Since many are considering trading e-minis, this topic will probably be of interest to many. I've traded JNPR with some consistency but same techniques don't seem to work on the e-mini NQ for example. If you got a working strategy for e-mini and are willing to share it with us, this is the thread to do so. My excuse for not sharing is that I don't have a working one yet.
Try this: http://groups.yahoo.com/group/SMACDX or go to www.dacharts.com. There are 3 strategies and links to good stuff there on trading the minis. EC Oh yeah... this probably should be in the Futures section.
Now come on, do you really think that there is any real working system for trading e-mini's? Since futures contracts lead the market, and since you don't have the benefit of being on the trading floor where information about depth of orders and other scoop, it is pretty hard to trade emini's. We have authorized a few traders, very profitable, some from the trading floor, to trade e-mini's and all but one has lost money. These guys are expert traders. Not trying to sound "doom and gloom" here, but I have checked out many "strategies" over the last few years, and have not found any consistency trading real money, real time. The people making the money out there would have little reason to share (if they even exist). When using the futures to determine basic short term market direction they are extremely valuable, but not as a trading vehicle...EXCEPT (always an exception )...as a hedging tool (much like how the institutions use them). IMHO.... I would like to read some real stories however
Don, You sound like it's almost impossible to make money daytrading the futures electronically because you don't have a leading indicator. I think with experience an emini trader should be able to identify a few patterns that work most of the time, the critical S/R and time of day, the relationships between major indices etc. With stocks you have to deal with so many variables, MM's, the tape, the futures, the chart of the stock and its fundamentals.
Aw come on Don, its well documented by those who have successfully made that transition that different skills are needed. We know your success has been with NYSE trading and you justifiably are biased. Many futures traders only look for 5 or less trades per day to catch a small portion of a high percentage move. The NYSE tick and trin (for S&P500 futures) and Nasdaq tick and trin (for Nasdaq100) often lead futures moves. I watch the Dow, SOX, MSH as well. I mainly look for divergence in the futures and tick behavior (with NQ) and look for confirmation with another index. I also pay attention to the time (on the hour and half hr particularly) and behavior around stops (within 1.5 pts of round numbers). Just like with most other things, certain times of day are more readable than others and tick and trin directly relate to futures but not individual stocks (even the big caps aren't 100% correlated). A futures trader only needs one type of fairly recurrent pattern to make money, the patience to wait for it and humility to use stops and admit when wrong. I have not attempted to fully quantify my trade criteria and I'm not currently a system trader. I have no long term track record with futures trading to brag about here just thought I'd toss out my 2 cents worth.
You are very astute, it is very difficult to make money trading the "leading indicator" (especially off of the trading floor, as I mentioned above). "Identifying patterns" is something that I have always had difficulty with (the rational not the abitlity to recognize them)...since "patterns" are in the past, and the direction is not (and can not) be known, anticipation is required, and this causes errors (which are a part of trading anyway). Too much reliance on chart patterns generally causes timidity, and therefore a lack of anticipatory entry points. You are right about trading with MM's (I hate to). The NYSE Specialists are mostly just "traffic cops" who direct the orders, and have such strict rules to follow, that they are usually pretty fair. I trade the emini's a bit myself, mostly to hedge intra day positions during short term market turnarounds, and find them difficult to trade by themselves. However, if you are successful in your quest, let us know...and if you're not, perhaps you might try trading equities instead. In either case, good luck!!