Emini Futures Day Trading :
Fundamentals And Simulated Trading System
by: Michael Taylor
Links
The Enthios Universal
Method
Interactive
Brokers
Charles Schwab
Fundamental Analysis
Fundamental analysis is a methodology for analysis
of a company as a viable stock that you want to hold for long term.
Fundamental analysis is more widespread in the world of investing
since you are going to hold your companies for 10 to 20 years, you
do not wish that your companies go bankrupt the next day. Some of
the common ratios used are P/E ratios (price earnings ratios) which
measures the relative price of the stock to the earnings of the
company, the EPS (earnings per share), the debt equity ratio and
tons of other ratios.
Although I have spent considerable time studying
such ratios I discovered that you do not really need such
information to be successful in day trading. I repeat, fundamental
analysis plays a marginal role in day trading. In fact, most of the
time, I don't follow it at all. If you still have reservations
about ignoring fundamental analysis, I recommend trading ETFs
(exchange traded funds) such as QQQQ which mirrors the movement of
the NASDAQ 100. In essence, you are actually trading the index like
a normal stock. Indexes usually have a huge number of stocks in
them, making them less susceptible to company specific news.
However if you are paranoid, then you might still want to follow
the news of the major companies in the index.
here is no lack of information and no end to
analysis. Knowing the fundamentals might seem cool when you discuss
company so and so over a cocktail party, but it will not help you
rip money off Wall Street in day trading. Being able to remove
fundamental analysis from the decision making process is also one
of the reasons why I recommend trading Emini index futures.
Paper Trading: Don't Ever Underestimate
it!
Paper trading refers to trading with virtual money,
you do not use real money. You jot down in your notebook when you
bought at what price and why. When you sell, you record in your
notebook again why you sold and calculate the profit or loss
associated with the trade.
If you cannot make money by paper trading, you can
forget about making money in real trading. Always test a new
trading idea with paper trading first before using real money. Also
start with paper trading after a long period of break, to help you
get back in touch with trading.
Although there is very little difference between
paper trading and real trading in Emini, real trading is subjected
to slippage and psychological factors come into play when you are
using real money. Do not underestimate the impact of psychological
factors on your trading. After you have a reasonable method and
money management techniques, it is the psychological factors which
will determine whether you make a profit or loss.
Some traders have created software to paper trade.
You hit the buttons like you are doing real trading but only
virtual money is involved and no real cash is used. The system will
record down the time, price, symbol and the position opened or
closed. This saves you the trouble of keeping a paper record.
About The Author
Michael Taylor is a professional
trader and webmaster of http://www.daytradeemini.com. He regular updates his trading blog at
http://www.daytradeemini.com/blog
with educational articles
and trading records.
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