is the dow a cash cow in the emini futures market?
July 14, 2011 at 1:44 AM What are E-Mini Dow Futures?
The emini Dow futures contract trades at five dollar increments for each point. How could that possibly be a cash cow when the S&P emini pays $50 per point? For starters, the e-mini dow futures are more accessible to newer traders with smaller accounts who are very often nervous about trading the other index futures contracts. However, traders soon learn what they use to be successful in other index futures markets actually works in the e-mini dow futures market as well.
Why? There are multiple reasons but one very simple - 30 components pushing and pulling versus 500 in the S&P Emini. There is less channelling back and forth and more trending flow. Once a move is underway on the e-mini dow, it tends to move to its target in a more directional manner with far less backing and filling which means less chance of getting stopped out with a trailing stop.
A Proven Trading System
Until such time that a trader has the experience and knowledge to design and implement their own systems, a proven emini trading system with a true statistical edge is recommended. Traders use different types of e-mini systems, with many building their own system based on indicators and chart patterns that have proven to be successful for them, while others utilize systems developed by others. Make sure the system you use is both proven and ethical. Better yet, find a system where you own the indicators and over time time you can use them as building blocks to create a high probability set-up that fits both your personality and risk profile.
The e-mini dow is not quite as volatile as the other emini futures contracts. Once new traders learn that in order to be successful at futures trading they need a system in place that eliminates human emotion, they seek out proven trading systems used by others. When the YM or e-mini dow contract was introduced a few years ago, many futures traders moved to it and have turned it into their very own cash cow. Over the course of a day, the e-mini dow futures will make many 20+ point moves. If your high probability trade setup can identify those moves and take just 10 points out of the middle of the move, you will find yourself in an enviable position that many traders never find.
Trading The Dow For Daily Income
A 10 point trade 2 times a day can become a considerable amount of daily income as you gain confidence and increase the number of contracts you comfortably trade. 10 points on 1 contract only pays $50.00. That same move on 10 contracts pays $500.00. Always start with 1 contract and let your market earnings increase the size you trade. If you are disciplined and emotionally detached, over a period of years you might find yourself in a position to trade as many as 50 or 100 contracts. Go slow. Let the market give you your pay raise.
A proven system, designed by successful traders can be the key to success as the new trader learns the dynamics of the market and gains the expertise that will allow them to design and develop their own system based on their personality and risk tolerance levels. Proven systems will alert you when possible profitable trade setups are signaled by the market. Proven systems are used by professional traders to compete and win in the index futures market on a daily basis.
Learn to trade the Emini Dow
If you want to become a professional e-mini dow futures trader who trades for daily income, pick the right system. Make sure you get a free trial that allows you to not only follow and learn the setups, but also one that provides a demo platform which allows you to place those trades in a simulated environment in real time. In today's competitive market a reputable vendor will make this available at no charge.
Make sure it works, make sure you understand it, and the e-mini dow just might become your cash cow.
Dow, day trading system, learn to trade emin 
Reader Comments (14)
I am new to trading. Which e-mini is the best one to start with?
The Dow e-mini is only $5 per point according to your article. Can a person make a living like that?
Daniel,
While most people are drawn to the S&P 500 e-mini, I recommend the YM Dow e-mini to someone just starting out.
Blessings
DeWayne
Michael,
The numbers can be a bit misleading. The S&P e-mini pays $50 per point. The Dow e-mini pays $5 per point. 1 point in the S&P is equal to 10 points in the Dow. What I mean by this is, when you hear the news say the Dow was up 100 points today, you will also hear the S&P was up 10 on average. In other words there is a 10 to 1 average ration both in price movement and in the amount earned per point from trading.
The real key is the number of contracts traded. If you trade 1 contract on the YM, 10 points = $50. If you trade 10 contracts, the same 10 points now = $500. Take the free trial http://cfrn.net/apply and I will show you exactly how it works.
Blessings
DeWayne
I trade options now but would like to learn to trade the e-mini. Since I already have experience trading, how long will it take me to learn?
Are you a broker?
I have seen on your site "round-turn commission". What does that mean? Can you explain? Is it like a stock broker commission?
Ashley,
How much experience do you have with trading options? Have you had positive results overall? Are you using a method of technical analysis or more of a fundamental approach?
The amount of time it takes to learn e-mini futures trading is different for each person. If your option trading experience has already taught you to distance yourself from your emotions when making trading decisions, then the learning curve could be relatively short for you.
While it would appear on the surface that all trading experience would be beneficial, such is not the case. When we work with someone who has no trading experience, we start with a clean slate. Experienced traders often have what I call baggage. Negative baggage in some cases. Before they can learn, they have to first "unlearn" potentially bad habits they have acquired.
Each situation is unique so I encourage you to take the 1 Week Free Trial and see how much difference there is. For you, it could be just as short walk. The free trial in our e-mini live trading room really is free, no catches.. so give it a shot.
Blessings
DeWayne
Emma,
NO we are not e-mini brokers. We are an educational firm, or an Emini Trading School is how we are often referred to. We do work with Daniels Trading and we do recommend them to all of our students. You can speak with Burt or Leslie by calling 866-928-3310.
They offer extremely competitive commissions and they themselves are very experienced e-mini traders. When you have a question, need, or problem, they don't have to refer to a manual...... they are the manual. If you become a client of Daniels Trading we do not receive any form of finders fee or financial compensation. We also do not receive any type of kick back on the commissions you pay. This type of arrangement is perfectly legal as long as it is properly disclosed. However, to maintain our fiduciary integrity we choose not to participate in such a relationship.
They will work very hard to earn your e-mini trading and options business and even harder to keep it. For a no obligation chat call 866-928-3310.
Blessings
DeWayne Reeves
Madison,
In the world of e-mini futures trading, "round turn" describes the money you pay to get into a position and also the commission you pay to get out of the position.
When you see a commercial on T.V. that advertises stock trading via a stock broker, the dollar amount quoted is for a one way ticket. With E-trade for example, I think you pay $10 per trade based on the last commercial I saw. That would be $10 to buy X number of shares in a particular company. You might keep those shares one day or one year, (or a hundred years), but eventually to realize your gain, you must sell the shares. When you sell, you will then pay whatever the going rate is for a 1 way ticket.
Because stock transactions tend to be for longer periods of time, they are quoted as a one way ticket - $10. Since E-mini futures and futures contracts in general are typically for a much shorter time frame - hours or days, that commission is quoted as a 2 -way ticket. When you see $7 round turn advertised, you are paying $3.50 per contract to get into the trade, and $3.50 per contract to get out of the trade.
To get quotes on the rates currently being offered to CFRN Partners, call Burt @ 866-928-3310. There are different rates for self directed trades and broker assisted trades. Talk to Burt and he will explain the difference to you.
Blessings
DeWayne
If the S&P e-mini is $50 per point that is better than $5 per point right? Why do you like the Dow better?
How much does your emini trading system cost?
Zoe,
I wouldn't say I like the Dow E-mini better, for new traders though, I believe the smaller per tick dollar amount and also the tendency of the YM E-mini to trend can be helpful for those just getting started. Ultimately it comes down to a matter of personal preference. Our trading strategy works on all markets so it's really just a matter of learning the trade and finding the market that best suits you.
DeWayne
Mia,
Send me an email and I will provide you with a breakdown of exactly what we offer. We do offer payment plans for those who qualify and we also have a tuition reimbursement plan. You can check out htp://cfrn.net/become-a-partner . The video training library for E-mini Traders now contains over 250 hours of Live E-mini Trading and over 250 hours of E-mini Training conducted with real students just like you.
DeWayne