Day Trading Strategies Emini Futures (2024)

Find the best day trading strategies Emini futures, some secrets and techniques that can turn your trading around. This trading course will teach you one of our best Emini strategiesdeveloped by a 35-year veteran trader. Our strategically developed trading systems have proven to be very effective, don’t expect anything less with our newly Emini futures trading strategy.

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Is trading E-mini Futures harder than individual stocks?

In general, you’ll find that there are only a few Emini trading strategies that work. The Emini S&P 500 futures have its own unique personality. It’s no surprise that the Emini contract tends to exhibit unique price patterns and generate different levels of volatility. But the law of supply and demand that governs the price is the same as with trading stocks, Forex currencies, commodities, and cryptocurrencies.

Learn more about the best practices of the futures market with our Futures Trading Strategies guide.

Want to learn Emini day trading techniques?

Moving forward, we’re going to reveal more information about how

E-mini futures work the same as any other financial futures contract. But, the Emini S&P 500 has its own contract specifications. The E-mini contract specs can be seen in the figure above and summarized below:

• Emini S&P 500 futures contract trades Sunday through Friday from 6:00 PM to 5:00 PM ET with daily trading halts from 4:15 PM to 4:30 PM.
• A single ES contract has a value of $50 x S&P 500 Index.
• Emini futures trades in increments point of 0.25.
• The dollar value of one tick is $12.50.
• The Emini futures contract expires every quarter (March, June, September, and December).

Once you know the basics you can develop your own free Emini trading strategies.

The E-mini is 1/5 the value of the standard stock index futures contract. So, for example, if the S&P 500 is trading at 2,900 then the market value of a futures contract is 2,900 X $50 or $145,000.

Like with all futures contracts, you’re trading Emini on margin. And trading on margin allows you to control much larger sums of money than your initial deposit.

Let’s now see why big institutions, hedge funds, and the banks prefer to trade Emini.

See below:

The main reason to trade the Emini strategy is to have a diversified exposure to the US stock market. While Emini futures are more suitable for day trading they offer several advantages for swing traders as well.

Other reasons to trade the ES contract are:

• You can go both long and short. Unlike stock trading, there is no uptick rule when shorting the Emini contract.
• Trading around the clock 24-hours per day. This is extremely attractive as you can trade Emini futures around the world. You can also take advantage of the overnight Emini price swings.
• Tight bid/ask spreads. The large traded volume through the Emini contract offers cheap costs to enter and exit a trade.
• The SPX is traded on a centralized exchange (the CME), which often can translate into much clear technical chart pattern that is unique.

Let’s now have a look at why day trading is more fitting for trading Emini futures?

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Day trading Emini offers the most attractive intraday opportunities. The availability of leverage and the low barriers to enter the Emini market suggests scalping Emini is better than long-term investing. Eliminating the risk associated with holding positions overnight, makes scalping the Emini contract a better strategy.

Scalping Emini offers traders to be in and out of the market very quickly. So, you can capitalize on small price movements on a daily basis. However, scalping is not for everyone as it requires mental toughness and a high level of discipline. That’s the key to longevity, especially when trading a unique market like the ES market.

The best Emini trading tip for scalping is to always use a technical indicator with small periods. What we mean by this is instead of using the default 14-period setting for the Williams %R indicator, you should use a 4-period (see chart below).

The 4-period %R is faster, thus generating more trading signals. A 14-period %R would be ineffective if you try scalping Emini futures. Aligning your trading style with these technical indicators used is a key element if you want to develop Emini trading strategies that work.

Let’s now explore what S&P Emini trading strategies are more suitable for this futures contract.

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ES traders have several different futures trading strategies at their disposal to use for different types of market environments. But you need to have the right tools to use Emini futures trading strategies successfully.

In order for a trading strategy to work and give you an edge, you need the right type of market environment. For example, if the Emini price is experiencing a strong trend, scalping the market and trying to catch a reversal can be a dangerous game.

On the other hand, if the Emini market is ranging it’s futile to try to capture a trend.

That’s the reason why you need to be aware of the different types of free Emini trading strategies that can give you an edge in different types of market environments.

Typically, we can distinguish five categories of Emini trading strategies that can help you successfully day trade the ES contract:

• Event-Driven Strategy
• Time and Calendar Strategies
• Trend Following Strategies
• Breakout and Momentum Strategies

Let’s break down these strategies and see how effective they can be.

See below:

Event-Driven Emini Strategy

While the event-driven strategies are more popular among sophisticated investors like hedge funds, nowadays they are also very popular among retail investors. Initially, event-driven strategies (news trading strategies) looked to exploit pricing inefficiencies before corporate news.

However, these days event-driven trading encompasses a much broader spectrum of event risks. Basically, any macro risk event that can be the catalyst for disturbing the market volatility can generate an attractive profit.

For example, taking into consideration the ongoing US-China trade war, we can observe how E-mini futures rallied to a 1-month high on easing tensions between the most powerful economies in the world.

Learn how to implement successful strategies for commodity trading amid the ongoing US-China trade war.

Time and Calendar Strategies for Emini

These types of Emini strategies are constructed on time irregularities. The Emini futures contract has a distinct time of day behavior and some days of the week tends to exhibit the same type of price behavior. For example, on Tuesdays Emini S&P 500 futures tend to rally, which is way on Wall Street traders often use the phrase “Turnaround Tuesday.”

Also, trading activity is not evenly distributed throughout the day. Usually, at the open, there is more trading activity as the smart money is working their inventories. But in the afternoon the volume slows down and by the end of the day, we can notice more trading activity as traders are assessing their positions.

Emini Trend Following Strategies

The Emini trend following strategy is probably the most powerful. Trend following has the potential to generate the biggest profits. One of the greatest traders of all time Jesse Livermore said that the big money is always made on the big market swings.

We have identified two parameters that can be used to determine when we’re going to have a strong trading day:

1. Strong trend trading days come after small daily range bars.
2. Both the closing and the opening Emini prices close near the high and the low of the day.

These Emini price characteristics need to be used in conjunction with other technical tools. It is a simple Emini pattern that can be used to develop a trading strategy around it.

Emini Breakout and Momentum Strategies

Profiting from breakouts and momentum trading is a favorite trading approach among Emini day traders. Emini momentum strategies often rely on capitalizing on a spike in momentum (order flow) activity. That’s the reason why Emini momentum strategies work best during times of increased volatility.

Similar to momentum trading strategies, Emini breakout strategies can offer many opportunities to maximize your profits. Emini breakout traders can capture trades with a good risk to reward ratio. A trend always starts from a breakout so this approach can also lead to possibly capture a trend.

The anatomy of trading breakouts can be summarized by Emini price breaking a key support or resistance level (see Emini chart below).

Emini breakouts usually follow after periods of tight congestions and as stated previously, they can lead to trend development.

As you can see the Emini futures market is very tempting as there are numerous trading opportunities. However, trading the Emini market without losing your hard-earned capital is a little bit harder. That’s why in order to increase your chances of successfully day trading Emini, we’re going to share the best Emini trading strategy.

With this approach, you can build another stream of income.

Let’s get started!

The only way you make money in the market is if you’re able to catch a trend. It doesn’t matter if you’re a day trader or a swing trader. In order to make a profit day trading the 5-minute time frame, you need an intraday trend to secure a profit. The same is true for long-term traders. Click here to learn more about Swing Trading Strategies.

The best Emini trading strategy requires to hold your trades to the close. Don’t try to get in and out scalping ES futures because when you have a loss most likely it will eat all the previous profits. Instead, try to catch a trend move and hold it to the close.

With this approach, you’ll make a lot more money because during the trend days the Emini contract tends to close near the high for bullish candles. The same is true for all large bearish range day, which closes near the low of the candle.

Go study your Emini chart and you’ll see this repeating pattern over and over again. Some research suggests that when the Emini futures close in the top 10% of its range, it has an 80% chance of follow-through the next day

The Emini price chart below displays this re-occurring pattern:

This Emini chart pattern is powerful enough that you can trade it in isolation. However, adding other technical tools to confirm the Emini trade signal will only improve the system.

In summary, the Emini futures trading strategies will give you the chance to take advantage of the best trading signals. This strategy will also keep you out of the choppy consolidations. There are plenty of ways to use the day trading strategies with Emini futures, but there are only a few exploitable trading edges in the market. That’s why we encourage you to create your own trading plan once you discover what works for you the best.

In this article, our team at Trading Strategy Guides will show you how to design the best trading plan strategy.

Last but not least you can’t overlook the importance of risk management even if you use the best Emini strategy. It’s vital to have a firm understanding of risk management otherwise you’re going to end up blowing your account. The rule of thumb is to never risk more than 2% of your balance.

Thank you for reading!

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