Insider’s Guide to Trading the e-Mini Futures

We have assembled 10 key trading tips that every e-Mini Futures trader should know. Here are the top 5, along with information on how to view the entire Insider’s Guide to ensure your success as a futures trader.

1.Time frames – There are certain times of day that are best to trade. In general, you can count on the first 2 – 3 hours of the trading day, after the New York markets open (9:30am EST) and the final 2+ hours of the day (2pm – 4:15pm EST) to yield the most consistent results. The midday can be rewarding but almost every time we’ve reviewed trading results, you end up with much more work and effort for a lot less return during the midday.

2.Trend and Chop – Markets will oscillate up and down much more often than trend. If you trade a method that succeeds only during trending markets you’ll have the occasional big day, but any review of the markets will show that the markets chop and churn more than they trend. Be sure your trading method does not thrive only in a trending market, and watch for signal services or strategies that make it a habit of showing you how great it does on those big moves up or down. Those are the easiest markets to trade – you hardly need a system for that.

3.Market Context – Know the “Average Trading Range”/ATR of the market you are trading and compare it to the norms. This is important because many systems/strategies will have fixed targets and stops. This is fine since you probably will not need to fine-tune these that often (though you should on occasion, as market conditions and levels change substantially.) However, your expectations are going to be different when a market is trading at 50% of its normal trading range vs. 150% of its normal trading range. When you start to see some real variance from the norm, that is the time you are going to want to adjust your targets and stops to accommodate. For example, if the average trading range in a market over time is 10 points but it drops to 6 or 7 you can bet your normal expected targets are going to consistently “just miss” – it’s very important to know the overall context of the market you are trading.

4.Trading the News – You should always be aware of major economic news. There are many economic calendars available on the Internet. One of the most comprehensive that also rates the expected volatility is:

Don’t worry that it says Forex if you are trading futures. The idea there is that you should know the major reports – and keep in mind that if you take a trade right at the same time as a release is coming out, you’ve gone from a predictable trade per your system to a completely random event. We’re personally not against trading in front of or after the news, or even holding through the news assuming you have set target/stops, but markets love to pull a complete “180” reversal right at the release, and trading right into that event typically puts the odds well against you.

5.Key Numbers – Always watch round numbers. Human psychology has traders doing exactly the wrong things around round numbers. What we mean by that is entering a buy just below a major round number such as a 1400, 1500, 1600. This can even extend down to “0” and “5” levels such as 1405, 1410, 1415. Be aware that markets have an uncanny way of stopping at these levels and reversing – you cannot adjust for every potential resistance/support point but again, just like with news you should adjust your entries and/or exits if they happen to fall right in line with a key round number. That small extra adjustment will make all the difference for you.

Be sure to get the rest of this Insider’s Guide here: