportunities that present themselves.

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E-mini Trading: The European Session

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E-mini traders can enjoy the flexibility of trading outside of standard US market hours. Traders can benefit by entering or exiting positions during the “After Hours” session if there is breaking news or a new economic development announced. Traders can also take advantage of other markets opening around the world. The most consistent time to trade the After Hours session is during the European market opening.

The After Hours session is notoriously slow trading and the action only really picks up during the European market opening. The e-mini market plays very effectively off important technical levels during that time and if you watch that time period carefully you will notice that more often than not the best time to enter the overnight move is during the euro opening.

What makes the European open so great for e-mini traders?

Good Participation

Never underestimate the value that big institutions bring to the markets. Big money = intelligent trading. They trade off of important technical levels and they have the ability, with their trading capital, to move markets. Retail traders who can recognize institutional participation have their first chance at capitalizing on their movement during the European open as they tend to not participate in the slower after hours sessions.

Low Market Orders

Unlike the US session opening, the European open is much less violent in terms of price action swings. Market orders are the minority and that means limit orders control price movement. Any time there is a limit order there is a pre-determined intelligent (at least in theory) trade being placed. Solid technical traders in the markets mean more predictable price action.

Overnight Moves

The E-mini S&P 500 has a tendency to move very slowly in the overnight session and will maintain price movement from the previous day’s closing action. The European Open is often the first chance a trader can get in on the overnight move as the trades will often set up in the first 30 minutes of the European session. Price action will see decent movement depending on the day before returning to the slow grind that usually finishes of the overnight session.

If you are going to look to trade the e-minis after US market hours, you can save yourself a lot of time and energy, by focusing only on the market after the European open. Good traders know that there is nothing more frustrating than watching a slow market and to keep yourself out of trouble you should optimize your time in the markets to the periods of heaviest volume. The European session offers the volume necessary to get some decent trades off.

Take advantage of inexperienced traders using a few specific trade set ups. Commodities Trading Trade for a living by understanding market price action. Trade for a living by understanding market price action.

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Trade The E-minis: Negotiate Market Flows Like A Pro

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The e-mini markets are controlled by the collective human emotion which operates within its controlled environment. Outside forces that effect humans therefore, affects the markets. Weather changes and the seasonal changes can mean markets change for better or worse. Experienced traders know that different market conditions call for different approaches to trading.

E-mini markets are not unlike any other financial markets around the world. They operate inside a number of different market cycles. There are intraday cycles, daily cycles, weekly cycles, and so on. Each cycle has its place and goes through its own maturation process. Understanding how each cycle affects the next and the results in price action can be instrumental in establishing a trader’s presence in the markets.

One of the biggest cycles we use to gauge our participation in the markets has to be the seasonal cycle. Each of the four seasons brings with it a new dynamic to the market. The changes in market conditions can be exploited if a diligent trader has done his or her homework and is ready for it. So lets look at the different seasons and what they mean to the e-mini markets.

Winter

Cold, barren, and unforgiving are the terms that come to mind when thinking of the markets during the winter months. Big money and fund managers slow initiating new positions as the temperature around the country drops. Trading is slow and often range bound for months at a time. Short term traders should focus on minimizing risk and be patient for quality set ups. It is very easy to over trade in range bound markets.

Spring

New life brings new trades and spring time is often referred to as the heart of the trading year. Major participation and good volume means large trading ranges and plenty of opportunities to establish solid positions across the markets. Good traders will earn the majority of their trading profits for the year in the 4 months of spring. Knowing the conditions to expect ahead of time allows traders to concentrate and focus heavily on their trading during this time to ensure they get the most out of it.

Summer

Capital preservation is the major headlines during the summertime. Trading during the summer, especially intraday trading, is often a test of trader’s patience. Volume and volatility come to a screeching halt as institutions and major funds put the brakes on going into the warmer weather periods. July and August are the worst as traders take advantage of the slow markets to go on vacation which results in even slower markets. Do yourself a favour and don’t get too anxious to trade during the summer and you can save yourself a lot of commissions.

Fall

As traders come back from vacation the markets are lifted with a sense of optimism. Trading during the fall is much like spring trading. Ranges are often blown out and serious moves that would have taken weeks during the summer months can happen in days. Going into the end of the year traders who are up on the year can afford to take on extra risk and traders with a net loss are desperate to turn it round before the new year. Focus on quality set ups and you can find success in the fall markets.

The markets operate in cyclical patterns and as a trader you need to be aware of where the market is coming from as a whole. The collective sum of the human emotions playing out in the markets can show the astute trader whether or not they should be in the market. Learn to take advantage of the information available to you and you will see improvements in your P&L.

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E-mini Trading: Learn From Your Bad Trades

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Traders aren’t always the best at accepting the fact that they were wrong. In fact, it is one of the biggest problems with unsuccessful traders in the e-mini markets. Being wrong isn’t a problem unless you let it be. A trader has to maintain rational thinking in order to get the best results and if you let your emotions run unchecked more often than not one bad trade can spiral into a series of major drawdowns.

So how do you develop the ability to cut your losses and move onto the next trade without being psychologically affected by it? Confidence tin your system is what allows you to accept losses as a natural part of participating in the financial markets. If you have confidence in your system and your system is built with the idea that normal losses will occur from time to time then there is no reason to dwell on unsuccessful trades.

Here are a few things you can do to make sure you aren’t letting your negative trades affect you trading mindset.

1. Have A Plan

It may seem obvious but the only way you can have confidence in a plan is to have the actual plan itself. Sit down and right out your trading strategy and plan for making money in the markets before you place another trade. You should know exactly what trades you are going to take and which signals you are going to ignore. Having a well calculated plan is one of the keys to a trader’s success.

2. Turn Your Losses Around

Losses don’t have to be 100% negative. Goo traders use their losses to expand their trading knowledge and refocus their trading strategies. Go over your losses and analyse what happened. Did you fail or did your plan fail? Did you follow your rules or did you stray from them? Analysing your losses will allow you to see how your trading is progressing and keep you from getting complacent with your results.

3. Motivation

Don’t misinterpret what losses should mean to a successful trader. You should never been unaffected by losses. If you are you aren’t pushing yourself hard enough. The idea is not to completely disregard losses but rather to use them to your advantage and learn to grow from them. Channel the anger and disappoint you feel after a bad trade and use it to heighten your focus and awareness for the next set up. Use the tools that you have available to you in order to get the job done.

Losses are going to happen in e-mini trading and the quicker you realize that the better off you will be. Profitable trading isn’t always about being correct in every decision you make but rather, it comes down to be persistent and optimizing your trades when they do go well. The old adage to cut your losses and let your winners run has been around since the beginning of trading and for good reason. Don’t let your losses dictate the way you trade and your account will thank you for it.

Get more positive results now. Enjoy profitable e-mini trading today. Learn Forex Don’t let negative trades ruin your confidence.

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Commodities Trading Advantages: Develop The Abilities Immediately

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A common misconception about the e-mini markets is that an individual, who has never traded before, can open an account, develop a strategy using various lagging indicators, and get immediate results. There seems to be an overwhelming number of people who don’t quite grasp the concept that trading is a skill. Anyone can lean it but very few have the patience and discipline to master it.

Common sense seems to be thrown aside by folks looking to get started trading the futures markets. The futures are the professional financial centres of the global economy. The participants are well trained and vastly experienced in what they do. It is incredibly nave to think that someone with no knowledge or experience is going to be successful. Is profitable e-mini trading impossible? No of course not but you need to go about developing your skill just like you would for any other activity.

So how can you go about developing the skills necessary to profitably trade the e-mini markets?

1. A Trading Course

Do what any junior trader starting out in the institutional trading world has to do, take a course. Big banks train their traders to read the markets by pushing them through a series of specific market courses. As an engineer goes to college to learn the skills necessary so a trader goes through courses to understand what they need to do to become successful. Technology allows for you to find courses that can be delivered over the Internet sending audio and video tutorials right to your desktop.

2. A Trading Room

Most trading rooms are terrible. Most trading rooms are over priced and offer very little value. You need to be careful about who you let teach you how to trade. Do your research. If you are just starting out trading rooms can be a good place to interact with others and exchange ideas and practices. Even if you don’t trade the same system as they do in the room it will allow you to see the market from a different perspective. Once you do get educated though stay away from trading rooms as they can cloud your decision-making skills.

3. A Trading Mentor

Trading mentors are very much like trading rooms in the sense that if you aren’t careful in your selection you can end up doing your trading more harm than good. Again, a trading mentor is all about broadening your horizons. Try to understand why they get in and out of positions. What factors identify possible trade set-ups for that individual? The more angles you can see the market from the better.

A trader just starting out e-mini trading should do everything in their power necessary to get access to quality education. Trading knowledge will set you apart from your peers and, if you start early enough in your trading career, may save your account. Do yourself a favour and get as much education as you can before you start live trading. You will thank me for it later.

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