Posts Tagged ‘emini trading’

best emini trading time frame

Sunday, March 29th, 2009

What is the best emini trading time frame?

Not all trading is created equal. Different profit objectives and certainly different time horizons means that no 2 traders are created equal.

Let me elaborate

Trader number 1 trades on a 1 minute time frame and seeks a 1 point profit many times throughout the trading day.

Trader number 2 thinks this is an absurd approach as she trades and a 15 minute chart and will hold a trade for 2-3 days in order to capture outsized gaps that can produce 10- 20 points of profits

So while I have heard the mantra that futures trading is a zero sum game, i.e. for every buyer there is a seller, and thus for every winner there is a loser, that statement is far too simplistic and does not accurately convey the truth about the markets

There is no right and no wrong profit objective for a trader, and there is equally no right or wrong time frame. The parameters a trader sets out are more closely related to a trader’s personality than anything else.

Trader #1 goes long at a price of 805 in the Emini SP with a 1 point stop and a 1 point target on the trade. A pure scalp

Trader #2 goes short at 805 effectively selling the position to trader #1. She has a 10 point stop at 815 and a 3 day profit target of 780.

The markets ebbs and flows grinding its way up to 810 allowing trader #1 3 more opportunities to lock in single point wins, while trader #2 holds her trade and waits.

Which trader is right?
Both traders are right. For each time frame and for each profit / stop parameter there is a profitable and a non profitable trader.

Select a time frame that is compatible with your personality, obey your time frame, and learn to recognize the markets ability to provide opportunity in your time frame.

Some popular time frames for emini SP trading

Scalping

  • 1 minute / 20 + approx. trades per day
  • 3 minute / 7-10 approx. trades per day
  • 5 minute / 5 approx. trades per day

Day Trading

  • 15 minute / 2-3 approx. trades per day
  • 30 minute 1-2 approx. trades per day

Swing Trading

  • 30 minute 1-2 approx. trades per day
  • 60 minute 0-8 approx. trades per week

Scalpers or Active intra day trader who like to take multiple trades in a single day also favor Tick Charts.
A tick chart is based on market activity and not time frame. A tick chart will not print additional bars in a slow market but will print more bars in a fast market. The bar or candle is printed depending on the parameter set. E.g a 300 tick chart will print a candle or bar after 300 ticks have traded

(more on tick charts in my next article)

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