Lots of people day trading the markets claim to have a futures trading strategy that wins 100% of the time or a day trading system that never loses. The fact is all strategies lose some time and most lose a whole lot meaning the majority of the time they execute futures trades. No one plan or trading strategy will ever dominate the markets as some claim they do. The markets will never be beaten or dominated, but you can hop on for a ride on the bull or bear's back so to speak. There will always be losing days when trading futures and those days will not always be the same in terms of the percentages. Let's say for example you have a system that wins 70% of the time and loses 30% of the time. That is great and pretty simple to figure out on the surface. You win 7 out of every 10 trading day's right? Wrong. There is no guarantee on a short-term basis you will come remotely close the long-term numbers. You might win 2 days and lose 8 on those 10 days. Does that mean you are only a 20% winning futures trader? No. Conversely, you may win 10 out of 10 days and that also does not mean you are a 100% perfect trader either. The chart of the left very clearly demonstrates that anything can happen at any time when day trading futures. In just one day on the E-mini ES we see a rise of 50 points up and a 50 point drop down with volume exceeding on average 40,000 contracts per candle on a 1 minute chart most of the day. I had never seen that before and yet it happened. A day like that, even if you are in the best trading room in the world with the best futures trading strategies one cannot predict that kind of insanity in the E-mini S&P 500.
The kind of day trading system you want to have is well rounded in a variety of key areas. First, from a risk to reward ratio, you want favorable trades. It also should limit the down side loss potential on days when you lose on your trade executions. This would be a pre-determined well thought risk management plan. It is also needs to be simple to execution and allows for the disciplined person day trading futures to easily run the futures day trading strategy without confusion. In bullet point format, you want to have all of this in your trading system for the E-mini Futures;
- 1.   Risk to Reward is favorable
- 2.   Small losses and unlimited winners
- 3.   Pre-determined maximum loss amount
- 4.   Thorough risk management plan
- 5.   Simple to execute for disciplined and patient day traders
- 6.   A good trading system should work on all markets not just the E-min
People often ask View My Trades if we have a day trading strategy that can be profitable while "playing" the news announcements. First let us say we don't "play" anything in the markets when trading futures. This is serious business with a lot at risk and we always approach our day trading with a business mind set. If you look at the chart on the right from late 2014 it shows the ES Emini futures during the 2:00pm FOMC announcement. The volatility is extreme with the price action in the S&P 500futures rising substantially in just 1 minute. So much in fact that this run up was typical on an entire days movement in just 1 minute! The key think to note here when learning to day trading is that the news events, such as FOMC here, often retrace most or even all of the first initial moves. In this case it was about 90% of the first burst higher was retraced. If you want to learn to trade the E-mini, look for repetitive movement like this and create back tested statistical data.