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Soultrader

Understanding Eminis: Beginner's Guide

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Two popular e-mini contracts:

  • E-mini S&P 500
  • Symbol: ES
  • Exchange: Chicago Mercantile Exchange (CME)
  • Value of 1 Tick: 0.25 = $12.50
  • Value of contract: $50 x S&P price = Value
  • Trading Hours: 5:30 pm Sunday to 3:15pm Friday (Central Time)
  • Contract Months: March, June, September, December
  • Last Trading Day: Up to 8:30 am on the 3rd Friday of contract month
  • E-mini NASDAQ 100
  • Symbol: NQ
  • Exchange: Chicago Mercantile Exchange (CME)
  • Value of 1 Tick: 0.50 = $10.00
  • Value of contract: $20 x NASDAQ price = Value
  • Trading Hours: 5:30 pm Sunday to 3:15pm Friday (Central Time)
  • Contract Months: March, June, September, December
  • Last Trading Day: Up to 8:30 am on the 3rd Friday of contract month

While the big S&P 500 contracts are traded in the pit using an open outcry auction system, the emini futures are traded in an electronic marketplace. This allows minimum slippage attracting smaller investors. Futures, unlike stocks, do not have a short selling rule on a uptick. This is a benefit for traders as well as the nice leverage one can get trading the emini's.

 

What are stock index futures?

 

A stock index represents a portfolio of stocks grouped accordingly. For example, the NASDAQ 100 index represents 100 companies while the S&P 500 index represents 500 large capitalization companies. The S&P 500 is also a benchmark used by money managers to measure their portfolio performance.

 

On the other hand, the mini-sized Dow futures contract represents only 30 stocks. Also known as the mini Dow, it is traded on the Chicago Board of Trade. Ticker symbol: YM.

 

Futures Contract Month Symbols:

 

Emini futures settle and expire on a quarterly cycle. The contract month, also known as the delivery month is the month in which the contract expires. Most traders switch contracts at the roll over date. This can easily be identified by looking at the liquidity. When traders migrate from one contract to the next, liquidity drops.

  • Contract Month Symbols
  • March: H
  • June: M
  • September: U
  • December: Z

What is a TICK?

 

A tick is the minimum price movement in the futures contract. One tick in the S&P 500 emini is equivalent to 0.25 points or $12.50. One tick in the mini Dow is equivalent to 1 point or $5.

 

How much do I need to start trading?

 

Depending on your broker, you can start trading eminis anywhere from $2000 - $5000. However, I do not recommend this. Playing the futures markets is a risky game unless you understand what you are doing. For any new traders looking to trade the emini's, I recommend a minimum of $20,000 and trade 2 contract at most only.

 

Always test your setups and paper trade if you are not ready. Also, when picking your broker, make sure you are getting good fills without any slippage. Slippage and commision can cost heavily. Choose a reliable broker who will connect you to the trading desk if your computer crashes or internet connection dies.

 

Good luck & best of trading,

 

Soultrader

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Guest cooter

Hi SoulTrader,

 

Nice tutorial for the beginner. You should note that the CME has changed the e-mini Nasdaq from half-tick increments to quarter-ticks (0.25 of a point) for a while now.

 

Value of 1 tick (0.25 of a point) on e-mini Nasdaq 100 = $5.00

 

More info here: CME E-mini NASDAQ-100 Futures & Options

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RE: E-mini S&P 500

 

Greetings and Aloha

Does anyone know of a live trading "room" or forum

with someone actually doing live trading.

 

This might be for a newbie to see/hear exactly the thinking of the trader in charge of the "room"?

 

Tks stewart

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RE: E-mini S&P 500

 

Greetings and Aloha

Does anyone know of a live trading "room" or forum

with someone actually doing live trading.

 

This might be for a newbie to see/hear exactly the thinking of the trader in charge of the "room"?

 

Tks stewart

 

Hey stewart,

 

Most people charge for rooms where they do live trading and explain setups. If your looking for some discussion during market hours TL has its own chat you might want to check that out. Also Ensign's echat has some rooms where they will post charts but no step by step "this is what im doing and why"...

 

Hope it helps.

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RE: E-mini S&P 500

 

Greetings and Aloha

Does anyone know of a live trading "room" or forum

with someone actually doing live trading.

 

This might be for a newbie to see/hear exactly the thinking of the trader in charge of the "room"?

 

Tks stewart

 

No matter how good the trader in the room you are in is you will have a hard time trading like he or she does because you do not have the same mental makeup as this person. They may be a gambler, you may be a gambler. You need to find what works for you, often through trial and error, but you can always test ideas on SIM. The internet is an unbelievable free (mostly) resource. With many setups explained all over the place and many sites dedicated to free education. You are on the best one right now. :2c:

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Guest Candelo7
No matter how good the trader in the room you are in is you will have a hard time trading like he or she does because you do not have the same mental makeup as this person. They may be a gambler, you may be a gambler. You need to find what works for you, often through trial and error, but you can always test ideas on SIM. The internet is an unbelievable free (mostly) resource. With many setups explained all over the place and many sites dedicated to free education. You are on the best one right now. :2c:

 

What would you sudgest or recomend in terms of contentin this site for new traders.particularly e mini contract traders:confused:

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What would you sudgest or recomend in terms of contentin this site for new traders.particularly e mini contract traders:confused:

 

This website is the best I have found and I would recommend starting in the beginners forum; then moving on to reading the "Candlestick Corner" also the "reading charts in real time" forum, the "Wycoff Forum" also "Understanding Eminis: Beginner's Guide" Also look into the swing trading and day trading forums and decide which suits you best. Finally I would say the "money management" and "Trading Psychology" forums are very important.

 

All of the above will help you very much. I know this seems like a great deal of studying but if you put your time in you will have the greatest job ever..............In my opinion

 

I wish you the best of luck. :)

 

Chris

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The absolute best book on ES/NQ trading in my mind (and in my library) is TRADING BY THE MINUTE by Joe Ross. His chapter on day trading ES 5 minute charts, well, let's just say that it is unrivaled, period.

 

 

Luv,

Phantom

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Thanks for the reply.

 

but no that isn't it. I am referring to the tape. the time and sales for the ES is giving me prices like that. The Interactive Broker's help person in a message said, the other person told them that it was because prints for the last 30 minutes were being averaged....wholly smoke I sure as hell hope they are not 30 minutes behind...hahaha....then they said that it is a known defect in the system along with others and are working to correct it.

 

I don't know I haven't a clue. I know there are others watching the tape but...no one on here I guess.

 

Thanks.

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