Simplifying e-mini futures day trading - a smart approach

Trading is simple but not easy. It is simple in practice. You buy low, you sell high. Or, conversely, you sell high and then buy low. You can do that with virtually any trading instrument out there, be it stocks, futures, e-mini futures, or currency pairs.

Day trading e-mini futures that has grown in popularity over the recent years is as easy as any other forms of trading, save perhaps for a relatively large leverage that you deal with, compared to stocks, but you may deal with even higher leverage in Forex. The only limitation here is that you are required to open and close your position the same day. That's pretty much what defines day trading.

But neither trading (nor day trading, in particular) is easy, because nothing as competitive as a zero (or even sub-zero if you take commissions into account) game is easy.

This apparent simplicity of trading has convinced some people, many in fact, that trading can be made easy if only they could simplify it.

Unfortunately, trading requires one to deal with relatively complex situations. Many of these situations cannot be easily reduced to anything simpler and perhaps cannot be at all.

Does that mean that trading cannot be simplified at all? Not, that's not necessarily the case either. However, it cannot be simpified in a simplistic way; you cannot simplify things wholesale, everything in the same way. An individual approach is required, in other words.

Here is one way to do it.

Focus first on mastering trading in most optimal situations. For instance, when volatility is good and the market bias (overall trend) is clear and unlikely to change. Trading in such situations should be relatively easy and it can be used as a test if you can handle trading at all. If you cannot perform well under these circumstances, your chances to succeed as a day trader are rather slim.

For instance, in KING, an e-mini futures day trading methodology I offer on this site, this is incorporated through the use of George IV, a very good mechanical day trading system in its own right, that works well for YM and ES, the Dow Jones e-mini futures market and S&P 500 e-mini futures market, respectively.

When George IV signals a trade, that usually means that volatility is greater that it is on average and the market is very likely to trend in the direction indicated by the system call. It is much easier and more profitable to trade on days like that and I have demonstrated this many times on this site.

The screenshot with my trading results on December 15th, 2015 illustrates what I had in mind (see also my entry that day in the daily e-mini trading results reports). That day George IV made a long call. Acting on this guidance, I took two trades in the long direction, the first and the last. The first netted 30 points per contract, the second was a bit more of a gamble, but I was prepared to add to my original position of 2 contracts betting that the market would eventually move up. That was indeed the case.

My emini trading results with KING/George IV on 12/15/2015
emini trading results #772

Once you have mastered the "easy" situations like that, trading in more complex situations can be a bit less challenging, in part due to greater confidence that you now should have. It is important to build the confidence in your trading abilities as soon as possible. Without it, you may never succeed. What this also means is that you don't want to jump into deep waters right away because you are likely to get scared and scarrred mentally and it may then take you a while to recover from it.

That's why the approach I recommend may, in fact, be life saving, saving your carreer as a trader, e-mini futures day trader, in particular.

Posted on December 14th, 2015.

Updated on December 15th, 2015.