Advantages of Trading Eminis over Stocks

Published: 21st January 2011
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Trade stocks or eminis? This could be one of the questions that traders around the planet are thinking now in their desks. If you're one of those traders, and you have come to a decision that day-trading stocks isn’t for you and have selected to find out how to trade eminis.
As you'd guess, you're not alone. Many traders who've struggled day trading stocks regularly attain success in emini futures contract trading. Though more unpredictable, futures do offer an amount of comfort over time as the trader becomes used to how emini contracts trade and respond to market conditions.
Here are some reasons why other traders prefer eminis over stocks:

Liquidity

If you're trading stocks, you'll have realized that many individual stocks aren't extremely liquid. The Eminis alternatively are one of the most liquid markets in the world, with little slippage
Competition

The NYSE stocks trade in a pit with specialists using the spread, scalping with minimum costs per trade, a massive benefit over the general public. The field isn't level. Experts aren't in business to lose money.

Emini trading is done electronically without a pit and without neighbors exploiting the spread. It's correct that huge Emini traders who are the owners of a seat on the exchange and trade size" have a cost advantage, but by consequential standards, their costs aren't far lower than the retail" traders. Any Emini trader can now trade around turn" for $4.80 per contract.
And retail costs have been dropping. They will possibly keep falling.
Preparation

Trading stocks does not always involve stock elementals. But stock basics, including the stock's story," can help resolve whether you need to favour longs or shorts. As an example, if you are trading the stock of an organization that has just presented a treatment for cancer, you may favour the long side. But you need to dig and read fantastic sources to find good basic stock information.
And even if you are not trading with stock fundamentals, you have still got to search loads of stock charts for technical setups and chart patterns. This can take hours per day. Day trading the eminis doesn’t necessarily involve anything like stock fundamental analysis.

Size


Trading stocks needs a $25,000 minimum in your account. I believe the state stepped in to guard us from ourselves. You can trade the Eminis with as little as $2,000 in your trading account, which makes it possible for almost anybody to daytrade the hEminis.

These are some of the reasons why many traders prefer emini futures trading over stocks. There are just so many benefits in emini trading that traders around the world are following this path.

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Source: http://jeff5.articlealley.com/advantages-of-trading-eminis-over-stocks-1979243.html


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