People who want to get into daytrading often say, "I want to learn daytrading but I don't have the funds necessary to meet the daytrading requirements. Remember daytrading stocks requires a minimum of $25,000 in your account.
In today's world, with foreclosures at an all time highest ever, with the unemployment rate skyrocketing, etc., coming up with $25,000 can be a huge amount of money.
Hmmmmm...
Well, there is a way for you to be part of the daytrading world without having $25,000 in your account. You can learn to daytrade E-Mini Futures. E-Mini daytrading allows you to open an account with as little as $2,500. And you can daytrade with just $500. What stock could you daytrade for $500 (since you have to buy 100 shares)?
Daytrading the E-Mini S&P 500:
The E-Mini S&P 500 is known as a Future. It trades in "Contracts" instead of shares. The E-Mini S&P 500 Future symbol is "ES". The E-Mini S&P 500 Future is like daytrading all of the top 500 stocks that make up the S&P 500 Index at once, with just 1 chart. The E-Mini S&P 500 Future trends up and down matching the S&P 500 Index.
To buy 1 E-Mini S&P 500 contract you will need about $500, depending upon the broker. E-Mini S&P 500 Futures trade on margin. Each broker decides the margin for his customers. Most Futures brokers will let you trade 1 contract for $500. It is always better for you to trade Futures through a Futures broker instead of a broker who primarily trades Stocks and also trades Futures. Futures Brokers provide cheaper commissions and better margin rates.
The E-Mini S&P 500 trades in 25cent increments. Stocks trade in 1cent increments. Each 25cent increment is known
as a tick.
Each Contract trading the E-Mini S&P 500 will make you $12.50 a tick. There are 4 ticks in 1 point. So for every point that the E-Mini S&P 500 Future moves in your favor, you make $50.
Example: Lets say you bought one contract to go long (you want the E-Mini S&P 500 Future to go up), at 1350, if the S&P 500 E-mini does go up to $1350.25, you will make $12.50. It will cost you $500 to trade that one contract.
But you say...$12.50 is not much money. Well.....
If you bought 2 contracts you would make $25. Remember to buy 2 contracts you would need $1000 in your account.
How many contracts can you buy? It depends entirely on your risk model. When you first start daytrading, you start