Investing & Day Trading Education:  Day Trading Academy

The Emini S&P 500 Is Still The Best Market To Day Trade

The Emini S&P 500 has given us a great year.  We have seen a range of possibilities and market movement throughout the last year of 2012. Many people had a very rough time making profits with the record low volume that we had in the month of August and September.

Many people announced that the ES was dead and others decided to switch markets

I however, would still go on record saying that the Emini S&P 500 is the best market to trade on, period.  In terms of behavior and actual movement, the ES (EminiS SP 500), still gives us enough opportunities to make a living as a day trader.

I trade the ES and crude exclusively and when the volume slowed we were still able to make an average of two points today with the Congressive Trading System.

One of the reasons that we haven’t switched from trading the Emini S&P 500 is because it’s such a fluid market compared to others. Every market has a personality and we have to stay in tune with that market, that is one of the reasons why I never trade more than one market at a time.

One of the things that we have to understand as traders is that the markets are not going to move well all the time. As I mentioned in my previous post, the calm before the storm, just because we have low volume now doesn’t signify that we are going to see higher volume later.

There is generally a range of movement throughout the year and even though the market had low volume then, the movement should balance out throughout the year.

Emini SP 500

The Emini SP 500 Chart

Volume & Movement of the Emini S&P 500

In terms of actual volume and market participants, the Emini S&P 500 is still one the highest traded market of any market in the world. More people day trade Emini S&P 500 than any other single stock, index, futures, or ETF in the world.

Some traders decide to trade the ES exclusively while others decide to couple it with another strategy that includes other markets.

Either way, if the ES is the highest traded market in the world, when there are periods of low volume that this is where I want to be.  Technically should have the best movement when we have low volume.

Perfect Timing

The Emini S&P 500 also has the best movement during the best times, most most day traders are involved in the markets between 9:30am to 11am, eastern time.  Now that I am day trading from London I’m able to start trading at 2pm and finish trading anywhere between 4pm to 6pm, London time.

For most people around the world this is an optimal time as well. In Asia, the markets would open anywhere between 6pm to &  8pm.  In the West, including California and places like Alaska, the start times would be anywhere between 6am to 8am.

No matter where you are the world the fact of the matter is the majority of the volume is always going to start around 930am.

Since I am constantly day trading & travelling around the world I have to consider the markets I trade in because I may be in Asia one week and United States the next.  All of the traders in my training program always think I never sleep because I am constantly answering questions at all times of the morning.

Actually, I don’t sleep but that’s besides the point.

When I was living in Chile I would wake up at 2am local time in order to wake up and trade crude  during the best time of the day.  Now the crude market moves a bit different, since crude is a global market the optimal trading times change.  The Emini S&P 500 always is 930am EST to 11am EST.

The morning session for us is between 8:45am to 1pm EST and the afternoon session starts at 1pm EST.  Most of my traders don’t trade after 1pm EST.

No Regulations affect the Emini S&P 500

The ES is the most popular market that my traders are involved in, it also happens to be the most popular market that I have heard others trade in as well, crude which is otherwise known as the CL, and the 6E which is the euro versus dollar currency are very popular as well.

While anything can happen, understanding what the Emini futures market is will allow us all to understand that there can only be a limited amount of regulation applied to it.

Crude for example, is a physical commodity that is priced on the futures market. Many U.S.  government officials believe that speculators, like myself, affect the price of crude. So considering that crude is a physical commodity that affects the (global) economy we can understand that is would have a higher likelihood of being regulated in comparison to the ES.

The Emini S&P 500 isn’t a physical commodity, in essence, it’s just a make believe market.

The only reason why the Emini S&P 500 exists is because you when I say it exists. The actual movement that occurs on the ES comes from the actual stocks that are on the Emini S&P 500 index.

In other words, the people who buy and sell the stocks that are on the S&P 500 or the people who move the market, not us (Emini futures traders).

The reason why the market does exist is because there are day traders like myself, you as well if you day trade in the Emini markets, that want put our money on the line in order to make a profit. This is one of the reasons why they call the speculators.

The Emini SP 500 Is The Best Market To Teach On

The market doesn’t spike around like crude of the DAX and it provides fluid movement because so many traders and volume flow through it.  Some people have abandoned the ES simply because of the low volume but I plan to stick with it because many people don’t realize that this is a prime market to learn discipline.

Most traders aren’t successful because they don’t have discipline when they are trading.  I have seen countless people apply the concepts of the MIND Day Trading Strategy only to find its not working because they aren’t following all the rules.

Low volume forces everyone to cut back on their aggressiveness, once the volume does come back in the markets (which is now) the discipline has been found and people start making money in the markets.

Would love to hear from traders out there on what they think of the Emini SP 500, you can email me, leave a comment below, or contact us via the contact page.  Lets have a great trading week!

5 Comments

  1. Finding that the NQ and TF follow each other. The NQ has a lower margin requirement as it is $20 a point vs the TF at $100 a point. The NQ moves more than the ES for some great trades if you know how to read price action. The TF is usually pulled in the direction of the NQ but is a slower mover like the ES. I would say for starting out with a small account that the NQ is a good place to trade until your account grows.

  2. Hi Marcello,

    do you think that the Emini S&P 500 has evolved in any way in the past couple of years and do you think that the above will continue to apply for the mid to long term future?

    Thanks

    1. John… yes it has evolved quite a bit with the onset of algo trading and other aspects. One thing you may not know is that the CME is considers many of the world’s central banks to be customers. That is, the world’s central banks are now trading and providing liquidity to the market. That definitely effects things as well. I would still consider it to be one of the best markets to trade though.

    2. John… yes it has evolved quite a bit with the onset of algo trading and other aspects. One thing you may not know is that the CME is considers many of the world’s central banks to be customers. That is, the world’s central banks are now trading and providing liquidity to the market. That definitely effects things as well. I would still consider it to be one of the best markets to trade though.

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