Find an Emini Broker
...who comes with impeccable references. Of course they must have the proper credentials, licensing etc... but more than anything, your Emini Broker should be someone you can build a long term relationship with. This relationship is second only to your marriage if you plan to "trade for a living".
When it comes to money, this person will know more about you and your finances than possibly even your spouse. I don't want to sound creepy, but it gets a bit intimate. Take the time to make the right decision. The payoff is well worth it.
Is Your Broker Also An Emini or Options Trader?
Aren't they all? Believe it or not, there are licensed Emini Brokers who do not trade. This becomes an issue when you have a problem or need help. You need someone who not only speaks "Broker-ese", you need someone who speaks the language of Emini Futures Trading. You want someone who understands what it feels like to be stuck in a trade. Someone who can help you actually learn how to trade. Someone who will spend time helping you learn to spot high probability trade set-ups.
How important are commissions?
There's an old saying "You get what you pay for". It's not true. Sometimes you don't get what you pay for. Of course you want to pay competitive rates, but do not make the mistake of basing such a critical business decision solely on a few dollars per round turn. There are many other, much more important factors to consider.
Keep in mind, Broker assisted trades do carry a higher commission rate than trades you place yourself. If you are a self-directed trader, make sure the Brokers you interview are aware of this.
Putting Emini Trading Commissions In Their Place
Consider this... if you have a daily goal to net 2 points a day from the S&P 500 Emini Futures (just an example), that works out to be $100 per contract traded. If you achieve your daily goal in one trade, we've already established your earnings for the day - $100 per contract. If you're paying $8 per round turn in commissions as a self-directed trader, that's easy enough to figure. It works out to be exactly 8% of your gross on that hypothetical picture perfect day.
Let's look at a different day. On day 2 it takes you 10 trades to net your 2 points. Believe me it happens. Choppy markets, slow to react, any number of conditions and reasons can contribute to a rough day. However, let's do the math. If it took you 10 trades on the rough day to net 2 points (your personal daily goal), how much did you earn? Remember, in our hypothetical scenario you are paying $8 per round turn in commissions. Got the answer? Show me... Nope!
You still made $100.
What? How's that possible? Pay attention... your goal was to "net" 2 points for the day. That means "after transaction costs". So on the hypothetical rough day, you still made your $100, the only difference is your Broker made $80 instead of $8. Let that sink in...
Over the years I've heard stock traders and emini traders complain about how the Brokers are getting rich and making all the money. Far from true! It's only true if you don't have a definable edge in the market.
Ask yourself a question right now - "Does my current trading strategy allow me the possibility of netting 2 points a day in 10 trades?"
Meet my broker
If the answer is no, not only do you need a Broker, you need an edge. What if you could find a Broker who would also work hard to help you find an edge? Now remember, no Broker can guarantee you success, just as no educational organization or training firm can guarantee you success. We can both teach you how to play baseball, but it's up to you to become a baseball player.
I would like to introduce you to my Broker. No catch, no obligation. I want you to meet him because I know how hard he will work to earn your busines. I also know how hard he will work to keep your business. Did I mention he's also a fine trader in his own right? He speaks our language, and on the days when I make $100 and he makes $80, I'm tickled pink. I stimulated the economy. I just put groceries on his table and helped him put away a few dollars for his girls college fund. How great is that?
Quite frankly, as long as I make my goal, whatever that is... I would love to see him make a grand a day off my back. Have you ever thought about it that way? How much energy have you burned up begrudging a fellow laborer his daily bread? Now don't get me wrong, the guy who doesn't return my calls, who doesn't know my kids names, who can't hear it in my voice when I'm a little down or off my game... I'm not interested in lining his pockets. However, when I go to work knowing that through focus, self discipline and perseverance, I'm not only taking care of my own family, I'm also making the world a little better place for someone else... life doesn't get much better than that.
Now let's clear the air.
I have no financial arrangement with my Broker to bring him new clients. I don't get a finders fee, nor do I get any share of the commissions you pay. Although such arrangements are perfectly legal if properly disclosed, we don't like to muddy the water. He's really good at what he does and we're pretty fair at what we do. So call me, 415-857-5654 and I'll arrange a phone call for you with my Broker.
Research the firm
...who will clear your business with the National Futures Association (NFA).
Carefully read
...all risk disclosure documents. Ask questions. Make sure you fully understand what you are signing. For more information visit the NFA website.
Important Day Trading Rules | Stocks - Futures - Options
