Eminis

[mikoolwong]

Hi all.

first up-apologies if there is a similar previous thread, if there is, please link it.

I have always had a fascination with the sharemarket, but havn't done anything. I just recently went to a **************** info night and got quite interested in eminis.

So, I thought I would gather all the experienced users thoughts on eminis. I am a total beginner, about to turn 20 and have around 5k that i want to play with (**************** 7k membership seems a little steep-but I like the idea of the mentoring etc the claim to offer)

any suggestions whether to actually trade eminis? or to trade xxx as beginner?
any suggested products/services/programs/webinars to help the quest? and any advice on what not to get into/buy

note: I'm not asking for spam, or asking for lists i can find on google, i'm looking for suggestions from real people with experience with their suggestions that they have tried.

Thanks in advance to all for participating.

 

[Timmy]

mik, that is a very broad and vague sort of query ... not that there is anything wrong with that given you are just beginning ... but you are probably inviting some experienced emini traders who are interested enough to spend a month typing stuff out ... not that there's anything wrong with that either but you may have to wait until one sees your questions.

To get started have you done a quick search here on the ASF site? Sticking emini into the search brings up 18 threads ... which is a manageable amount.

https://www.aussiestockforums.com/forums/search.php?searchid=1111406

Whether to trade eminis or start with something else? I don't know you, too many variables to advise really. You will be up against it though starting with eminis, but you need to find out more about them, and more about other alternatives.

Don't dismiss a Google search ... there are no shortcuts, or no worthwhile ones anyway. Time spent just reading and absorbing will be well spent. you are 20...plenty of time.

Sorry to put it back on to you ... but if you wait someone will be along to tell you something different ... its all good!

 

[mikoolwong]

thanks timmy.

I've been reading up on it all since I've posted and as i was posting. But the major problem I find is I don't understand half the stuff I read. Which in many ways is a good thing becuase I've learnt so much already to understand more things now!

I realised it wasn't such a good topic and hesitated posting. But I thought if the general consensus of experienced traders is not to start with emini then I'd listen to the experts advice..if you know what I mean.

Basically I personally feel that eminis would be good...

Some general ideas i've got so far, please correct if they're wrong, the index trading is not really affected by "gossiping trends" on the stock market, so if there was a major crash for one stock, this wouldnt really affect me trading an index, because its not one stock. that for emini you can make money if price goes up and down, you get the money from the difference at which you buy the emini compared to selling it. (but I still don't get exactly how you make money when the emini price goes down)

Perhaps more on a personal note I can ask you all how you first started trading too. In which market and how did you get to your first trades ie: learning through books or seminar or google...

Thanks again for input

 

[Timmy]

It is probably easiest to start with trying to understand the futures market for agricultural products, I think its easier to understand the market when you can relate it to a physical product. Try a local library for books about an introduction to the futures market. Don't worry about the sections of the book that will outline trading methods and strategies for speculators, most of this information will be irrelevant and unreliable, just look for a good introduction to the market itself and how it works.

If the local library doesn't have much, try a bigger library or even wander into a university library.

There are some online resources that will provide a brief introduction, such as:

http://trmep.tamu.edu/cg/factsheets/rm2-1.pdf

http://www.investopedia.com/university/futures/

http://futures.tradingcharts.com/tafm/

Once you have a grasp of how a futures contract and a futures market work then move on to understanding financial futures, such as interest rate products and equity index products (the ASX/SFE website can help here).

What market to start your trading in? Maybe others will have stronger views on this. I suppose generally the progression is to start with shares then move on to faster-moving, leveraged products (like FX, futures). That is probably a sensible progression but the key is to understand each of the markets, what they are, how they work, what your risks are (this is critical). In FX, especially, there are many 'simulator' platforms, where you trade real prices but with pretend money, on a real dealing screen (except the trades are not executed in reality). This is not a perfect method, there are constraints, but its not bad. The demos are free. Have an experiment with these during some busy time periods in the FX markets and you will get a feel for the speed of movement of the FX market, and also some idea of the emini futures market. This experimenting doesn't have to take too long, although budget to spend a reasonable amount of time (maybe at least 3 - 4 weeks) to get an intitial good feel for a leveraged market and how it moves at different times and in different circumstances.

Also, beware of vendors selling specific products for specific markets. Like the product you have seen to trade emini equity indices. You will only receive information from vendors favourable to their product, thats their job. It is going to be up to you to dig a little deeper and critically assess what they are saying. The example you use of an index being immune from single share issues ... yeah largely true, not wholly true, and is the sort of thing a vendor of index-trading programs will tell you. What they wont expand on is the plenty of other risks to consider. Remember, someone selling a product to trade an equity index is going to tell you things that are favourable to their program. Sorry to sound like a cynic, but an understanding of sales and sales techniques can save you a lot of time and money in your own journey.

Me personally, I started with books that explained the workings of the markets, their function, the mechanics. It sounds a bit boring, but it doesn't take long (you should get a good grasp on the subject from a good book in only a few hours) and it equips you to understand ANY market in the future. An active interest in economics I have always found useful.

Have a look at this forum, too, at some of the active posters on short-term trading activities and techniques.
Trembling Hand is an active intra-day futures trader.
Tayser is an active scalper in the FX markets.
Tech/a is active in speculative shares.
3 different markets & different techniques, might be instructive.

Hope this helps.

 

[chops_a_must]

So, I thought I would gather all the experienced users thoughts on eminis. I am a total beginner, about to turn 20 and have around 5k that i want to play with (**************** 7k membership seems a little steep-but I like the idea of the mentoring etc the claim to offer)

Bludy hell!

So they tried selling you the system knowing you only have 5k, and have never traded shares let alone futures!!? That's criminal.

Firstly, don't trade any futures if you only have 5k.

Secondly, don't trade futures if you've never traded shares. You will get killed.

Thirdly, don't do it.

If you must do it, trade the index etf instead. You wont be smashed like you would with the e-mini, and you can look at what is happening with your expectancy and your account. But you probably don't even have enough to do that!

But with 5k you will most likely lose the most of your capital, on a normal string of losses, and you wont trade no more.

If you don't understand shorting, there is absolutely no way you should be considering this. Read a couple of books, dabble a bit in shares, and if you happen to know what you are doing, come back.

 

[Trembling Hand]

How evil is that word "eminis"?

The difference between its real name Futures which already suggest something a little confusing and the task you have trading(ie pick future price movements)

Compared to eminis which is like some friendly fairy tale word that relaxes the punters so you can avoid the details and feed them the sales pitch as their mind is now charm and malleable.

EVIL!! ABSOLUTLY EVIL (oh sorry the other word for it is marketing)

 

[MRC & Co]

If you must do it, trade the index etf instead.

Chops, do you know any index etf's for Australian indices?

If not, what are the codes for the US index etf's?

 

[gfresh]

http://www.asx.com.au/investor/lmi/types/classical_etfs.htm

 

[MRC & Co]

http://www.asx.com.au/investor/lmi/types/classical_etfs.htm

Great, thanks. Should have looked on ASX myself.

 

[Rockhoundnz]

Use of the term "E-minis".

This post is an answer to questions that TremblingHand had about the term "E-minis" in the **************** thread, which has now been closed.

Quote:
Originally Posted by Rockhoundnz
What's wrong with "eminis"? It's more specific than "futures" and the name is used commonly amongst traders including the floor traders.

Quote:
Originally Posted by TremblingHand
No its not. Tell me whats the difference between Futures contracts and your "eminis"??

What floor traders?? the only futures exchange that still has trading pits is NYBOT & a couple on the CME. I don't see what you mean about "floor traders" what have they to do with anything? They account for a tiny portion of futures contracts. And are mostly covering Agriculture.


"E-minis" is the common and sometimes official term used to describe the electronically-traded mini-sized futures contracts available for trading against the S&P 500 Index, Dow Jones Index, several other indexes and some currencies through either the CBOT (Chicago Board of Trade; the Dow eminis) or the CME (Chicago Mercantile Exchange; S&P500 eminis). The term is basically an abbreviated version of the official terms which, in the case of the Dow, is the "mini-sized Dow ($5) futures contracts", although the CME use the term officially (e.g. the CME E-mini S&P 500).

As mentioned, these contracts are traded completely electronically - there is no "pit" with people yelling at each other to buy and sell. However, there IS a pit for the S&P full size futures contracts (and also for some other futures), and traders pay hundreds of thousands of dollars to buy a seat in the pit as there are distinct advantages in being in the pit which include saving massively on commissions (like paying about 15% of the normal commissions) and being able to front-run large buyers. The floor traders either represent large firms or institutional buyers like Merrill Lynch (these traders are often known as "paper" and probably account for most of the full-size futures contracts being bought or sold), or representing themselves (these traders are often known as "locals" and they can buy and sell from/to paper, each other, or electronically as they please). The floor traders will sometimes choose to buy or sell Eminis instead of the full-size contracts, and refer to them as "E-minis" to distinguish from the full-size contracts they normally trade. The pit audio commentator (he sounds like a commentator at a very fast auction) will also refer to this by calling something like "locals buy Eminis".

So, the term is used to clearly separate the full-sized futures contracts (what you might call "the domain of the big boys") from the mini-sized contracts (what you might call "the domain of newbies and smaller players").

I hope this helps to explain the use of the term.

 

[Trembling Hand]

Re: Use of the term "E-minis".

So, the term is used to clearly separate the full-sized futures contracts (what you might call "the domain of the big boys") from the mini-sized contracts (what you might call "the domain of newbies and smaller players").

Completely disagree. The ES (S&P 500 mini contract) Is controlled by algorithm trading. To call the most liquid high volume futures contract a smaller players contract is very wrong. The pit contracts are dying a slow death and it seems your info is about 10 years old.

 

[Timmy]

Rock, check out the relative volumes on the pit-traded S&P500 versus the ES. Typical volumes (and these are top-of-the-head figures only) of the full-size S&P 500 are around 30,000 contracts traded in the pit per session (yes more for the few days around the quarterly roll period). Compare this to the approximately 1.3 million contracts traded during RTH for the ES.

Even allowing for the full-size contract being 5 times the ES in size, the ES still trades 4 to 5 times the $ amount of the full-size contract. In all respects the ES is now the domain of the big boys too... Viewing the ES as the domain of newbies and smaller players, like TH says, is about 10 years out of date.

 

[nighteyes]

Mik

Check out **************** (eminis). He was one that looked interesting.

When i did my reseach, I only found 3 that I chose to look into

1. ****************
2. ****************
3. ****************

Rockhoundnz went for ****************and I am most interested to follow his progress.

I went with ****************purely because they had a presence in Australia

I dont know of anyone who went **************** but they would have been my preference (I'd already signed up by then)

The more senior posters have it spot on, it is futures and is not for the real noobs so be careful.

My progress so far with **************** is encouraging but I am not live yet, and most definitely dont believe in all the promises.

My take is, whatever you do, dont go it alone, use something that has track record. WayneL, one of the more senior posters, mentioned some free IRC trader's room that might be worth checking out.

What ever you do, DON'T put real money in until you are ready to take the risk.

Good Luck

 

[Rockhoundnz]

Rock, check out the relative volumes on the pit-traded S&P500 versus the ES. Typical volumes (and these are top-of-the-head figures only) of the full-size S&P 500 are around 30,000 contracts traded in the pit per session (yes more for the few days around the quarterly roll period). Compare this to the approximately 1.3 million contracts traded during RTH for the ES.

Even allowing for the full-size contract being 5 times the ES in size, the ES still trades 4 to 5 times the $ amount of the full-size contract. In all respects the ES is now the domain of the big boys too... Viewing the ES as the domain of newbies and smaller players, like TH says, is about 10 years out of date.

Fair enough, I really did write that bit without thinking. Let me rephrase my statement: The full size S&P is the domain of the big boys alone, and E-minis are the domain of the big boys, small players and newbies. That would be more accurate wouldn't it?

 

[Timmy]

... And sleepy Aussies and Kiwis like us

 

[nighteyes]

Rock, check out the relative volumes on the pit-traded S&P500 versus the ES. Typical volumes (and these are top-of-the-head figures only) of the full-size S&P 500 are around 30,000 contracts traded in the pit per session (yes more for the few days ........ date.

Timmy and TH

I hear what you guys are saying, eminis has taken over where futures left or is leaving off, but surely Rock does have a point, you do need a way of differentiating the two.

Sure eminis may not portray the same connotations as futures today but over time this will change.

Guess they could have called it futures 2 or something similar.

 

[Rockhoundnz]

Re: Use of the term "E-minis".

Completely disagree. The ES (S&P 500 mini contract) Is controlled by algorithm trading. To call the most liquid high volume futures contract a smaller players contract is very wrong. The pit contracts are dying a slow death and it seems your info is about 10 years old.

Agreed - see my reply to Timmy. Do you agree with the use of the term Emini though? - which was, afterall, the point of the post.

 

[nighteyes]

Re: Use of the term "E-minis".

Agreed - see my reply to Timmy. Do you agree with the use of the term Emini though? - which was, afterall, the point of the post.

I quite lilke eminis but I can see where TH is coming from, kinda like the cigarette guys coming up with a new product called chocotine .. or the @#$^ on foxtel at the moment offering poker training and equating it to scoring soccer goals

 

[Rockhoundnz]

Re: Use of the term "E-minis".

I quite lilke eminis but I can see where TH is coming from, kinda like the cigarette guys coming up with a new product called chocotine .. or the @#$^ on foxtel at the moment offering poker training and equating it to scoring soccer goals

mmmm.... chocotine... where can I get that?? Hehe...

Yeah, it's a fair point, but they do need some way to describe the size difference between the small contracts and the big ones. How about Futurettes?

 

[nighteyes]

Re: Use of the term "E-minis".

mmmm.... chocotine... where can I get that?? Hehe...

Yeah, it's a fair point, but they do need some way to describe the size difference between the small contracts and the big ones. How about Futurettes?

c
LMAO. Thats cute, kinda gives the American Cheerleader feel to it.

If you get an unexpecteed phone call, its most likely the CME Marketing department?

btw are you live with your lot yet? Mine went well for me until they introduced new indicators. Lucky I am not live yet.