In trying to find good, unbiased resources to help speculate in Trading The Dow Jones Emini Futures market an idea for this website was born. How can you trade a market if there is very little information to help you learn? How do you know what answers you need if you don’t even know what questions to ask? The intent here is to help the uninitiated and inexperienced along with traders from other financial markets toward developing a trading plan.
When attempting to make money in financial markets there is an overwhelming amount of information that has to be considered before even placing your first trade. Money can be made in Bullish (Long) and Bearish (Short) market conditions. How do you know which way to go? Through commentary on actual market action and publication of those charts visitors to this website can learn through example.
Trading The Dow Jones Emini Futures market offers trend trading opportunities unlike any other market. By trend trading there is such an incredible amount of potential that can be put to use in a way that doesn’t exist in the world of day trading stocks. The Dow consistently trends 100 points or more. By keeping in mind this fact trade management becomes much easier to focus on. However if a sizable move has been made try to capture at least 70% of a trend. If a trade starts out gangbusters but falters shortly thereafter allow yourself to be stopped out with a minimal gain or loss and plan on getting ready for the next big trade.
A traffic signal may show a green light. How many accidents happen at intersections? You may, just like an unsuspecting driver, be blindsided at any time. Just because the trade setups shown here on this website’s blog postings worked doesn’t mean that a similar setup is immune to failure. Use stops. Use margin correctly and never bet more than you can afford to lose!
Trade Management: One thing that can’t be emphasized enough is stop placement. YOU ABSOLUTELY MUST USE STOPS!! Every recommended trade from Trading Dow Futures has an entry point and a stop, always use a stop when entering any trade.
You don’t need to commit all of your money initially, let the market prove you’re correct before going all in. Once a trade has initially moved in your favor and has met your expectations that you have entered correctly and all indications are that the market will reward you, go ahead and place your next stop.
Set your stop a point or two beyond your entry to at least cover your commission if the market does suddenly decide to go against you. Trends take awhile, don’t get cold feet, let the trend be your friend and ride it out.
Trading Dow Futures has educated you as to what to expect from the market. Define a holding time as long as the market hasn’t proved you wrong and you are still in the trade. Also, predetermine what threshold presented by indicator analysis will be used for determining when to exit a trade. Study Bollinger Bands and its 20 period moving average in relation to trends that have happened in the past and what market levels did when they approached them. Many traders believe exits are more difficult than entries
If a trade doesn’t move in the direction you’re expecting of it when you enter chances are you may be right in exiting sooner rather than later. After all you understand what has happened in the past and your sense of anticipation of the market is probably correct. If you aren’t comfortable with entering a trade yet continue to study and speculate here at Trading Dow Futures. Tighten your stop or get out. There’s nothing gained by anticipating for hours that a move will come only to be disappointed by holding on too long and watching the market move in the opposite direction of your entry.
A one point move using day trading margin with a Dow Jones Emini Futures contract is worth $5.00. Therefore a 100 point trend would have netted $500.00 per contract. Common day trading margin for the Dow Jones Emini Futures contract is $500.00 at many brokerages. Do the math: With one successful trade of 100 points or more and using a $500.00 investment, you would have doubled your money if you were on the right side of the trade. I’ll repeat that: “As long as you were on the right side of the trade”. Study all the charts and videos documented here. Knowing what exists allows the trader to specifically focus on only the setups they may be most comfortable with. Money management, psychological profiles and time with which to trade are all considerations that can affect frequency and duration of personal time allowable to pursue this. Overnight margin rates apply during overnight trading hours and, depending on the broker, can be a fairly steep multiple of day trading margin rates. Check with your broker.
Many entries documented here will be close to the Bollinger Band and should be studied well enough to understand that longs should be attempted from the bottom of the Band and shorts entered from the top of the Band if the indicator setups are signaling this. MACD or MACD Histogram or both should be signaling in unison with the Stochastics when the second Stochastics signal crosses. In some cases it will be fairly obvious how a trade based strictly off of indicators can continue on into a trade from a breakout past a consolidation.
This website is in no way, shape or form an inexhaustible study on trading trends. Bollinger Bands, MACD, Slow Stochastics, market level (same as price with stocks) and volume are shown as the indicators used for trend trading purposes.
This is about technical trading using indicators. News or fundamentals are not part of this plan. This is an attempt to systematize an approach to the market in that when a particular occurrence takes place, the trader is ready to observe when or if there is a proper time to enter the trade or not.
Three of the best books on trading are “Bollinger on Bollinger Bands” by John Bollinger, Alan Farley’s “Master Swing Trader” and McGee and Edwards “Technical Analysis of Stock Trends.” While none directly analyze the Futures Market, the indicators, terms, concepts and ideas presented here are explained further in these books.
August 13, 2016