I was invited to a 3-day seminar in San Francisco (Nov 1-3, 2008) for established stock day traders, traders making their living day trading stocks on their home computers. The seminar was hosted by Golden Gate University and TradeGuider, one of the foremost trading systems developed several years ago for the newly-emerging market of ‘e-mini’ traders. TradeGuider hopes to attract more stock day traders to its great trading software. Most good chart-reading (software) systems can be used to trade any of the stock market’s many financial instruments, besides stocks. Ask any e-mini trader and they’ll tell you that nothing (especially stocks) even comes close to the advantages of trading the e-mini. TradeGuider invited me to the seminar just to mingle with the crowd and help get the word out about e-mini’s and the TradeGuider software.
Of the 180 traders at the seminar, I didn’t find one who was even aware of the ‘e-mini’ let alone how much more advantage e-mini’s offer as compared to ordinary stocks. It’s amazing, because the e-mini has been around since 1997, yet those who only know [and think] ‘stocks’ have somehow never managed to bump into it. I guess myopic vision really is a common frailty of human nature.
Here’s just a couple of the advantages: To place a trade on a $20 stock you need $20 cash in your account for every share you want to put in your trade; A 1,000 share trade would require $20,000 cash, plus commissions. You go LONG … and successfully capture a 50 cent per share profit. The trade has produced for you $500 profit. Your ROI = 2.5%
Now, let’s do a trade with e-mini’s. You need $500 cash in your account for each e-mini contract you want to place in a trade, e.g. a 5-contract trade would require $2,500 cash. You go LONG again…and your e-mini trade successfully captures 2 points of the S&P 500 Index. Each point is worth $50 per contract. You had placed 5 contracts in the trade (times) the 2 Index points you captured = 10 total points, worth $50 each = $500 profit.
Your ROI on the e-mini trade = 20%! That’s ten times greater! And, you only needed $2,500 verses $20,000 for the stock trade! You could have been in the trade as little as ten minutes.
Stocks don’t even come close to e-mini’s when it comes to ‘bang for the buck’.
If these numbers catch your interest and you would like to hear more about trading e-mini’s, you’ll find several hours of free information on my web site and blog, listed below.
Incidentally, there’s a good reason why the public has never heard much about the ‘e-mini’. Mutual fund managers and stock brokers will never tell you anything about e-mini’s because they know you’ll want to do your own trading yourself. It was designed for first-timers in the stock market, a financial trading instrument that ordinary folks could afford to learn to trade with. Check it out. Give e-mini trading a shot. You’ll never look back… especially if you are an experienced stock trader.