Learn Discount Daytrading
People who want to get into daytrading often say, "I want to learn daytrading but I don't have the funds necessary to meet the daytrading requirements. Remember daytrading stocks requires a minimum of $25,000 in your account.
In today's world, with foreclosures at an all time highest ever, with the unemployment rate skyrocketing, etc., coming up with $25,000 can be a huge amount of money.
Hmmmmm...
Well, there is a way for you to be part of the daytrading world without having $25,000 in your account. You can learn to daytrade E-Mini Futures. E-Mini daytrading allows you to open an account with as little as $2,500. And you can daytrade with just $500. What stock could you daytrade for $500 (since you have to buy 100 shares)?
Daytrading the E-Mini S&P 500:
The E-Mini S&P 500 is known as a Future. It trades in "Contracts" instead of shares. The E-Mini S&P 500 Future symbol is "ES". The E-Mini S&P 500 Future is like daytrading all of the top 500 stocks that make up the S&P 500 Index at once, with just 1 chart. The E-Mini S&P 500 Future trends up and down matching the S&P 500 Index.
To buy 1 E-Mini S&P 500 contract you will need about $500, depending upon the broker. E-Mini S&P 500 Futures trade on margin. Each broker decides the margin for his customers. Most Futures brokers will let you trade 1 contract for $500. It is always better for you to trade Futures through a Futures broker instead of a broker who primarily trades Stocks and also trades Futures. Futures Brokers provide cheaper commissions and better margin rates.
The E-Mini S&P 500 trades in 25cent increments. Stocks trade in 1cent increments. Each 25cent increment is known as a tick.
Each Contract trading the E-Mini S&P 500 will make you $12.50 a tick. There are 4 ticks in 1 point. So for every point that the E-Mini S&P 500 Future moves in your favor, you make $50.
Example: Lets say you bought one contract to go long (you want the E-Mini S&P 500 Future to go up), at 1350, if the S&P 500 E-mini does go up to $1350.25, you will make $12.50. It will cost you $500 to trade that one contract.
But you say...$12.50 is not much money. Well.....
If you bought 2 contracts you would make $25. Remember to buy 2 contracts you would need $1000 in your account.
How many contracts can you buy? It depends entirely on your risk model. When you first start daytrading, you start daytrading on a simulator and not with any real money. Once you are consistently profitable on the simulator, you start daytrading with 1 contract. It may take 2 or 3 or 4 months. During that time, you gradually move up in the number of contracts you trade.
Instead of going for 1 tick per trade, try 2 ticks per trade. Then even 1 contract pays you $25.
Watch this. Say you trade with 5 contracts, for a total of $2500. And you make 1 trade for 2 ticks. Now you made $125 on your $2500 investment. That is a 5% return on investment. Not too shabby. The bank pays you less than 5% annually. Most people in America do not make $125 per day.
Here is the best part. One trade should take you less than 4 minutes of actual trading time. Your elapsed time in front of the monitor will be longer, but actually in the Market, probably less than 4 minutes.
You can also learn to daytrade the Treasuries that pay $31.25 a tick. You still only need about $500 per contract to trade it. Nice leverage! If you are interested in this kind of daytrading, you should attend a Shadowtraders webinar and see for yourself what E-Mini S&P 500 daytrading is all about.
Barbara Cohen is the CEO of Pure Reason, LLC., the parent company of Shadowtraders.com. She has been a professional daytrader for over 10 years. She can daytrade stocks, options and futures but she now expressly trades the S&P 500 E-mini, the 10-Year Treasury Note and the 30-Year Treasury Bond.
All three Futures are offered through the Chicago Mercantile Exchange (CME). Barbara has trained hundreds of students to trade the Futures Market with Shadowtraders' online trading strategies. Barbara frequently hosts the daily online trading chatroom offered by Shadowtraders.com to its traders.
Source: http://ezinearticles.com/
Added: March 4, 2008
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