The CME launched the first E-minis in 1997 to grant investors who can’t afford standard contract access to the futures market. These assets grant a trader an opportunity for them to speculate on price movement while hedging their bets.
To help you get started, we have prepared the following how to trade emini futures guide. We’ll show you various emini futures trading strategies.
E-Mini Futures Trading: Strategies and Techniques
Generally, e-mini futures trading strategies are unique techniques that traders use to benefit from emini contracts. Remember, even emini trading requires an exceptional strategy that can guarantee you a high winning percentage. Some of the best strategies that you need to know when learning how to trade e mini futures include:
- Swing trading strategies: it’s a unique emini strategy for securing market share by holding your open positions for a number of sessions.
- Emini trading based on trend: in a trending market, it’s always a good idea to use lower time frames. But most importantly, you can trade trend reversals.
- Momentum trading: traders sell and buy contracts as per the prevailing strength of the prices.
Micro E-Mini Futures: Benefits and Considerations
If you’re working with an even smaller capital, then you may have heard of micro eminis. So what are micro e mini futures? They’re the smaller version of eminis that have become quite popular among traders thanks to their many benefits.
One of its top benefits is affordability. Since they’re smaller than emini contracts, traders can open and close positions with an even smaller budget. Therefore, they’re attractive to traders with limited capital or are just starting out.
Another reason why they’re quite popular is flexibility. Traders can use micro eminis to hedge against their open positions. Plus, eminis grant you access to several assets and commodities. Therefore, you should learn how to trade micro e mini futures.
Determining the Capital Requirements for E-Mini Futures Trading
Before answering the question, “How much money do you need to trade emini futures?” we need to understand the risks associated with these contracts. These assets move in ticks, each one of them being $12.50.
Therefore, if you need 4–tick stop loss, the minimum cash you can risk is $50. So when using a 1% risk rule, you should have over $5,000 in your account. If you want two contracts, then you’ll need more capital.
So you can use your risk level to determine the amount of capital needed. After all, it can help you keep control of your risk level and have the right amount of capital every time. If it’s a 6-ticks stop loss, then you’ll be risking $75. When risking 2%, you’ll need to deposit $3,750 in your account.
Unfortunately, some exchanges require a $10,000 deposit to trade futures. So make sure you keep the risk level at 2%.
Where to Trade E-Mini Futures: Platforms and Exchanges
Thanks to the exact price of a standard contract, the emini futures have become way more popular than full contracts. So here are where to trade emini futures:
- Ninja Trader: this is an exceptional platform for advanced traders and beginners. To open an account, you’ll need a minimum of $400.
- TD Ameritrade: this is the best platform for newbies looking to try emini futures trading. To open an account, you’ll need a minimum of $1,500.
- Tradestation: this platform is ideal for seasoned traders looking for a unique platform with fully-operational apps. To open an account, you’ll require a minimum of $2,000.
- Plus500: this derivative broker offers a wide range of future trading services like CDFs. This platform requires a minimum of $100 to get started.
Effective E-Mini Trading Strategies for Success
Just like with standard contracts, you need effective emini trading strategies that can improve your success rate. There are lots of strategies, with the most profitable one being scalping.
Scalping involves traders selling the mini contracts as soon as they become profitable. You can also try a swing trading strategy or any trend strategy.