Understanding Dow Futures – Part 9

The Emini futures is basically an electronically traded futures. This was started in September 1997 to attract the investors who were not trading into trading index futures. Emini Dow futures is based on the Dow Jones Industrial Average index. According to Dow 30 futures for every one point, $50 is gained or lost.

Trading Dow futures is based on the foremost market averages and index viz Dow Jones Industrial Average. Dow 30 index is widely followed and commented on by dealers from the worldwide.

Dow Emini futures offer great chance for variety of traders. A lower margin is one of the many reasons why traders are turning to this system. There are innumerable advantages of this form of trading. Showcased underneath are some of the few reasons of choosing this easy and safe method of trading over anything else:

Due to lower margins, day trading this financial instrument has become popular with average retail traders. It is great for those who open and close their positions over the course of a single session. It has an edge over those day trading stock. The margin considered is only 1/5 th margin of the actual position.

Leverage is an attraction of traders to futures. Undoubtedly leverage is the tool that talented traders use to make real fortunes.

Advantages Over Stocks

There is always confusion when one need to choose between two identical stock trading opportunities. In Emini futures the whole world is a market and with whatever you have chosen, the index futures represent the entire stock market.

With a robust Dow Futures system, the new futures traders minimize the risks of diversification and hedging. Also it helps to minimize the number of decisions he makes and provides maximum coverage of the stock markets.

Trading this using the computerized technique of trading is easy, safe and straightforward as compared to trading stocks. Following a handful of stocks means trading a portfolio of 15 to 20 stocks.

A huge part of realizing what is working for an individual is by trading on Emini futures before moving on to the standard contracts that involves greater money.

Emini index futures is well-organized with averages, stochastic, trend lines, Fibonacci retracement, short-term cycles and similar technical tools. It is also a tool for the discretionary traders to trade their opinions on news say Federal Reserve Board announcements, typical end-of-month bullishness among stock money managers, or other event-driven phenomena.

This electronic scheme offers great earning opportunity in gain as well as loss. Trading Dow Emini futures has advantages over open-cry trading and have exponentially higher advantages if looked on an intraday basis.

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