Emini index futures trading was introduced in 1997 as a smaller version of the large index futures contract which has allowed many that wouldn’t normally have the opportunity to trade these futures contracts. With smaller margin requirements, the emini contract is one-fifth the size of the larger futures contract. One of the more popular contracts traded is the emini DOW futures contract. Although not introduced at the same time as the S&P 500 (ES) contract and NASDAQ (NQ) contract, the mini DOW futures contract has grown in volume with each passing year as more an more emini traders trade it exclusively.

DOW Emini Trading

Unlike it’s cousins, the ES and NQ, the DOW or YM contract does not trade in quarter increments and only trades in full points. With a $5 multiplier, each point moved is a profit or a loss depending on which side of the market the trader is on. Equally as liquid as the other two index futures contracts, traders have come to appreciate the ease at which they can move in and out of the market which more often than not offers several opportunities to profit several times during the daily market session. Former stock day traders the Dow emini because it eliminates one of the most time consuming requirements for day trading stocks: research. Since emini future traders only need to utilize one trading instrument, in this case the DOW emini, hours of research and stock chart scanning to locate possible trade set-ups in virtually eliminated.

Emini Strategy - Day Trading The Emini DOW Futures

Most emini future traders utilize a day trading method to capitalize on market moves during the daily session. Using a variety of methods which fit their individual personality traits and risk tolerance, mini DOW futures lend themselves very well to varying day trading methods. Some traders employ a trend following method, entering the market once a trend for the day has been established and riding the position all day until the cash market closes. Others will use pivot points along with numbers associated with areas of support and resistance. Some will use classic Japanese candlestick patterns in conjunction with oscillators and indicators such as the MACD and Relative Strength Indicator (RSI) to determine when to enter and exit the market. Whichever method is used, the DOW emini can be traded using a wide variety of trading systems.

Emini Scalping

Scalping emini futures is another very popular form of profiting with emini contracts. Some traders scalp the DOW eminis exclusively with this form of trading being very popular among professional and veteran traders. Although reserved for the experienced traders, scalping one emini contract is an excellent way for a new trader to gain confidence and experience in the futures markets. With one contract, the novice trader reduces his exposure greatly if he follows the traditional form of scalp trading. Using tight stops, the trader will exit quickly if the trade goes against him greatly reducing losses. The mind set of the scalp trader is focusing on quickly gaining a few points in a very short period of time, usually only a couple of minutes and then quickly exiting the trade. The classic scalp trader does not care about hitting a home run with each trade and fiercely focuses on just a few points no matter what the market is doing. Some scalp traders may execute many trades everyday. To employ a emini scalping method, it is best to use a broker that charges the minimal commissions round trip since these fees can rapidly add up.

Mini DOW futures are an excellent trading instrument for market participants trading for short term gains. Many traders use emini contracts as their only source of incoming, treating it as a business with maximum effort on trading well. Savvy traders realize trading is a skill and requires a commitment to discipline and focus. Most traders design their own systems with a focus on money management. Experienced traders know the most important factor to trading success is implementing and using a system that has strong money management principals. They also know losing trades are a part of successful trading and no trader execute successful trades one hundred percent of the time.

It’s possible for a trader to execute more losing trades than winning trades and see be profitable year after year. Because the trader adheres to strong money management principles within his trading system, he quickly eliminates bad trades and capitalizes on winning trades. It cannot be stressed enough how important a system is to trading well. By focusing on trading well the emini DOW futures trader increases his chances of becoming successful as a index futures trader.