The hottest contracts include ES, YM and ER2, that is the emini contracts of S&P 500 futures, the Dow futures and the Russell 2000 futures. Indicated above are eminis of stock index futures.
A lot of emini s&p 500 futures traders trade these highly preferred trading vehicles every day, often a couple of times a day. Day trading eminis does not necessitate you to have a big capital to risk. Some emini s&p 500 futures brokers can open an account for you with only $3K if not a touch less, so it is no wonder that many try their hand at this game that may be quite profitable to people who have mastered it.
But what exactly is day trading? For some folks, this may be self-explanatory. However, this cannot always be so. If you think that day trading means trading every day, then this is not the thing. Even though, it’s correct that many daytraders take more than one trade just about each day if not every day, day trading really means a type of trading that presupposes that you close your position the same day you opened it, that is, by the closing of the daily trading session, which spans approximately the same duration as the regular stock trading session. Day traders trading YM should close their positions the latest of which is by 5 PM EST since this is the end of the daily trading session of most electronically traded US stock index futures.
There are several good reasons why you want to be out of your position by then. First of all, once the overnight session commences, which transpires straight after the close of the daily session, the overnight emini s&p 500 futures margins kick in. This implies that if your account is small, you may not hold it overnight since what is involved are margins that may be several times bigger than those allowed for day trading. Therefore, you are forced to close it. It is also more unsafe to maintain your position overnight than in the day since it will be exposed to worldwide incidents that are often erratic and chaotic producing fluctuations in the futures markets. And who would actually need to lose their sleep over that? Certainly, not a lot.
So while it is true that many day traders trade several times a day, day trading is not really about recurrent trading. It is simply about being out of your position before the end of the daily trading session. That is how day trading differs substantially from other forms of trading such as swing trading where you keep your position open for one or two days to a few weeks and from position trading where you sustain your position open for months.
Suggested Reading:
Learn Emini Trading System
Master Emini S&P 500
S&P Emini
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