Posted by forex at 6:42 AM
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Decide What to Trade
1. Trading E-mini futures gives investors exposure to many financial vehicles. Choosing between bonds, indexes and commodities can be confusing to those new to futures. Commit some time to studying a couple of the products you think you might want to trade; getting a handle on these instruments is essential to your success.
2. Understand what you're trading. Trading the Dow E-mini means trading index futures on the Dow Jones Industrial Average. Remember there are E-mini futures available for other indexes as well, such as the Nasdaq and S&P 500. Keep a list of the various ticker symbols near your trading computer or on your quote screen.
3. Know your broker's margin requirements. Putting up your own trading capital is a reality of trading any product, but some brokers have different margin requirements than others. Trading E-mini futures means each contract you trade is roughly equivalent to 10 percent of a standard futures contract in dollar terms, but your margin, or the available cash you must have on hand in your account, must be sufficient to cover the cost of your trade. Ask your brokerage firm what its margin requirements are for E-minis you want to trade.
4. Use stop-loss orders. Futures move quickly and can be extremely volatile. E-minis are no different and traders should set a stop-loss order after entering every trade. Using stop-loss orders prevents huge losses and keeps you from having to manually get out of a trade, which can be difficult at times of brisk market activity. Using stop-losses is something nearly every successful trader does.
5. Find a demo account to test your strategies prior to trading for real money. Ask your brokerage firm if it offers demo or simulated accounts.