is the dow a cash cow in the emini futures market?

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.