Futures trading is not for the risk-averse.
If you're familiar with the risks and rewards of futures trading, you probably know of the E-mini. The "E" is for electronic, "mini" means this trading vehicle is a "miniature" version of a full-size S&P 500, Dow, or Nasdaq Index futures contract.
For example: 1 point in the full S&P 500 contract equals $250. But the S&P E-Mini's value is equal to 20 percent of the full contract, so 1 point is $50. This can make index futures trading more affordable.
E-minis are one of Master Trader Dick Diamond's favorite trading vehicles. He calls them the "best day-trading or swing-trading vehicle to come around Wall Street ever!"
Diamond has undertaken what he calls "primary studies" of ten technical indicators, and his approach to E-minis trading is based on what these indicators show him.
You may recognize some of these indicators; the definitions are edited summaries from Diamond's trading manual:
1. Moving Averages reflect the direction of a trend by smoothing the price and volume fluctuations (or "noise") that can confuse interpretation.
2. Moving Ribbons identify changing trends by placing a large number of moving averages onto the same chart.
3. Commodity Channel Index (CCI) is an oscillator that mostly fluctuates between -200 and +200. Specific CCI readings help determine overbought/oversold territory, and serve as buy/sell signals.
4. TRIX displays the rate-of-change percentage, of a triple exponentially smoothed moving average of a closing price.
5. Keltner Channels are "envelope" indicators based on volatility, which help determine overbought and oversold market conditions.
6. MACD Oscillator is a trend-following momentum indicator that shows the relationship between two moving averages of prices.
7. Williams %R is a momentum indicator which measures overbought and oversold levels.
8. Stochastics is an oscillator that measures the market's relative momentum in the current time frame.
9. Walter Bressert Oscillators are based on the cycle analysis and trading methodology developed by Walter Bressert.
10: RMO or Rahul Mohindar Oscillator, the associated tools and indicators developed by Mr. Rahul Mohindar of VIRATECH.
What matters is how these technical analysis tools are used by Diamond in trading the E-minis, and other trading vehicles.
He goes into full detail in Dick Diamond's Market Mentor Trading Course.
For example, he tells you what to look for in the moving averages which could indicate that "an explosive move is imminent."
Diamond also spells out what to look for as the market opens, so you'll know whether prices are likely to rally or decline in morning trading.