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Learn Discount Daytrading
By Barbara Cohen
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. By: Barbara Cohen Article Directory: http://www.articledashboard.com 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.
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