Day Trading for Beginner
E-MINI S&P 500 SAMPLE DAY TRADES
Day Trading for Beginner
Example One: A day trader of the E-mini® S&P 500® futures sits in front of a 5-minute bar chart (at right) and watches the 4,9 and 18-period moving averages - the blue, red and green lines, respectively. Trade signals are generated by a simple cross-over as follows: When the blue line crosses up through the green line, then buy and when the blue line crosses down through the green line, then sell.

At 8:30 a.m., the trader saw the blue line cross down through the green line and then sold a futures at 905.50. This short position was maintained until 10:05 a.m. when the blue line rose up through the green line and the trader subsequently closed the position by buying back at 893.00. The result: a realized net gain of 12.5 points = $625 per contract (not including commission and fees) for a trade that lasted about 90 minutes.

 

Day Trading for Beginner  

Example Two: In the early morning hours on Jan 13, an E-mini S&P 500 futures day trader identifies an area of support just above 869 (green line in chart at right) for the Mar 2009 contract. To trade a possible break-out, the trader enters a stop order to sell a contract should prices decline to 869.

At 2:00 a.m., the market declines to this price and the trader's short position gets filled. To limit risk to $100, the trader enters a stop loss order to buy back at 871 (8 tick rally).

The trader then sets a trailing stop order as follows: If the market declines by 8 ticks from the entry price of 869, then the protective stop order will start to trail the market lower by 8 ticks. At 2:20 a.m., the market declined to 867 and the trailing stop was activated to buy back should prices at any time rally by 8 ticks. The worse case scenario now was a scratch trade (not including commission and trading fees).

Over the next 50 minutes, prices continued to decline and all along the protective stop order followed the market lower by 8 ticks. At 3:10 a.m., the market reached 861 and then subsequently recovered, rallying 8 ticks to 863 which hit the stop order and automatically closed the short position.

The result: a realized net gain of 6 points = $300 per contract (not including commission and fees) for a trade that lasted a little over an hour and that at the start was set to risk only $100.

 

Example Three: An E-mini S&P 500 futures day trader using a 15-minute bar chart identifies an area of resistance around 812-813 (green line in chart at right) for the Mar 2009 contract. The level held for about an hour starting at 5:30 a.m. and was tested four times before prices fell away. To trade a possible break-out should prices again attempt to rally, the trader enters a stop order to buy a contract at 814.

At 9:00 a.m., the market rallies to this price and the trader's long position gets filled at 814. Because this trader's time horizon is slightly longer than the trader in Example Two who uses a 5-minute chart, the protective stop order is set to accommodate greater price volatility. In this case, the trader decides to limit risk to $300 and enters a stop loss order to sell at 808 (24 ticks).

While prices do initially show strength, they subsequently retrace and 45-minutes after having entered the order, the market touches the stop price and the trade is closed at 808 for a loss of $300 (not including commission and fees).

The trader records this trade in the log and notes that, after having been stopped out, the market rallies fairly strongly such that if the initial trade had not been stopped out, then it would have been profitable. If this becomes a pattern, then the trader may decide to widen the protective stop order in the future.


Using Moving Averages This 5-minute bar chart of the Mar 2009 E-mini S&P 500 futures shows activity on Jan 9, the day of the release of December non-farm payrolls. The trader anticipated an active day - the data were expected to show a large contraction in jobs - and logged into the trading account prior to the data's release. By following a simple moving-average crossover as a technical indicator, the trader sold a futures and then later bought it back, thus capitalizing on a market sell-off.

 

Day Trading education
 

Day Trading for the Beginner
 


Using a Trailing Stop A stop limit order is a useful tool for managing the risk of loss on a trade. By trailing the stop order to automatically follow the market, this same stop order can lock in profit should the market move favorably for the trader. By so doing, the trader need not pick the exit price: the trailing stop order will continue to follow the market until such time as the market retraces enough to trigger the stop order, thereby closing the position.

 

Day Trading for Beginner
 

 

Day Trading for Beginner

 


Getting Stopped Out By waiting for prices to break through resistance shown above before buying, the trader was correctly positioned for the continued price advance. However, the protective stop order was executed on a brief market correction, thus closing at a loss what would have otherwise been a profitable trade. Finding the right amount of money to risk on a trade is a contributing element to the overall performance of a day trading plan.

 

Note: The trade examples shown here are for informational purposes only.

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Futures trading involves substantial risk and is not for everyone. Only risk capital should be used.
Keywords: E-mini S&P 500 futures, day trader, trailing stop order, e-mini, day trading, day trading beginner
Abstract: Sample trades for Day Trading E-mini S&P 500 futures.

E-mini S&P 500 Day Trading Basics | About Electronic Day Trading | Types of Day Trading Orders | Sample E-mini Day Trades | Day Trading as a Business | Managing the Risks of Day Trading | The E-mini Day Trading Plan | Fine Tuning your Day Trading Plan | Measuring E-mini Day Trading Profit Potential | The Psychology of Day Trading | Day Trading Books & CDs | Day Trading Store | Electronic Trading Center


 

 

 

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