I get contacted by newbies time and again. And while I have written quite a number of articles just for them (see my site for more), one more is unlikely to do any more damage, although damage is really not my goal here.
The very basic things you need to become an e-mini futures trader, or specifically (as that is what most people are interested in) an e-mini day trader, are as follows.
1. The ABBA thing (“money, money, money”) – or the starting capital.
You need about $5,000 for a good and confident start. That’s the money you should be able to afford to lose without affecting your lifestyle in any negative way or else you are better off to keep it in your savings or even checking account. If you cannot afford this loss, your trading will be adversely affected by the very thought of losing it and hence not very effective, certainly not optimal.
2. The e-mini brokerage account.
Most brokers who cater for e-mini day traders do not require more than $3,000 to open an account with them, but it’s also important that they offer good commissions for e-minis. These days this means commissions lower than $5.00 round turn at the very minimum, and the closer to $4.00 they are, the better. Brokers who cannot offered competitive commissions should be avoided. I am not big on the brokers who expect you to negotiate commissions with them depending usually on how much contracts you trade a month, but if you choose to do so, be extra demanding.
3. The charting and trading platforms.
These days they are often combined as is the case, for instance, with NinjaTrader or Sierra Chart, but that does not have to be case. I use Bracket Trader as my trading platform and Sierra Chart as my charting platform, and that suits me just fine. Many e-mini brokers offer trading using NinjaTrader and some offer trading via Sierra Chart.
4. The trading simulator.
The trading simulator is an important tool that lets you practice before you commit to actual live trading. It is advisable that you trade on the simulator in real-time as opposed to trading using a playback function that some simulator may offer. Such trading simulators are a standard part of the trading platform and often come with charting platforms as mentioned earlier.
5. The trading methodology.
The trading methodology is a set of trading ideas and methods that allow you to make money in the markets. KING, an e-mini trading course and my flagship product at this point, is an example of such a thing. You can come up with your own ideas and strategies which would require you to do your own research or you can purchase a trading levitra 5 mg methodology from another trader. There are many things like that on the market, being sold as trading courses, strategies or systems, but keep in mind that unless your methodology has been tested in various market conditions and performed well, you should not put much faith in it. In fact, you probably will not be able to do so which will have the same effect on your trading as being undercapitalized or trading with the money you cannot afford to lose.
It is important to have faith in your trading methods, so if you decide to purchase them, be sure they come with some evidence of good performance. Don’t buy into training services unless the trainers themselves have demonstrated their trading prowess in a consistent manner. Learning trading from a marketer who offers no evidence that he can turn his trading ideas into money (even in a simulated environment) is not the same as learning trading from a trader that has been able to so in a consistent manner.
6. Commitment to practice.
Practice along with the good trading methodology is what your success as an e-mini day trader depends most heavily on, other things, of somewhat technical nature, mentioned earlier, notwithstanding. Without practice or the right, winning trading methods, you stand no chance in this very competitive field.
It is important to practice as often as possible, preferably every day, or at least 3-4 days a week, 2-4 hours at a time. Practicing longer than 4 hours a day may not necessarily be better. During your practice you want to take at least a few trades, 4-6, at the very minimum.
It is equally important to stick to your methodology. Don’t get distracted by what others are talking about. Don’t pay attention to the negative chatter on trading forums. Stick to your guns. Ultimately, it’s you against the rest of the world. Trading is a very solitary pursuit and those you cannot accept it may not be the best candidates for the day traders.