Day Trading Eminis – For The Newbies

In the exciting industry of day trading, eminis have turned out to be a vastly preferred and profitable kind of trading. But what is it exactly and why has it become so preferred?

E minis are a method that’s used to trade an index such as the S&P500 but on a significantly smaller scale than trading the index themselves. An e mini lets you to get into the index contract at a fraction (about one fifth) of the price of the full contract. That can make trading them affordable to a lot of more personal investors/traders and has allowed the market to really open up.

So besides becoming more reasonably priced to the day trader, here are some other aspects which make day trading e minis so appealing:

* Online Trading – Emini’s are traded online

* Almost 24 hrs each day – can be traded 23.5 hrs per day, 5 days per week (having said that the market is a lot more volatile and liquid in the course of the regular US trading hrs.

* Volatility and Liquidity – with the substantial volume being traded on the market every single day, the market is both volatile and liquid.

* Low Brokerage Charges – with trading being online there is no necessity for human intervention when placing trades. There are a lot of online brokerage companies who have the software packages and technology to place your bids, stops and sell instructions at the click of a button.

* Leveraged Product – being a leveraged product means that you pay a relatively small amount but reap the benefits of a ‘big’ contract. So any little gains you make can translate into big profits. Nevertheless, by the same token, any little losses you make can also translate into large financial losses.

Even though day trading eminis is now open to a much bigger group of investors, it’s still not a beginner’s game. You need to get training on how to trade the emini market and you definitely need to make sure you practice by paper trading first. Yes there is a lot of income to be produced in day trading eminis but there’s also a lot of cash to be lost! Don’t leap into it without first understanding what you’re doing.

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