Day Trading E-mini Index Futures - 9 Key Trading Concepts

Today I'd like everyone to welcome back Marc Nicolas from Marc would like tip his hand a bit regarding his methods for trading the E-mini and how he tries to avoid being the 90% of traders that lose money! Please feel free to comment below with any questions or insight for Marc, and be sure and check out his site for a free webinar.


Trading is inherently risky, but by following nine fundamental money management rules, you keep your capital safe while building your trading experience.

Our 9 rules to keep you in the 10% winning club vs. 90% of traders who lose money:

1. Look for high volume markets with a thin spread - Orders are filled quickly and it has high volatility so there are opportunities for 2 to 4 good trades during the day. The E-mini S&P500 Index Future is a good example of this type of market (Each point is worth $50, split into 4 ticks of $12.50 and there are 4 contracts a year, traded on the Chicago Mercantile Exchange).

2. Only risk 1% of your capital per trade, then your capital can absorb 100 consecutive bad trades - Even the best systems can expect 20% losing trades, so the 1% rule gives you room to maneuver.

3. $10-$15k is the minimum capital you should have per E-mini S&P500 contract traded - If you lose $1000-$1500, it only represents 10% of you capital which is recoverable compared to a $3k account where the same loss equals 50% of your account. Consequently, you are more likely to lose the remainder of your capital rather than recover the loss.

4. Limit the hours you trade – We prefer the first 60-90 minutes when typically there is a good trend before the lunch time chop – many professional traders trade this time period.

5. Limit the number of trades you make per day – 2-6 is good as the E-mini usually has up to 3 trends per day and you should aim to catch 1-2 out of the 3. Overtrading racks up commission fees and increases the risk of revenge trading. A few ticks loss per trade quickly mounts up - 4 trades fired like a machine gun can easily become four losers, at 8 tick stops, that’s $400 loss, 4% of a $10k account. Patience is key, stalk trades.

6. On any one day stop trading when losses hit 5-10% of capital, which is recoverable, and indicates you are reading the market wrong, so stop, evaluate your errors and record them in your Trading Journal.

7. Keep a Trading Journal listing all your trades - Over time the mind dismisses bad trades and habits. Include annotated charts, and notes about your emotions. Key things to note:
- Are you trading your account and not the charts, taking desperate trades having made a couple of losers, rather than treating each trade uniquely?
- Are you taking negligible signals because you have missed a good move, resulting in chasing a trade which you are stopped out of on a minor retrace, or you opt for a counter-trend trade purely on the thought “it can’t possibly go any higher”?

8. Base your stop loss and target strategically from the charts, not an arbitrary number of points - For example use price levels at double tops, swing highs and lows, or pull backs to moving averages. Then you can place tighter stops and take higher profit to risk ratio trades by keeping your focus on the chart, trading what you see, not what you think or feel.

9. Be patient between one EMA, or pivot, to the next - This is one of the hardest things to master. To help, trade at least 2 contracts, keeping 1 for 2-3pts, whatever your first target is, and then let a runner go with a break even stop. If it goes your way you add gravy to the first. One good runner is hard to beat with lots of scalps, your results will amaze you.

Marc Nicolas

To learn more about’s techniques you can join us for our free New Year Webinar 5th January 2010 16:00 EST. We only do three of these a year so it promises to be something special.
Register here…

17 thoughts on “Day Trading E-mini Index Futures - 9 Key Trading Concepts

  1. these some amazing guidelines i never thought about before, but now they all make great sense and very true . i will put them down in my trading plan for sure . and i always wondered why 90% of traders loose!!
    thank you mr marc nicolas

  2. Good article. So very true. Still working on following all of these rules. helps a lot with that.

  3. Keeping a trading Journal is one of the most important things you can
    do fro your trading.
    Keep a Trading Journal listing all your trades - Over time the mind dismisses bad trades and habits. Include annotated charts, and notes about your emotions.
    do this by taking snip it pitcures of your trade, it helps you stick
    to your trading plan.

  4. Good point on limiting the time to trade; some only trade the first hour, some say "two wins and done," some trade only the most active 2 hours for each product. Over trading costs money and gives back winners.

    How about: "Don't listen to talking heads"?

    "Plan the trade and trade the plan." Picture in your head exactly what a winning trade looks like and then follow through when you see the setup.

  5. Hi Marc,

    Thank you for your article. The beginning of #9 is what I didn't grasp to well when you said "Be patient between one EMA, or pivot, to the next...", can you clear it up for me?

    Thanks and Regards,

    1. Hi Johnny,

      It simply means be patient and wait for price to move all the way between two levels of support and resistance, however you identify them eg: Two Moving averages of different length or two different calculated pivot levels.

      If I come in the morning with a clear support number lets say 1115 on the ES and a target say of 1133, the most difficult thing for most traders is to stay in the trade from the 15 to the 33 long, because if the trade goes your way most traders want to pat themselves by taking profits too early because of fear of loosing them.

      That is why the concept of scaling out of your position from 15 to 33 is so powerful, you satisfy both the immediate psychological need to make money by taking a proportion of your position off after 2-3 points, and then maximize profit potential by holding the remaining proportion of your position right to the target or exiting at break even if the market turns against you with a runner.

      I hope it helps to clarify your Question

  6. Nice article, especially # 2, 4, 8 and 9. Looking forward for the free webinar. Thanks Mark for putting together these powerful rules. Happy New Year to all e-mini day traders.

  7. Great Stuff- I just realized, I always focused my time on the wrong thing, looking for the perfect system to increase success. Yet, when in a trade I stressed to have a position for my account which was too big or too small. The 1% idea you mentioned above is logical, that is what I should be focusing on first, money management.

    Thank you I got ah ha moment
    Maria Q.

  8. Adam,
    I haven't seen any charts, that you do so well, on where gold is heading. Hope to see some very soon.
    Thank you,

  9. Very interesting article. Money management is the most important aspect of trading which is often missed by traders. Point 9 about the importance of a runner is so true, thank you for the reminder.

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