Wednesday, December 13, 2006

1 Hour of Work, Biggest Day Yet..



Today is my 2nd day trading futures.
My focus today was on the RUSSELL 2000 E-mini Futures (ER).
I traded for 1 hour....
Net P/L: $8,272.50



The Chart on the left is the Russell 2000, and the chart on the right is the S&P 500 (ES).

Remember, for every point you earn on the Russell 2000 E-mini, that's $100. So If I'm trading 10 contracts like in this case, that would be a profit of $1,000.

Now also keep in mind, that the R2k E-mini, has a nice intra-day fluctuation, there are waves that travel through it, and it goes up and down, ideally you would like to profit from these waves, and sell out. It's peak was at 792.88 and it's bottom was held by the 787.84 level. That's a net fluctuation of 5 points. The Chicago Mercantile Exchange just enacted a new rule allowing a person/institution to trade a maximum of 10,000 contracts. If you scalped 1 point on 10,000 contracts, that's a profit of $1,000,000.

How I traded it:
The market was moved up nicely by lower oil, better than expected Retail Sales (up 1%), and I was on the long side of it.
The Crude Inventories came out, and the market turned, and I was on the short side of that trade as well.

In this case there was no technical trading involved, only news trading, this is not rare, but cannot be sustained everyday as there is market stagnation some days.

And you thought the NYMEX scalp was noteworthy?
Hah!

I used exactly $50,000 to make $8,272.50. That's a hefty 16.54% return on your money.
But don't take my word for it, listen to why everyone else loves to scalp the E-Mini Futures:

-It's generally liquid enough. Market orders are instant..
-The spreads are never going to be huge like they can get on stocks.
-One can day trade without needing $25,000+ as a min. requirement
-Most people dont like having to list out every single trade on their taxes. With futures you don't have to.
-Focusing on one instrument day in and day out is less complicated and more productive, than scanning 50 stocks
-I can sleep in! As I dont have to wake up at 6am and scan for stocks to trade
-Share size allocation is easier. I trade from 3-8 contracts depending on the setup
-Some people said they held a stock that plunged 20 pts due to random company event. While economy reports move the futures. You can hop on the train at any point after good/bad news for a scalp.
-You will pay less taxes..
-You can bet directionally with the news..
-There are always shorts avilable!
-Comissions are reasonable (I pay around $4.10/round trip)
-No uptick rule, meaning you can short on a downtick instantly...whereas stocks you have to wait for an uptick (someone's buy order) to short the market

Check out my inspiration. Austin Passamonte from Coiled Markets E-Mini Trading. He consistently makes $15,000 a day trading the futures markets. He is up 500% this year alone. Way to Go!
His free series of day trading futures videos can be found HERE

More to come and thanks for reading.
-CalTrader

28 comments:

Tyro said...

Shee-ow! Way to go!

I've been trying to paper trade the ES for a little while now, but to no success. Maybe I just haven't figured out good entries & exits yet. Maybe because it moves so little :)

I can't wait to see you build upon your success. Talk about inspiring for the rest of us!

estocastica said...

Wow! Nice work.

Tyro said...

Cal, did you fork out the $500 for Austin's video tutorial, or have you just been watching his free videos?

TradeDemon said...

congratulations! - that is very impressive.

I trade the DOW Mini (YM) - just started a blog - if you want you can link me at:
www.tradedemon.com (tradedemon.blogspot.com)

Anonymous said...

Whoa nice Cal! I think i may look into emini trading.. I look forward to reading more of your trading stories on the emini's.

JP

Cal said...

I've been watching training videos for the past month. Never took a single trade until I had some "know-how" on this issue as with any financial vehicle in my investing experience. It paid off in a handsome manner, and I'll continue to practice money management using protective stops. News is the way to go, it's like seeing the weather forecast for the day and being prepared for it.

thanks guys for the comments

Anonymous said...

Very nice Cal! My kind of trader.

At 90 contracts, you’re better off trading the big S&P rather than the e-mini, you’d save a lot on commissions.

However, 90-contracts is impossible on $50k due to initial margin of ~$2k per lot. Are you trading prop?

doli said...

Cal,

If you make a pile when beginning, then you may become addicted. Always looking for that rush you got at the beginning, going broke in the process. With the futures, you have more leverage. Leverage is a double-edged sword. Without a stop, you could just as easily have lost as much as you made today. So, use stops. Take small losses.

Phileo said...

Congrats Cal on the win!
Now you've gotten me interested in trading E-Mini's as well......

XO said...

Well done!

Now you've got me doing my research - you gotta love the liquidity!

What % percentage of your portfolio were you risking - R on each trade?

Cheers!

Anonymous said...

Keep up the nice trades and be careful because the leverage you are riding is far more than your $50000 mentioned. For example if ER2 goes up 2% and you are on the wrong side then you lose $14000 on those 9 contracts. It sounds to me like that website is basically a sales pitch because he never shows his actual trades but rambles on about stuff. I would never hand that dude $500. If you have then explain what you have gotten out of it?

jake said...

well done. thanks for the link to austins free videos ,greatly appreciated.
when u say $50K is that 50K before leverage (meaning many times more than 50K actualy in play)? or total 50K worth of equity?

jake said...

ok after rereading ur post it seems like u traded with margins.for real real beginners like me it was confusing and still is to a small extent, bc u say u used exactly 50K hows that possible?
btw i'm a guy looking into daytrading futures who's never made any kind of day trade in his life but has decided after some research that this is the way to go (for my financial situation {low}) so please excuse the fact that i sound like i have no clue because i don't ,but am still determined to try this. thanks cal love the blog.

deadly.chemist said...

Beautiful, simply beautiful.

Cal said...

Margin guys, yes.

Anonymous said...

you freakin' rock man, keep it up and you'll have your own hedge fund one day

I'm listening to that new song from the Nintindo wii commercials

http://dyn2.uneasysilence.com/Yoshida_Brothers_II_12_Kodo.mp3

Anonymous said...

Please update us on your daily trades so we can learn more about e-minis?

Anonymous said...

Did you hit 5k again today?

TradeBot

Aurelien said...

If you guys are interested in trading but afraid of the quick big loss possibilities, then I would suggest trading options on the SPY. What I like to do is use the futures for entry signals and then buy a SPY ITM put or call (depending on direction im looking for market to go in). This works well if you have a small account because you can get one contract for 200-350 dollars easy. Every point the SPY moves is worth $60-80 depending on the option delta, so a 10 point S&P move is worth $60-80(the SPY is 1/10 the size of the S&P). 10 point moves happen at least once a week, so tHis method has nice profit potential, and the loss is limited to the amount you pay for the option, so 200-350 worst case.
As an example today I made 125 on an investment of about 600 in about 10 minutes. Nothing close to making $8000, but if you have a smaller account this return every few days is quite nice.

Anonymous said...

cal ur slackin off there, big moves on futures today (thursday)no entry from u yet though 12AM friday. and i see the deep thought u put in to ur three word response. must have been a ruogh ride today.

Cal said...

Hey everyone. I didn't trade today. Yes I missed a big move, but I don't want to be greedy, and I needed some well deserved sleep after a big week with final exams, and no sleep what-so-ever. I'll look for some setups Friday, if I punch in, I'll post. What I've learned is that sometimes it's good to be a bystander, over-trading will only reduce profits.
Thanks for all the comments!

Anonymous said...

fair enough

Rafitax said...

Well done...
and thanks for sharing...

Ragin' Cajun said...

Hey Cal, please participate in my new contest. I would love your insite

jp said...

Ahh i hear ya Cal, final exams for me too next week.. its best to sit it out for a days during exam week. GL tradin next week.
JP

Anonymous said...

what do you use for news? any special or free service or just the tube?

Almighty Jilbear said...

http://jilbearinvests.blogspot.com/
This is better for those of you just getting into the market.

Anonymous said...

Cal,
Awesome! Could you please give us some details on what you got for $500 from Austin. Is it training videos? What does the training videos teach? Some indicator , Moving avg, price patterns ..?