SP 500 Futures More

By Chris on 2012-08-11 in E-mini Trading (0) Comments

SP500 Futures

A few things you should know about the sp500 futures with respect to trading emini and the attributes of this contract. This contract and these characteristics should be known by all traders who are interested in trading the sp500 futures. This can easily be the best contract to begin your trading of the emini futures. First we'll look at the contract details for the ES and then we'll discuss what you should look at from the beginning and through your trading journey.

Contract Attributes ofSP500 Futures

First of all if you don't know by now the sp500 contract trades in tick sizes of .25 with a full track of 1 point. If we're trading at 1300 and we move up to 1300.25 then that is 1 tick. If we trade at 1300 and move up to 1301 then that is a 1 point move. So you have 4 ticks per point and each of those ticks is equal to $12.50 while a full point is equal to $50. What do you control when you are a buyer or seller of the sp500 futures? Trading the sp500 futures requires something from you in the way of margin and for most that will be somewhere around that $500 mark/contract and the ability to maintain at least $1,000 in an account. When you purchase the sp500 futures you in fact are in control of quite a bit through this margin and you should not take this lightly. We'll assume the same 1300 price from the example above and look into how much you are actually controlling when you place a trade. To figure out how much value you actually control simply take the price of the contract and multiply that by the point value of the futures contract you are trading. In this case we'll take 1300(price of contract) x 50(point value) = $65,000. That's a hefty number and you can understand now that there is risk to trading the sp500 e-mini futures and any other futures contract you decide to trade. Be aware of this leverage you are obtaining and make sure you are aware of stop losses and trading plans.

Most important support levels to watch when trading the
sp500 futures

The most important levels you should watch when trading the sp500 futures are the pivot point levels. Make sure you have at the very least the pivot point, support 1, support 2,resistance 1, and resistance2. What I do in my own trading normally doesn't involve anything outside of those though you yourself can find value in s3 and r3. Remember though that sometimes these levels are exact and just when you think it will be exact support or resistance again it of course is not. I would be reluctant to use these levels as exact numbers but areas of concern in which I establish ranges give or take a few points on both sides. In a lot of cases you can think of these levels in the sp500 futures as easy targets for other traders to take advantage of you. So understand how you can take advantage of other traders in these areas. Be reluctant to use pivot points in a way that everyone knows at all times, but don't be afraid to look at them for support or resistance. To conclude let's make sure that we pay attention to the importance of pivot points and understand value and dangers of leverage when trading the sp500 futures or any other contract during a trading day.

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FULL RISK DISCLOSURE: Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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