E-mini Futures Trading
The reason that E-mini futures trading can be a really good choice for the trader who is starting out in futures trading is that the trading lots for the futures contracts are considerably smaller, so lend themselves to the trader who does not want to risk as much trading capital.
As any trader who wishes to embark into the leveraged world of the futures pit should know, there is a considerable amount of extra risk compared to stock trading because of the leverage that is allowed when buying and selling contracts.
Much is written about huge fortunes that are made when gaining from huge risks taken with maximum leverage applied to a trade. Maybe not so much is written about fortunes that are lost when it all goes wrong and the margin call is made from the broker and everything is lost.
When it comes to trading e-mini futures, the contracts are considerably smaller than their full counterparts and thus enable the e-mini trader to carry a much smaller risk.
For example, when trading 1 normal contract S&P Futures Contract, the point size is equal to $250.
However when E-mini Futures Trading the S&P, the point size is only equal to $50.
So, by trading e-mini futures, the trader is able to implement a trading plan with less trading capital.
Of course, risk is subjective and is not necessarily smaller just because the futures contracts are not so large. Reducing risk with E-mini futures trading must still go hand in hand with and effective Trading Plan.
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