Dow Mini Futures Trading

Why Trade The YM Dow Emini Contract?


Ask yourself this question: Why are more and more traders choosing E-mini futures, specifically the Dow Emini, as their preferred trading instrument over equities and currencies? There are decidedly distinct advantages in trading futures over stocks and Forex. Below you will find an impressive list of these advantages: 

The Pattern Daytrading Rule Does Not Apply 

Not everyone has a minimum $25,000 of risk capital available to begin daytrading equities which the pattern daytrading rule requires. Futures brokerage accounts can be opened and funded with as little as $1000 however it is recommended to have at least a minimum of $5000 before beginning to daytrade emini futures. More information about the pattern daytrading rule can be found here.


Deep Discounted Commissions 

YM Dow emini commissions can be as low as $1.00 per side for high volume traders and seldom rise above $3.00 per side, even if you’re a low volume trader. Brokerage fees, including commissions can have a significant impact on profits and your bottom line so commissions structures are an important consideration when selecting a futures broker. 

Market Liquidity 

Emini contracts can easily be bought or sold making the futures a very liquid market. Stocks can be illiquid at times making daytrading difficult which is never the case with mini futures. Excellent price action, lighting fast executions and exceptional volatility are attributes of market liquidity making the index futures markets some of the best in all financial markets. 

Market Efficiency 

The YM trades in one point increments with a very tight spread of consistently one tick. At anytime traders can see the best bids and asks on the time and sales screen with numbers of contracts being traded in real time. Transparency allows the trader to view the number of orders placed ahead of him which is significant since a keen eye can often predict short term market moves simply by watching time and sales order flow. A trading strategy often employed by experienced floor traders. 

Shorting the Market Just Got Easier 

Most equities daytraders are familiar with the difficulties of short selling stocks. The shares in the underlying stock must be borrowed and many times shares are not available. The oppressive uptick rules is a factor that can affect shorting strategy. The SEC can also be restrictive on who can sell short, which stocks can be shorted and how they are shorted. However, none of these rules or regulations are a concern when shorting the YM contract or its cousins, the NQ and ES. Place a sell order and that’s it, you’re short the emini. It’s as simple as going long. 

And The Single Biggest Factor Why Traders Love The Emini Futures… 

Time! No more hours of research each evening after market close. No more sifting through chart after chart or running scans. Ask any trader, whether they trade stocks, options or futures, and most will all agree, the indexes and individual stocks track and follow the futures markets. Most emini futures traders only use one chart with some using the TICK & TRIN but seldom more than these three. Divorce yourself from the market and reclaim your personal life and evenings.


What Are The Traits Of A Successful YM Emini Trader? 

Books have been written, articles submitted, and websites launched that cover every detail associated with trading psychology. Every imaginable subject has been broken down into detail. Of course, a working knowledge of the financial markets is necessary, although purely academic. Knowledge can be acquired with courses, books and the application of quality study habits. Experience is also important but can’t be gained until a trader puts a plan into action and actually begins trading. 

Knowledge and experience are both necessary traits required for success but one trait of the successful trader, and arguably the most important trait of all, is discipline. You can glean all the available knowledge there is about trading and still fail as a trader. Knowledge is worthless unless that knowledge is applied with the discipline to follow the rules set down in your trading plan. Discipline overcomes fear – discipline overcomes greed – discipline overcomes hope, the three main reasons of catastrophic failure and blown out trading accounts. Experience can’t be gained without discipline. 

The disciplined trader knows he cannot control the market, only react. Self control  through discipline never allows him to hold a position once it moves against him. Hope the market will turn in his favor does not sway him from following his trading rules. The market turns, hits his stop, he gets out. Next! he does not chase the market nor does he force trades, he reacts to the market with the discipline to follow his trading plan and rules. Exercise discipline and your success is almost assured.


What’s Your Trading Style? The YM Contract Is Highly Adaptable To Most Methods

 The YM contract lends itself very well to those discerning traders who prefer a variety of trading approaches. Time and sales employing predetermined pivot points with support and resistance levels, a floor trader favorite, is used by many retail traders. If you prefer Japanese candlestick charting using time tested patterns and formations, the Dow emini is a perfect fit. Are moving averages and crossovers your style? Are you a scalping enthusiast? Do lighting fast trades appeal to you? Moving quickly in and out of the market scalping a point or two flying under the radar. Scalpers find the YM contract is ideal for the scalp trading methodology. Whatever your trading style, the YM Dow mini-sized contract is a splendidly adaptable to most trading styles.