21stcenturyeminis Ebook

21 ST
ST C ENTURYPPUBLISHING
CENTURY UBLISHING
21ST CENTURY
EMINIS
How Smart Investors are Making
$1,000 to $5,000 USD per week Trading
Eminis, Starting with as Little as $5,000!
“A STEP BY STEP, SIMPLE, POWERFUL & PRECISE STRATEGY”

Presented by 21st Century Eminis
EMINIS
How smart investors are making $1,000
to $5,000 USD per week trading Eminis,
starting with as little as $5,000!
Disclaimer - Important Information
The financial information in this book is not intended to
take the place of professional advice and you should not
take action on specific issues in reliance on this
information.
In preparing this information, we did not take into

account the investment objectives, financial situation or
particular needs of any particular person.
Before making an investment decision, you need to

consider (with or without the assistance of an adviser)
whether this information is appropriate to your needs,
objectives and circumstances.
Any 21st Century Eminis seminars held within Australia

are conducted by fully licensed presenters in
accordance with ASIC regulations.
.
First published June 2009
Published by 21st Century Publishing

Building 20, 75 Lorimer Street
Docklands, Melbourne VIC 3006
Australia
Tel: 1800 999 270

Fax: (03) 8456 5973
Email: customerservice@21stca.com.au
Web: www.21stcenturyacademy.com
www.21stcenturypublishing.com.au
www.21stcenturyeducation.com.au
www.21stcenturyeminis.com.au
Copyright 2007-9 21st Century Publishing
All rights reserved. No part of this book may be reproduced or

transmitted in any form or by any means, electronic or
mechanical, including photocopying, recording or by any
information storage and retrieval system, without prior
permission in writing from the publisher
National Library of Australia

Cataloguing-in-Publication entry:
How to make $1000 to $5000 per week trading E-minis starting

with as little as $5000
ISBN 978-1-921458-28-6
Would you like to control your own financial future trading E-
minis?
Is the idea of making US$1,000 to US$5,000 per week trading the E-
mini market with an investment of as little as A$5,000 attractive to you?
If so, this book may be just what you are looking for!
It will help you discover why in the past nine years, thousands of
traders world-wide have become successful E-mini traders.
With this book you can find out for yourself how to become a
professional trader and to learn this simple yet powerful trading
technique in the live market.
As a reader of this book you are also entitled to a complimentary
DVD, How investors can make US$1,000 to US$5,000 per week trading
the E-mini market starting with as little as $5,000.
This book plus the DVD will help you find out how to achieve
long-term success with short-term trading.
In this book you will learn a simple, yet powerful trading method
to trade the high potential index market and gain a wealth of
knowledge that can be used for life.
Some of the topics covered in this book include:

• What are E-minis and why trading them has become so popular?
• A step-by-step, simple, powerful and precise winning strategy.
• How to achieve success in live simulated trading before trading
with money.
• How to trade professionally full or part time, anytime, anywhere
and how to succeed with 100 percent online interactive training.
The intended outcome of this book is to assist and help you gain
confidence and experience trading E-minis so that you can join the
traders earning US$1,000 to US$5,000 per week starting with as little as
$5,000. The consistent trading range of the E-minis markets along with
their high volume and leverage, offers a perfect trading environment
for short-term trading.
Each day, multiple high potential trading opportunities occur. You
can profit whether the market goes up or down. Taking advantage of
these opportunities is simple if you have a powerful and precise
trading system.
Whether you want to begin a career as a professional trader or
become a better trader by managing your financial assets more
efficiently, this book can help you become successful.
This book is a start to trading E-minis and if combined with the
dynamic, interactive trading seminars delivered online that are backed
by unmatched professional live market mentorship, this trading system
will build the confidence and skills you will need to effectively and
successfully trade E-minis.
In this book we also mention how to continue your E-mini
education should it be something you wish to pursue.
For those wishing to be successful E-mini traders, fortunately there
are state-of-the-art educational technologies that deliver realistic
market simulations that enable students to gain real experience before
risking real capital.
This is the first exciting step in your journey to earning US$1,000
to US$5,000 per week trading E-minis.
21st Century Eminis have published this book with the intention of
enabling as many people as possible to learn and develop the skills
required to become a successful E-mini trader.
21st Century Eminis regularly conduct popular E-mini trading
seminars at locations around Australia and New Zealand and soon
world-wide.
During the pilot stage of this program over the last 5 years many
traders have learnt this highly profitable E-minis trading system
designed by Australia's most successful E-minis traders by attending
our workshops.
This book highlights and details the issues involved in trading E-
minis as an introduction to this exciting concept.
However, due to the depth of knowledge required to successfully
trade E-minis it is unrealistic for one book to teach you all of the finer
points of successful trading in this topic.
Therefore 21st Century Eminis is making available to every reader
of this book a complimentary DVD on trading E-minis at no charge.
To access this DVD log on to:
Table of Contents
1 What are E-minis? ...................................................................1
A trading career in E-minis.......................................................... 2
Why trade E-minis? ...................................................................3
What is an E-Mini? ................................................................ 3-6
What types of people are trading E-minis?.................................. 6
Some benefits of E minis........................................................6, 7
The Dow Jones......................................................................... 7
Advantages of Trading Mini S&P 500 Futures and Options..........8
What exactly are Mini S&P 500 Futures?..................................... 9
What is the Special Opening Quotation, or SOQ? .......................9
Because E-minis are futures..................................................... 10
Equities investors like the great ‘tradability’ of E-minis................10
Trading the E-mini S&P 500 - an example ................................11
The electronically traded CBOT mini-sized Dow.........................12
Some Facts About the S&P 500 Index ................................13-15
E-mini Case Study - How Marcus made $9,000 in a night
with a $4,000 outlay .........................................................15, 16
Background on the E-mini Contract ................................... 16-17
Summary.................................................................................18
2 Trading E-minis...................................................................... 19
An introduction to trading E-minis............................................ 20
Trading E-minis has many advantages over other forms of
trading and share investment ...................................................20
Trading E-minis....................................................................... 21
To trade E-minis we use three basic indicators.......................... 21
E-mini charts........................................................................... 22
Candle sticks........................................................................... 22
MACD and Stochastic.............................................................. 23
Double tops.............................................................................24
Technical double bottoms........................................................24
Lower lows..............................................................................25
Because E-minis are futures, they offer some unique
additional features..............................................................25, 26
21st Century Eminis advice on how to profit from learning,
understanding and trading the E-mini index........................26, 27
Exit strategies...........................................................................28
How do E-minis compare to stocks, CFD’s and options?..........29
How do E-minis compare to Options?......................................29
How can you be right more times than wrong?.........................30
E-mini market profit potential....................................................30
How do our signals perform?...................................................31
How do I make money trading E-minis?...................................31
How do we identify signals?.....................................................31
Trading Signals - The Power of T3............................................32
What is the cost of trading E-minis?......................................... 32
When to enter the E-mini market...............................................33
When to exit the E-mini market.................................................33
When not to enter an E-mini trade............................................ 33
Trading E-minis - some frequently asked questions...................34
E-mini Money Management..................................................... 35
The Road to Riches. What it takes to be a consistent
winning E-mini trader .............................................................. 35
E-mini trading - risk and reward................................................ 35
Some simple advice for trading E-minis.....................................36
E-minis trading advice from a successful trader......................... 37
Your Trading Plan.............................................................. 38, 39
Mark Douglas.......................................................................... 39
Day Trading E-minis.................................................................40
Summary.................................................................................41
An E-mini Trading Time Table...................................................42
3 E-mini Case Studies............................................................... 43

Trading E-minis - How Dennis does it.................................44, 45
How Bill Trades E-minis........................................................... 45
E-mini trader Glen’s three-step method for long-term
E-mini trading success ......................................................46, 47
Only perfect practice makes perfect ..........................................47
Extracts from an E-mini traders diary................................... 48, 49
Robert Kiyosaki, financial information and financial leverage....... 50
Robert Kiyosaki's Cashflow Quadrant.......................................51
Five key trading tips that every e-Mini Futures trader
should know .................................................................... 52, 53
E-minis - Making Leverage and Volatility Your Allies ............54, 55
Success or failure.....................................................................55
Most people are afraid to fail.....................................................56
Thomas Edison....................................................................... 56
4 Bonus Section........................................................................ 57
Using Dynamic Pivot Points to Time E-mini Moves.............. 58-60
Day Trading e-minis.................................................................60
Would you like to control your own financial future?..................60
Why trade E-minis? .................................................................61
Trading the E-mini market in Australia....................................... 61
E-mini Indexes are the ideal market to trade...............................61
You can spend a day at our E-mini workshop and learn:........... 61
What you will learn at a 21st Century Eminis seminar ................62
The valuable topics covered in the Live Market Online
E-Mini Training Class include: ..................................................63
The 21st Century Eminis course is taught in four stages......63, 64
Are you ready to start trading E-minis?......................................65
Gain confidence and experience trading E-minis........................65
F.A.Q’s for E-minis............................................................. 66-66
What is the next step?..............................................................68
5 E-mini Glossary and Terminology..................................... 69-83
5 E-mini Testimonials.......................................................... 84-87
Index..........................................................................................89
1.
WHAT ARE EMINIS?
“Do not be afraid to stretch beyond your
comfort zone. When you move outside
your comfort zone you will experience fear,
but from that fear you will grow and
achieve success.”
How to Trade E-minis
A trading career in E-minis

Are you sick of your day job, or are you are looking to change your
career? Perhaps you should consider trading E-minis as a job or
business. Trading E-minis offers many advantages over other forms
of self-employed businesses.
If you start up your own business, or buy a traditional business, you
will have a significant outlay of maybe $100,000 and in many cases
much more than that.
A traditional business is very labour intensive, in other words you
put a lot of time into it. You might work ten and twelve-hour days, six
or even seven days a week in the beginning - what is the lifestyle like?
Unless you absolutely love the business there is really very little
lifestyle; it does not exist.
You will need to employ staff in your business and having staff in a
business is probably the biggest headache in business. Having staff is
often like running an adult day care centre. The real challenge with
that is with an adult day care centre, you would actually get paid to
look after people whereas having staff in a business, you have to pay
them.
If your staff make mistakes, you have to look after them as well as
bear the cost of their mistakes. You also have to pay them.
What else is a traditional business? Do you have to work where you
live? Your location could affect your lifestyle and it could be expensive
if you have to live in a city.
Another drawback with owning a business is that you have got to
have stock which can often become damaged and outdated. That stock
usually ties up significant amounts of money. People can have $50,000-
$70,000 in stock just sitting on the shelf not earning income. Theft can
be a big problem as well as fraud, insurance, maintenance and
countless other things.
What about resale value? Is the business very liquid? In other words,
if you paid $100,000 for a traditional business and you needed the
$100,000 back quickly, could you cash it in by Tuesday? Could you cash
it in within five-minutes? Could you cash it in within five years?
Your likelihood of getting the same as what you paid for the
business is often very small. Sometimes if you know how to grow
businesses you can make money out of them, but often you may
2
1 - What Are E-minis?
struggle to get your money back, so there is a lot at stake. Owning your
own business can involve a lot stress and a fair amount of risk.
Many people thrive on that and a proportion become wealthy that
way. With your job, you don't have all this money at stake, but you do
have your time at stake which is a challenge as well. With a job, you
still have to have a fixed location which means you have to be at work.
If you would like to own and run a business of your own with none
of the hassles we discussed above you may like to consider trading
E-minis as a full time business.
You could establish your own E-mini trading business for a fraction
of the cost of buying a ‘standard franchised business’, with a genuine
chance at obtaining a good return on your investment.
Trading E-minis is effectively a business opportunity with no staff,
no rent (you work from home using your computer) or a place of
business to maintain. You can work just 2 hours per day and have
professionals advise you on when to buy and sell and you can trade
from anywhere in the world.
Trading E-minis is a business with an overhead of approximately
$10 per trading day with no debtors and creditors.
Trading E-minis is a business with no more 70-hour working weeks
or working on weekends.
Why trade E-minis?

E-minis are cutting-edge products designed for the
active trader who wants to trade electronically
and who likes to have maximum control and
highest profit potential.
You can use E-mini stock index futures to:
• Actively trade stock indexes
• Hedge your portfolio or other investments
• Gain broad market exposure at relatively low cost
For a free DVD and access to a free webinar go to

3 www.21stcenturyeminis.com.au
What is an E-mini?
If you are a novice investor do not be put off by many of the words
used to explain E-minis in this book. All that is important is that you
grasp the concept of trading E-minis.
E-mini is a short abbreviation for Electronic Mini S&P 500.
An E-mini is a futures contract that can be traded electronically on
the Chicago Mercantile Exchange (CME) and is based on the S&P 500
index, as opposed to normal S&P futures contracts, which have a
point value of $250; the E-mini contract has a point value of $50.
A brief explanation of the S&P 500 index for readers who are
unused to the term.
The S&P 500 is a stock market index containing the stocks of 500
Large-Cap corporations, most of which are American. The index is the
most notable of the many indices owned and maintained by Standard
& Poor's. S&P 500 is used in reference not only to the index but also
to the 500 actual companies, the stocks of which are included in the
index.
The S&P 500 index forms part of the broader S&P 1500 and S&P
Global 1200 stock market indices.
All of the stocks in the index are those of large publicly held
companies and trade on the two largest US stock markets, the New
York Stock Exchange and NASDAQ. After the Dow Jones Industrial
Average, the S&P 500 is the most widely watched index of large-cap US
stocks. It is considered to be a bellwether for the US economy and is a
component of the Index of Leading Indicators.
Linear graph of the S&P 500 Index from 1950
4
Many index funds and exchange-traded funds track the performance

of the S&P 500 by holding the same stocks as the index, in the same
proportions, and thus attempting to match its performance (before
fees and expenses). Partly because of this, a company which has its
stock added to the list may see a boost in its stock price as the
managers of the mutual funds must purchase that company's stock in
order to match the funds' composition to that of the S&P 500 index.
In stock and mutual fund performance charts, the S&P 500 index is
often used as a baseline for comparison. The chart will show the S&P
500 index, with the performance of the target stock or fund overlaid.
The components of the S&P 500 are selected by committee. This is
similar to the Dow 30, but different from others such as the Russell
1000, which are strictly rules-based.
E-mini® S&P 500® futures provide investors with an innovative tool

for accessing and managing risks on stock market investments. Fully
electronic and one-fifth the size of a standard CME S&P 500® futures
contract, it closely tracks the price movements of the S&P 500® Index,
the premier benchmark of stock market performance. More than 1
million contracts trade on an average day, making E-minis one of the
most highly-traded futures contracts in the world and reinforcing
CME's (Chicago Mercantile Exchange) position as the world's leading
provider of stock-index futures.
E-Mini S&P, often abbreviated to ‘E-mini’ and designated by the
commodity ticker symbol ES, is a stock market index futures contract
traded on the Chicago Mercantile Exchange's Globex electronic trading
platform.
The notional value of one contract is US$50 times the value of the
S&P 500 stock index. It was introduced by the Chicago Mercantile
Exchange in 1998 after the value of the existing S&P contract (at the
time valued at $500 times the index, or over $500,000) became too
large for many small traders. The E-mini has quickly become the most
popular equity index futures contract in the world.
The original (‘big’) S&P contract was subsequently split 2:1,
bringing it to $250 times the index.
Hedge funds often prefer trading the E-mini over the big S&P since
the latter still uses the open-outcry pit trading method, with its
inherent delays, versus the all-electronic Globex system.

E-minis are bought and sold 500,000 What types of people are
times on a typical trading day. Many trading E-minis?
analysts believe E-minis future trading In Australia at the time of
is the fastest growing product going to press there were
available. more than 500 people
E-minis are growing and actively trading E-minis
becoming more important to both with interest in the market
growing exponentially. The
investors and the marketplace because number of active traders is
they allow small investors to access expected to expand to
what can be a lucrative income if thousands in the next year
they become successful at trading. or two as many investors
and share traders discover
An income of US$1,000 to US$5,000
that it is simple to profit
per week is a pittance compared to from trading E-minis.
what some E-mini traders can earn.
The E-minis market is
traded by many people,
including amateur and
Some benefits of E-minis professional traders as well
• E-minis are a fast, efficient way to as Pivot Traders, Gap
trade the benchmark S&P 500 Traders and Pitt Traders.
Trading E-minis offers
Index (and the underlying 500 people the chance to get
large-cap U.S. issues) with a single out of their comfort zone
contract. This means you do not and to do something new.
need a large amount of capital to It is interesting to look at
commence trading E-minis. the demographics of a
• E-minis provide a smaller contract well-attended recent E-mini
well suited for a broad range of seminar on the Gold Coast.
The vast majority attending
individual and institutional were casually attired in
customer needs. shorts and thongs. Around
• E-minis offer substantial liquidity 25 percent of those attend-
and tight bid/ask spreads. ing were female, a
significant number were
• E-minis are electronically traded already full-time share
on the CME Globex® platform, market traders and a large
offering speed, reliability, number were successful
anonymity and trading around the property investors. All of
these people were seriously
clock, around the world. assessing E-minis as a
• E-minis accommodate a variety of further alternate trading or
strategies such as hedging to investment opportunity.
6
protect against adverse price moves, spreading with other stock-

index futures and gaining broad market exposure. This can help to
minimise losses for small investors.
• The E-minis market is a level playing field offering open, fair and
transparent markets.
• E-minis offer potentially lower trading costs than trading a basket
of equities or Exchange-Traded Funds (ETFs).
The Dow Jones

In this book we will often refer to the Dow or Dow Jones. For readers
who are not familiar with these terms some definitions of the Dow
Jones are:
• A price-weighted average of 30 actively traded blue-chip stocks. It is
the oldest and most widely used of all stock market indicators.
• An indicator of stock market prices; based on the share values of
30 blue-chip stocks listed on the New York Stock Exchange; "the
Dow Jones Industrial Average is the most widely cited indicator of
how the stock market is doing"
Dow Jones Industrial Average monthly price from 1900

Advantages of Trading Mini S&P 500 Futures and Options

Trading Mini S&P 500 futures and options offers investors a number of
distinct advantages:
Exposure
Investors can have exposure to the U.S. stock market via the world's
leading stock index. Although there are many indexes, some very
popular, the S&P 500 has the most closely watched, actively traded and
liquid of all futures products based on a stock index.
Affordability
The enormous appeal of the standard S&P 500 futures has caused the
contract to grow beyond the reach of many investors. New Mini S&P
500 contracts allow investors to trade this benchmark index at a
fraction of the cost. Mini S&P 500 futures will require much less
margin than the standard S&P 500 futures.
Opportunity
These new contracts provide a variety of investment opportunities,
such as:
• increasing or hedging portfolio exposure
• spreading against other CME index products such as the S&P 500,
NASDAQ 100, Russell 2000 and/or S&P MidCap 400
• a cost-efficient way to benefit from rising or falling equity markets.
Integrity
Chicago Mercantile Exchange (CME) customers and members are
protected from default on futures and options contracts by the
Exchange's sophisticated risk management and surveillance
techniques. The CME Clearing House acts as the guarantor to each of
its clearing members, thus ensuring the integrity of all trades. The
CME system has proven to be outstandingly effective, even under the
most stressful market conditions.
The CME is The Index Exchange, with more than 95 percent market
share of all domestically traded stock index futures and options on
futures. Open interest in the CME's index complex totals in excess of
$93 billion, making it the world's most liquid trading environment for
stock index products.
8
What, exactly are Mini S&P 500 Futures?

• Mini S&P 500 futures are legally binding agreements to buy or sell
the cash value of the S&P 500 Index at a specific future date.
• The contracts are valued at 50 x the futures price.
• For example, if the Mini S&P 500 futures price is at 900.00, the
value of the contract is $45,000 ($50 x 900.00).
• The minimum price movement of the futures or options contracts is
called a ‘tick’.
• The tick value is .25 index points, or $12.50 per contract.
• This means that if the futures contract moves the minimum price
increment (one tick), say, from 1300.00 to 1300.25, a long (buying)
position would be credited $12.50; a short (selling) position would
be debited $12.50.
• All futures positions (and all short option positions) require
posting of a performance bond (or margin).
• Positions are marked-to-the-market daily.
• Additional deposits into the margin account may be required
beyond the initial amount if your position moves against you.
• Mini S&P 500 contracts are cash settled, just like the Standard S&P
500; there is no delivery of the individual stocks.
• Even better, Mini S&P 500 daily settlements and quarterly
expirations will use the exact same price as the S&P 500.
• The same daily settlement prices allow Mini contracts to benefit
from the liquidity of the S&P 500 futures.
• Like the S&P 500, which is settled using a Special Opening
Quotation (SOQ), all Mini S&P 500 positions are settled in cash to
the same Special Opening Quotation on the third Friday of the
quarterly contract month.
What is the Special Opening Quotation, or SOQ?

The final settlement price is an SOQ of the S&P 500 Index based on the
opening prices of the component stocks in the Index, or on the last
sale price of a stock that does not open for trading on the regularly
scheduled day of final settlement.
Additional deposits into the margin account may be required
beyond the initial amount if your position moves against you.
Because E-minis are futures, they offer some unique and

very important additional features:
1. The capital requirement to trade is low relative to stock margin
requirements (minimum $1,000)
2. Returns can be quite substantial
3. You have the opportunity for profitable trading strategies regardless
of market direction or volatility
You can trade E-mini stock contracts as a day trader, simply with an
eye to making a profit, but you can also use E-minis as hedging tools
or to get a particular kind of market exposure.
For example, you may decide to sell these E-mini contracts if you
think the market will be bearish, but you don't want to disrupt your
portfolio by selling off a large number of stocks.
Or, you may buy them if you think the market will be bullish in the
near future, but you don't want to purchase additional shares of a
particular stock at that time.
Equities investors like the great ‘tradability’ of E-

minis. Besides having very tight bid/offer spreads,
they are:
• Highly liquid with high leverage
• No uptick rule, easy to short
• 100 percent electronic - no trading pits and brokers
• Sized for the individual investor
• Fast moving, exciting and stimulating to trade
• Backed by a strong financial safeguard system
• Scandal and corruption free
• Monitoring only one index instead of dozens of stocks
• Less time consuming
10
Trading the E-mini S&P 500 - an example

Let's say you are an individual investor who is bullish on the stock
market. You have been following daily activity in financial newspapers
and on financial news stations. You
want to become involved in the stock
market; however, you have only
around $10,000 to invest. The E-mini can be traded
You see every day in the at short intervals - it can
newspaper that the market, as tracked go up or down 1 point in
by the S&P 500, is moving and you 1-minute
want to be a part of it. You have
traded stocks before, but you have An average trade lasts 10-
15 minutes
decided that being a stock picker is
too difficult and time consuming. E-minis are a simple
You also realise that you would process - the market can
have to limit your investment to just only go up or down - a
one or two individual stocks. Or, you 50/50 probability
could buy a mutual fund; however, With training you can
that only allows you to value your improve your chances of
assets based on the closing price each success
day, thus losing the trading
opportunity within the day. In order to be able to
You might instead consider going properly understand these
long on Mini S&P 500 futures charts and how to use
contracts to profit from your bullish them to trade E-minis we
recommend that you
outlook. Up to this point, S&P 500 attend an 21st Century
futures have been out of your reach, Eminis training seminar
with the minimum requirement to put that are conducted on a
up far exceeding your total planned regular basis all over
investment. Australia, New Zealand
Here is your opportunity. E-mini and other parts of the
S&P 500 contracts allow you to put world.
your investment dollars to work by
purchasing E-mini S&P 500 futures.
Now you can participate in the leading stock index futures market
at a fraction of the cost. This has made it possible for small investors
to commence trading E-minis for as little as a $5,000 with the
opportunity to generate profits of US$1,000 - US$5,000 per week.
The electronically traded CBOT (The Chicago Board of Trade)

mini-sized Dow
The Chicago Board of Trade is a global commodity futures exchange
trading treasury bonds, corn, soybean, wheat, mini-sized Dow, gold,
silver and more. For stock index futures traders, CBOT Mini-Sized Dow
Futures offer:
FEATURES BENEFITS
BENCHMARK Capture the performance of the Dow - the
APPEAL most widely recognised stock index in the
world.
TRADING Fully electronic with a level playing field.
PLATFORM Trade the Dow, anywhere, almost anytime
CONTRACT Comparable to other mini-sized stock index
VALUE futures. $5 x current price of CBOT mini-
sized Dow futures. For example, if CBOT
mini-sized Dow futures are currently 8000,
the value of one contract is $40,000 - ($5 x
8000).
CBOT MARGINS Initial margin is currently $2700, or
approximately 6.75% of contract value.
The CBOT mini-sized Dow offers more leverage
by requiring less margin per contract than other
stock index futures.
LIQUIDITY Professional traders are making continuous
two-sided markets in CBOT mini-sized Dow
futures. As a result, liquidity is deep and
constant.
DOLLAR Recent average daily range over 4 months:
VOLATILITY $1080 or 216 points. Relative to comparable
stock index futures, CBOT mini-sized Dow
futures have lower exchange margin.
requirements for similar intraday dollar volatility.
Consequently, CBOT mini-sized Dow futures
offer the most value per dollar of any mini-sized
stock index future.
EASE OF The DJIA is a price-weighted average of 30
TRACKING of the largest, most liquid US stocks. Dow
moves can be easily anticipated by
following price moves in these widely-
quoted stocks.
DOW QUOTES Free real-time depth of market quotes
available at www.cbot.com/dow
12
Some Facts About the S&P 500 Index

The S&P 500 Index represents about 70 percent of total domestic U.S.
equity market capitalisation. S&P identifies important industry sectors
within the U.S. equity market, approximates their relative importance
in terms of market capitalisation and then allocates a representative
sample of stocks within each sector of the S&P 500.
The Index is capitalisation weighted (shares outstanding times
stock price); each company's influence on Index performance is
directly proportional to its market value. The daily Index values
reported in the media are exclusive of dividend income, i.e. they
reflect only price action of the underlying component stocks.
Logarithmic graph of the S&P 500 Index from 1950 to January 2008
The S&P 500 index was created in 1957, but it has been extrapolated
back in time. The first S&P index was introduced in 1923. Prior to
1957, the primary S&P stock market index consisted of 90 companies,
known as the ‘S&P 90’, and was published on a daily basis. A broader
index of 423 companies was also published weekly. On March 4, 1957,
a broad, real-time stock market index, the S&P 500 was introduced.
This introduction was made possible by advancements in the computer
industry which allowed the index to be calculated and disseminated in
real time.
The S&P 500 is used widely as an indicator of the broader market,
as it includes both "growth" stocks (which inflated and then deflated
in the dot-com bubble and bust) and generally less volatile "value"
stocks; it also includes stocks from both the NASDAQ stock market and
the NYSE. The index, near the height of the bubble, reached an all-
time intraday high of 1,552.87 in trading on March 24, 2000, and then
lost approximately 50% of its value in a two-year bear market, spiking
below 800 points in July 2002 and reaching a low of 768.63 intraday on
October 10, 2002.
Since then, the US stock markets gradually recovered, but the S&P
500 lagged the popular Dow Jones Industrial Average and total-market
Wilshire 5000 indices by remaining below its highs of 2000 for a longer
period. On May 30, 2007, the S&P 500
closed at 1,530.23 to set its first all-
time closing high in more than seven On May 30, 2007, the S&P
years. On July 13, 2007, the index 500 closed at 1,530.23 to
followed a nearly thirty-point gain set its first all-time
the previous day by setting a new closing high in more than
seven years.
intra-day record of 1,555.10 points,
its first of the 21st century. On July 13, 2007, the
index followed a nearly
The components of the S&P 500 are thirty-point gain the
selected by committee. This is previous day by setting a
similar to the Dow 30, but different new intra-day record of
1,555.10 points, its first of
from others such as the Russell 1000,
the 21st century.
which are strictly rules-based.
The index does include a handful
(13 as of July 6, 2007) of non-U.S. companies. This group includes
both formerly American companies that are now incorporated outside
of the United States, but which were grandfathered and allowed to
remain in the S&P 500 after their expatriation, and companies that
have never been incorporated in the United States. Notably, after the
merger of Daimler-Benz and Chrysler, the S&P did not include the
newly created German aktiengesellschaft (company) in the index.
The committee selects the companies in the S&P 500 so they are
representative of various industries in the United States economy. In
addition, companies that do not trade publicly (such as those that are
privately or mutually held) and stocks that do not have sufficient
liquidity are not in the index.
A notable example of an illiquid stock not in the index is Warren
Buffett’s Berkshire Hathaway, which as of April 2006 had a market
capitalisation larger than all but 12 of the members of the S&P 500, but
which also had a stock price (in the case of its class A shares) greater
than $100,000, making it very difficult to trade.
14
By contrast, the Fortune 500 attempts to list the 500 largest public
companies in the United States by gross revenue, regardless of
whether their stocks trade or their liquidity, without adjustment for
industry representation and excluding companies incorporated
outside the United States.
The S&P 500 Index was market-value weighted; that is, movements
in price of companies whose total market valuation (share price times
the number of outstanding shares) is larger will have a greater effect
on the index than companies whose market valuation is smaller.
The index has since been converted to float weighted; that is, only
shares which Standard & Poors determines are available for public
trading (‘float’) are counted. The transition was made in two tranches,
the first in March 2005 and the second in September 2005.
E-mini Case Study

Marcus was able to sell
How Marcus made $9,000 in a
the contracts at more
night with a $4,000 outlay than 18 points. That's
One morning with the market having 18 times $50 per point
sold off for three straight days, a times 10 contracts, or
friend of ours, Marcus, decided to bet $9,000.
the market would rally. Rather than
buy the cash index (i.e. through funds or ETFs that track the SP 500),
Marcus decided to trade the index futures, where he has far more
margin power and where nearly round-the-clock trading enables him
to buy before the open of the cash market. His early morning price was
1041.50, or, as it turned out, 5 points below the SP 500's opening
price.
Marcus bought the E-mini SP contract rather than the regular SP
index contract. The E-mini is 1/5 the contract size and requires far less
money down on margin. A single regular SP contract, which is valued
at $250 per point (or about $260,000 on a 1041.50 price), requires
about $20,000 in margin. An E-mini contract, valued at $50 per point,
requires about $4,000 - and that is if you are holding overnight. If you
are day-trading, as Marcus was, you can buy up to 49 E-mini contracts
on just $500 margin using Global Futures Exchange.
Marcus bought specific date E-mini SP contracts, and, at the same
time, entered an intraday protective stop on his E-mini position to
limit his loss in case his analysis and entry proved ill-timed or faulty.
By evening, with the December E-mini SP up to over 1059.75 (.25
points higher than the cash index's close), Marcus was able to sell the
contracts at more than 18 points. That's 18 times $50 per point times
10 contracts, or $9,000.
Background on the E-mini Contract

The above case study example is not aimed at enticing you to run out
and start blindly trading E-minis. Rather, it is meant to provide a
simple illustration of how E-minis are traded and why they have
become such popular trading instruments.
Since its introduction by the Chicago Mercantile Exchange in 1997,
the E-mini equity index product suite today includes the E-mini SP
500, E-mini NASDAQ-100 and the E-mini Russell 2000.
Based on their trading volume, these smaller-sized products are
the fastest growing in CME history at an average of 130 percent over
the past three years.
One trader uses the E-minis (preferring to focus on the S&P and
NASDAQ rather than the Russell) both as a trading instrument and a
gauge for determining market direction. As a trading instrument, the
example of Marcus's trading experience illustrates how E-minis can be
profitable. As a market gauge, the sheer volume of trading makes it an
ideal tool for studying how traders are viewing the broader indices.
More than 139 million E-mini SP 500 contracts were traded in the
first 10 months of a recent year, compared to just under 17 million of
the big SP 500 contracts. On the NASDAQ side, the ratio was 56.9
million for the mini versus 3.7 million for the large contract.
Given the volume, along with the virtually round-the-clock trading,
E-mini futures can impact and anticipate the movement of the cash
equity indices. Thus, people investing in stocks or funds that track the
SP 500 or NASDAQ 100 may do well to follow the E-minis.
E-minis trade on the CME's GLOBEX electronic trading platform,
which is accessible to traders either directly through a CME-certified
front-end system or through a futures broker online or by phone. The
symbols vary by quote system, but on the CME's system they are ES for
the E-mini SP and NQ for E-mini NASDAQ - plus a letter for the
expiration month (i.e., NQZ for December).
The minimum price movement of the SP E-mini contract, called a
16
tick, is .25 index points, or $12.50 per contract. If the futures contract
moves the minimum price increment (one tick), say, from 1040 to
1040.25, a long position would be credited $12.50 and a short
position would be debited $12.50. Brokerage accounts are adjusted
nightly to reflect unrealised gains and losses and if accounts drop
below the minimum margin requirement, brokers can issue a ‘margin
call’, closing out positions and requiring the deposit of additional
money to continue trading.
Hence the difference in margin requirements between a day-trading
position and a position held overnight, as we saw in the example of
Marcus on pages 15 and 16.
Overnight trades carry far more risk. Margin levels in futures
trading are set by the exchanges (the CME in the case of the E-mini),
which adjust the levels to encourage or discourage trading depending
on level of activity and volatility.
However, the clearing firms have the option to increase marginal
requirements beyond the level set by the exchanges, depending on
how much, or how little, risk they want to assume for themselves and
their customers. To help traders minimise the risks - and improve on
the rewards - many 'technicians' spend a lot of time studying the
technical charts of the E-minis.
These people look at the price patterns from different timeframes
(for example, 15-minute charts for intraday analysis, hourly charts for
near-term 1-2 day analysis, and daily charts for 1-2 weeks); they
identify price support and resistance levels and where the prices are at
relative to these levels as well as to moving averages; and they assess
all that in relation to the indicators such as volume intensity, relative
strength and stochastics.
These same 'technicians' look for what they consider to be a high-
probability directional outcome to a particular stock index trade as
well as multiple target windows that enable traders to profit from
entering the market.
They are more interested in these target windows, or zones, than
specific prices as they allow them to be active - if not interactive -
participants in the process of experiencing a move from point ‘a’ to
point ‘b’. This gives them the opportunity to exit or enter a position
in a range rather than at a specified price.

Summary
The markets give a final verdict every trading day at the close. This
verdict will not go in your favour if you enter the trading battle
unprepared. Skill and success in the markets are acquired through
hard work, education, patience and emotional discipline.
Day trading E-minis takes a combination of discipline, caution,
aggressiveness, fortitude and willingness to take small losses quickly.
We doubt that anyone is born with all these traits. Instead, the
majority of traders day trading E-minis start this business with the
wrong instincts.
They are naturally willing to give up control of a losing position.
When the market heads towards a rookie's stops, they wait, hoping
things will turn around. When they don't, there is often a temptation
to loosen the stop and increase the potential for loss. This makes no
logical sense, but it is human nature. When day trading E-minis you
have to learn to take small losses quickly to succeed.
For a free DVD

and access to a free webinar go to
18
2.
TRADING E-MINIS
“The creation of a thousand forests
is one single acorn.”
Emerson
An Introduction to Trading E-minis

Trading E-minis is an attractive investment option for people to use to
create financial independence in the 21st Century.
This introduction is intended to demonstrate the advantages of
trading E-minis. Before attempting to trade E-minis we recommend
that you attend a 21st Century Eminis training seminar that are
conducted on a regular basis all over Australia, New Zealand and
other parts of the world.
For dates and locations see
Trading E-minis has many advantages over other forms of

trading and share investment including:
• E-minis offer volatility and liquidity. A market needs both of these
factors to be present in order to create market opportunities and
trades.
• There are no gaps in the E-minis market and the market offers risk
protection.
• There are no E-mini market makers.
• Trading E-minis offers low commissions - only US$5.00 round trip
commissions.
• The E-minis market only needs to move 1 point to make a 5%
return.
• The E-minis market offers excellent profit potential and 70/1
leverage.
• The E-minis market offers a genuine chance to make a 5% to 10%
return on investment daily.
• The E-minis market is very predictable.
• When trading E-minis there is just one simple choice and you only
need to be better than 50/50 to make a profit.
20
2 - Trading E-minis
Trading E-minis
In the past nine years thousands of traders world-wide have enjoyed
the popular, award-winning E-mini training course conducted by 21st
Century Eminis. 21st Century Eminis offer their clients the truly unique
opportunity of a web based education program for trading the Index
Futures market and then supporting this education with a live trading
room operating from bell to bell.
Members can log into the Live Trading Room website and watch as
the professional trader marks buy and sell signals as they develop on
the live chart. Members are able to observe the ongoing success of
these signals with 100 percent transparency.
To trade E-minis we use three basic indicators.

1. MACD (Moving Average Convergence Divergence). Briefly this
technique takes the difference between two exponential moving
averages (EMA's) with different periods. This produces what is
generally referred to as an oscillator. An oscillator is so named
because the resulting curve swings back and forth across the zero
line. This series is plotted as a solid line. Then a 9-day EMA of the
difference is plotted as a dotted line. The 9-day EMA trails the
primary series by just a bit, and trades are signalled whenever the
solid line crosses the dotted line.
2. Stochastic. In the mathematics of probability, a stochastic process
or random process is a process that can be described by a
probability distribution. The two most common types of stochastic
processes are the time series, which has a time interval domain,
and the random field, which has a domain over a region of space.
3. Price gaps and variations. Market gaps are common during times of
volatility.
E-minis traders use a range of charts to make informed

decisions
In order to be able to properly understand these charts and how to
use them to trade E-minis we recommend that you attend an 21st
Century Eminis training seminar that are conducted on a regular basis
all over Australia, New Zealand and other parts of the world.

Candle sticks
A candle stick is a price chart that displays the

high, low, open, and close for a security
each day over a specified period of time.
The candle sticks paint us a picture
Understanding candle sticks
the highest price for the day
open or closing price
body is black (or red) if stock closed lower.

body is white or green if it closed higher
open or closing price
the lowest price for the day
22
2 - Trading E-minis
These charts shows buy and sell signals - matching W's and M's
MACD and Stochastic
This charts shows MACD and Stochastic trends

Double tops
This charts shows 'exact double tops'
Technical double bottoms
This charts shows 'technical double bottoms'
24
2 - Trading E-minis
Lower lows
This charts shows ''lower lows'
Because E-minis are futures, they offer some unique

additional features:
• The capital requirement to trade is low relative to stock margin
requirements (minimum $1,000)
• Returns can be quite substantial - returns of US$1,000 to $5,000 per
week and even higher are common
• You have the opportunity for profitable trading strategies
regardless of market direction or volatility
• You can trade E-mini stock contracts as a day trader, simply with an
eye to making a profit.
• But you can also use them as hedging tools or to get a particular
kind of market exposure.
• For example, you may decide to sell these contracts if you think the
market will be bearish, but you don't want to disrupt your portfolio
by selling off a large number of stocks.
• Or, you may buy them if you think the market will be bullish in the
near future, but you don't want to purchase additional shares of a
particular stock at that time.
In the past nine years thousands of traders world-wide have enjoyed

the popular, award-winning E-mini training course conducted by 21st
Century Eminis.
21st Century Eminis offer their clients the truly unique opportunity
of a web based education program for trading the Index Futures
market and then supporting this education with a live trading room
operating from bell to bell.
Members can log into the Live Trading Room website and watch as
the professional trader marks buy and sell signals as they develop on
the live chart. Members are able to observe the ongoing success of
these signals with 100 percent transparency.
21st Century Eminis advice on how to profit from learning,

understanding and trading the E-mini index.
• E-minis are a smaller version of large share index contracts
• Large share index contracts carry larger risks
• A S&P big contract costs $350,000 and a 1-point movement
represents $250 = 7.5%
• For an E-mini contract $1,000 and 1-point = $50 = 7.5%
• Because of high leverage if the index goes up 1-point you make $50
on a $1,000 contract - a 5% return
• If you go short and the Index goes down 1-point you make a 5%
return
• The E-mini can be traded at short intervals - it can go up or down 1
point in 1-minute
• An average trade lasts 10-15 minutes
• E-minis are a simple process - the market can only go up or down -
a 50/50 probability
• With training you can improve your chances of success
• Commissions are only $5.00 per trade - $2.50 in and $2.50 out
• There is no market maker
• The E-mini market has $40 billion dollars per day liquidity
• The E-mini market has no gaps
26
2 - Trading E-minis
• There is a point range of 12-20 points per day

• 2 points in E-mini market = 10% ROI in minutes
• The E-mini market has had exponential growth in 9 years - zero to
$400 billion
• E-mini trading is transparent - you can watch trading live
• Our three 21st Century Eminis signals (T1, T2 and T3) will come up
on an average of three times per session
• Using three signals (T1, T2 and T3) there is an 85% probability of a
5% return
• Experienced traders will be able to
recognise and understand these No other financial
signals which occur on average three product has gone from
zero (when the CBOT
times in three hours.
introduced E-minis) to
• Experienced traders recognise and $40 billion turnover in
understand that it usually takes 8-15 9 years
minutes for a trading pattern to form Daily trading of E-minis
• Some people worry that a one-minute exceeds US$40 billion.
trading window is insufficient time to
make a trading decision - not so for
experienced traders
• Share Index trading has always been largely the preserve of fund
managers by using futures share contracts as hedge instruments.
Fund managers hedge their risks by taking an average position
• A fund manager might have a $400,000 position in the market at a
cost of $30,000
• E-minis offer simplicity of trades
• E-minis trade as a one single item
• How does the market rate E-minis? E-minis are widely accepted as
the most successful financial product ever launched
• No other financial product has gone from zero (when the CBOT
introduced E-minis) to $40 billion turnover in 9 years
• The large fund manager market is diminishing
• With E-minis Index trading is no longer just for large traders
• Daily trading of E-minis exceeds US$40 billion.
Exit strategies
Traders should set a stop/loss. Remember that as a trader if you go
long with 10 contracts, there has to someone there to buy the contracts
that you want to sell.
E-minis v. Stocks
Items for consideration and comparison
• For E-minis - no market • For stocks - how will I
manipulation manage my portfolio?
• For E-minis - no portfolio • For stocks - what
to manage research reports will I
need I need to study?
• For E-minis - one simple
choice • For stocks - how reliable
are the accounting
• For E-minis - no skill - reports?
your probability of
success is 50/50, but by • When trading stocks
using 'signals' the chance investors have to rely on
of success in some cases financial information which
is increased to 70 percent may be misleading
and more.
• People may be able to
• For E-minis - no reports manipulate the market
to read because we are • Research may be very
trading the top 500 stocks difficult
• Many stocks collapse -
e.g. HIH Insurance,
Pasminco and One.Tel
• The stock market is
subject to major
corrections over a
extended periods of time.
28
2 - Trading E-minis
How do E-minis compare to CFD's (Contracts for Differences)?

• CFD’s are influenced by market makers
• CFD Trading carries a high level of risk, therefore you should only
speculate with money you can afford to lose
• You will be charged interest
• CFD prices can be very volatile and the resulting losses may require
further payments to be made. It is not suitable for all customers and
requires that you fully understand the risks involved, seeking
independent advice if necessary.
• CFD Trading is a way of trading shares or markets (e.g. FTSE 100
Index, Gold, FX). One of the key differences to share dealing is that
you can potentially benefit from falling markets or share prices (as
well as rising ones)
How do E-minis compare to Options?

• Options present all the challenges of CFD's plus you can take a call
or put
• You may be: in the money / at the money / out of the money
• You have to decide if you will be a taker or a writer?
• You have to decide if you will go naked or cover?
• Options are affected by time decay
E-minis, ease of use versus options:

Rocket Science Factor - Options traders can call market correctly and
still lose money because they must juggle four items:
1. Underlying price 2. Strike price
3. Volatility 4. Time decay
Futures traders care about only two things:

1. An advancing market, or 2. A declining market
Futures have more constant order flow and are usually much more
friendly regarding bid/offer spreads.
Trading hours
The US market trades from 1.00am - 8.00am Australian Eastern winter
time, with a one hour break in the middle.
How can you be right more times than wrong?

The key is to become an educated E-mini trader.
• You need education to understand basic buy and sell signals. We
provide education to teach people how to understand basic buy
and sell signals on E-mini charts.
• We provide education to enable people to trade using a live one-
minute-chart.
• You need access, preferably to a live trading room. We have a live
trading room where you watch your trades and listen to our trader.
• If you require more education in E-mini trading than this book
covers, see the rear of this book for further information.
E-mini market profit potential

• The E-mini market has a liquidity of US$40 billion
per day
• No gaps = Risk Management
• Markets need some volatility to make markets -
the E-mini market volatility is 12 to 20 points per
day
• A 1 point gain = 5%
• A 2 point gain = 10%
• Investors can obtain returns of 5% - 10% in
10 minutes
• The market has 100 percent transparency
• There are no market makers - just point-spread
• Commission is just US$5 per round trip
• Results are published daily
30
2 - Trading E-minis
How do our 21st Century Eminis signals perform?

Some real trading examples
Following are monthly results from just two trade signals (T1 and T2)
we announce every day to our E-mini traders.
Month T1 T2
May 19 / 95% 26.5 / 133%
June 17 / 85% 18 / 90%
July 13 / 65% 16 / 80%
Aug 14.5 / 72.5% 16 / 80%
These results are based on assuming that a trade is filled at the closing
price of the confirmation candle and profit is only assumed if the
price passes through the profit target. Stop loss is set at 1.5 points
with MIT. (MIT stands for ‘Market If Touched’ meaning that upon
reaching this value a ‘Market Order’ will be automatically placed).
Signals are measured between 9.30am till noon and 1.00-3.30pm.
How do I make money trading E-minis?

• One E-mini index contract costs US$1,000
• When the market moves 1 point this = US$12.50
• A one point gain = US$50.00 = 5% ROI
• A two point gain = US$100.00 = 10% ROI
• With market volatility the market may gain 2 points in a time frame
of 10-15 minutes
How do we identify signals?

We use three basic indicators:
1. Price
2. MACD (Moving Average Convergence/Divergence)
3. Stochastic (see Glossary)

Trading Signals - The Power of T3

• T3 signals uses a 3-minute chart
• T3 trades usually occur during the first 2 hours of training
• T3 trading in July/August in a recent year showed a gain of 24
points
• T3 uses same entry definition as T1 and T2 results
• Our three 21st Century Eminis signals (T1, T2 and T3) will come up
on an average of three times per session
• Using three signals (T1, T2 and T3) there is an 85% probability of a
5% return
What is the cost of trading E-minis?

The biggest cost to you is your initial education. Is this expensive?
Compared to buying a lawn mowing franchise for instance, this
represents excellent value.
You can work for just a few hours a day and spend more time with
your family. E-minis represent the opportunity for financial freedom.
As a first step, watch the free E-mini DVD available to all readers of
this book.
For more details
Money, Money, Money

In life too many people look for instant gratification. You will not get
instant gratification by trading E-minis.
Many traders focus too much on profit when trading E-minis. Good
E-minis traders will forget about the profit and concentrate on
winning trends, while amateur traders draw impulsive conclusions
from small, limited experiences.
E-mini trading tip

Practice before you commit.
And when you do commit start with just one trade.
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2 - Trading E-minis
When to enter the E-mini market

• Identify where the Gap and the Pivots are on your charts
• Wait for one of these points to be hit by price
• Now wait for a buy or sell signal (confirmation candle) to confirm
no more than 1 point away from the Pivot or Gap
• For a buy signal, the price must confirm above the P.P. (Previous
Price)
• For a sell signal, price must confirm below the P.P.
• Look to see if the signal is choppy
• Enter the trade with a limit order at the closing price of the
confirmation candle
• If you do not get filled, do not chase the trade.
When to exit the E-mini market

• With a 'bracket' of a 1.5 profit target and a 1.5 stop stop-loss, let the
trade develop and automatically exit you.
• A trailing out or a trailing stop can be utilised with this strategy,
however be aware of other areas of support and resistance in the
market such as other Pivots.
When not to enter an E-mini trade

Do not enter a trade under adverse conditions. Do not for example:
• Take the trade when other areas of support or resistance, such as
highs, lows and gaps can threaten the trade.
• Take the trade in congested conditions.
• Trade around pending news.
• Trade after 3.30pm New York time.

Trading E-minis - some frequently asked questions

What is the most I can lose on any given trade?
If you use a 1.5-point stop on all your trades as we recommend the
most you will lose on any trade is 7.5% of the investment you made on
the trade plus commission to the broker.
What start up capital will I need?

We recommend that each trader starts off with a minimum of US$3,000
in his or her trading account.
Will I be trading in Australian (AUD) or United States (USD) dollars?

You will be trading in USD, however if you open your account with a
recommended broker you will deposit AUD and trade in and out of
the account in USD at the exchange rate of the day. At the end of each
trading day you will receive a statement with your trades and account
balance.
How long does the training take and how long till I trade real
money?
That will depend on how long you take to go through each step of
our training. However it is our goal to have all our students up and
trading real money after approximately 3 months. During this time you
will complete a minimum of 15 profitable days out of 20 using a real
simulation account trading the live market.
How many hours per day do I need to trade?

We recommend you only trade 2 to 3 hours per day. This time frame
each day will give you multiple trading opportunities for a 5% to 10%
return per trade.
Do I need a special computer system to trade the E-minis?

You require a PC with Internet Access (High Speed Connection
recommended) - Windows 98 Second Edition or newer
Can I trade my super fund and pay for the course using it?
Yes you can and we can put you in touch with accounting services that
can assist you in setting this up.
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2 - Trading E-minis
E-mini Money Management

It is recommended that as a potential trader you complete 15
successful paper trades over 20 trading days before committing real
money and that you commence with one or two contracts and build
your account slowly.
The Road to Riches

What it takes to be a consistent winning E-mini trader
As a potential professional trader you should crave, consistent
winning ways over weeks and months, trades that offer a high degree
of success, trades that offer a high degree of low stress. This should be
coupled with patience and discipline while avoiding fear and greed.
There are signals that are successful 80 percent of the time - they
are right in front of you, so it is up to you to capitalise on those
signals.
Can I trade E-minis without day-trading them?

At 21st Century Eminis we are often asked questions similar to this
one. Since E-Minis are similar to options on futures, isn't it possible to
trade them on an out-month instead of waiting by the computer for a
two-tick move? For instance, if I think NASDAQ is going to be 1,200 by
the middle of November, can't I use November or December
expirations and buy them now while they are relatively cheap?
Yes, they are just mini futures contracts (they are not options on
futures). E-mini's trade just like the full size contracts, except the
dollar value is smaller and so are the margins. Everything you do with
a futures contract you can do with a mini contract. In the case of E-
minis you will just make or lose less money than if you had lower
margin requirements.
E-mini trading - risk and reward

In order to make a profit trading E-minis traders will need to take
some risks. There is no such thing as a holy grail when trading E-
minis - it does not exist.
E-mini traders need to be conscious and aware of how much risk
they are prepared to take. Choppy trades with no support will reduce
the chance of success to 50/50.
Regular buying or selling with support will increase the chance of

success to 60/40.
When you trade E-minis (and even when you practice trading) ask
yourself this basic question - what is the probability of success? Is it 50/
50, 60/ 40, 80/ 20?
When you simulate a trade, bear in mind that you are doing it
without emotion. You need to be able to trade calmly and creatively.
When you commence trading with real money, fear, greed and
emotion come into play and there is a temptation to take low
profitability trades because humans are greedy by nature.
When trading E-minis you can profit by being patient. Practice
patience and discipline. It is vital to healthy and successful trading.
Some simple advice for trading E-minis

• Remember, the market does not care about you.
• The market has no emotion and does not care
whether you win or lose.
• You must take responsibility for your trades,
whether you win or lose.
• The more knowledge you have of the E-mini market
does not necessarily ensure success.
• Some of the worlds' leading CEO's, accountants
and analysts are the biggest losers. In many cases
their knowledge of trades talks them out of trades.
• Trading E-minis is a simple game of probabilities.
• Without any skill you have a 50 / 50 chance of
success.
• If you are losing money, you are sabotaging 50/50
odds.
• All great traders have suffered losses at some time.
• Do not be concerned about just one single trade.
• By practising paper trades, you can prove to
yourself that success is possible.
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2 - Trading E-minis
E-minis trading advice from a successful trader

Andrew Barnett is a successful and regular trader in the E-minis
market and is PS146 qualified and licensed according to ASICs
requirements. Based on his own experience he offers these E-mini
trading suggestions:
• To succeed you need patience and diligence.
• You need to develop good quality trading habits.
• As a trader you should set goals and aim to earn money.
• The difference between professional traders and amateur traders
as well as success and failure can be paper-thin.
• As a new and fresh trader you come to the E-minis market without
any baggage.
• When you trade, trade to have a good time and enjoy yourself
without focusing entirely on the dollar angle.
• It is possible to have more winning trades than losing trades and
to still lose money.
• To successfully trade E-minis you need good money management
skills, a methodology and the right mindset.
• Consistent, professional traders appear to trade with ease and are
patient and disciplined - they are waiters.
• All markets, including E-minis, are driven by fear, greed and
emotion.
• Markets usually go up by the stairs and can go down by the
elevator shaft. Trading any market, including E-minis, is 100
percent psychological.
• When trading E-minis, you are actually buying a futures contract
for US$1,000.
• When trading, buying or selling = support or resistance.
• Trading markets lack certainty but offer probability.
• Bear markets present opportunities for E-minis traders.
• By trading E-minis, traders can avoid catastrophic losses that may
be associated with other markets.
• You need to place trades in areas where other traders will be
attracted and step in and trade.

Your Trading Plan

Developing a Trading Plan, A trading plan can provide you with the
framework that you need to succeed in your E-mini trading.
Treat the business of E-mini trading as seriously as if you were
managing a major business. Define your personal level of aggression,
estimate the returns for different strategies and be realistic about your
own capabilities. Consider every conceivable occurrence in advance.
Money is made as a by-product of following a sound trading plan,
and adhering to the principles of money management. If you end up
losing a significant proportion of your trading capital due to greed
and ignorance, you can no longer trade and you are out of the game.
What to include in your Trading Plan

Your plan should cover some basic issues such as your trading goals
and objectives, which accounting structure from which to trade and
how you will handle your positions when you go on holidays. A
trading plan must also cover 3 essential areas:
1. Entry 2. Exit 3. Position Sizing
Refine your processes for analysing signals and do not let your
emotions dictate your trading habits. You need to define your signal
in words so that another trader unfamiliar with your technique can
duplicate your strategy. If it is not duplicatable, it is not a system.
Exit Plan
Before you place your order, you must decide on where you will exit.
Many traders advocate the use a stop loss to capture your profits and
avoid large losses.
Trading Plan tips

• Commit to a clear, concise and disciplined trading plan.
• Ascertain what risk you are prepared to take - you must take this
risk each time it presents. Having decided your risk level, you can
then decide which trades you will take.
• Keep your trading simple in your simulation and then adopt the
same pattern in your real trading.
• When trading there are four key questions for you to answer:
38
2 - Trading E-minis
1. Is the market in a trend?

2. Do I have correct signal information?
3. What support do I have for my trade?
4. Is there any news to be released that may impact the market?
• Commit yourself to meeting your trading plan for a period of at
least 6 months and to taking high profitability trades that meet your
trading plan. Resist the temptation to take low probability trades.
Accept that you will have some losses however always work at
having more winning trades.
• When you trade, trade as if you are running your trading as your
principal business activity (which for some traders it will be).
• Be passionate about your E-mini trading. Use energy. Have fun.
• If you have a losing trade do not attempt to get even with the
market. Analyse if you made a mistake. In your initial trading it is
inevitable that there will be mistakes.
• If you have 3 or 4 consecutive losing days, stop trading and seek
some advice.
• Remember that signals don't lose - people do!
Mark Douglas
Mark Douglas is a trader, personal trading coach and industry
consultant and has written a book, Trading in the Zone: Master the
Market with Confidence, Discipline and a Winning Attitude.
Douglas focuses on the psychology of successful traders and
instead of offering specific strategies, he offers the following general
advice to traders and potential traders:
“The first step on the road is to understand and completely
accept the psychological realities of trading.”
According to Douglas the psychological realities of trading may be
too abstract for some, but given the risks of trading experienced
investors should be willing to engage in self-reflection.
Maximising the trader's state of mind is the key to successful results
says Douglas. “Conflicts, contradictions and paradoxes in thinking can
spell disaster for even a highly motivated, astute and well-grounded
trader. ‘Thinking strategy’ will profoundly influence a trader's success
rate.”
Douglas views the trading zone as an outgrowth of trading

discipline and a positive mindset. Once the trader lapses into patterns
of fear, greed, and frustration, the zone is lost and instincts born of
long hours of observing market patterns cannot emerge. For the
trader, turning off the mind is a crucial element in success Douglas
wrote. Douglas claims the true culprit for lack of consistency when it
comes to stock picking is a lack of focus and self-confidence.
Day Trading E-minis

US based trader Mike Reed offers this interesting advice in regard to
trading E-minis.
“Day trading E-minis takes a combination of discipline, caution,
aggressiveness, fortitude, and willingness to take small losses quickly”,
writes one experienced trader. He continues, “I doubt that anyone is
born with all these traits. Instead, the majority of traders day trading
E-minis start this business with the wrong instincts.
“They are naturally willing to give up control of a losing position.
When the market heads towards a rookie’s stops, they wait, hoping
things will turn around. When they don’t, there’s often a temptation
to loosen the stop and increase the potential for loss. This makes no
logical sense, but it is human nature. When day trading the E-minis
you have to learn to take small losses quickly to succeed.
“We naturally get excited when the market starts making a big
move. The new trader feels anxious about being ‘left behind’, and
chases the market, usually getting on board near the end of the trend
or just before the next pullback.
“By doing this, they have to suffer through the pullbacks as they
approach their hard stops, often stopping out for a loss. A trader day
trading the E-minis needs to develop the discipline to wait for the
pullbacks that end at high-probability set-ups before entering a
position.”
Sometimes a monster trend will falter at a key support and
resistance zone with a high TICK spike, looking like a great scalp set-
up or a possible trend reversal. Those inexperienced in day trading
the E-minis will jump all over this set-up and too often get run over by
the continuation of the strong trend. This is where caution is
important. A very strong trend cancels a classic reversal entry set-up.
After a losing trade or two, a new trader will be apprehensive to
40
2 - Trading E-minis
enter the next set-up. The market may pop up to a key moving average
during a strong down trend, and the Tick may record an emotional
extreme, but this trader hesitates to enter. The market will often move
quickly and the edge that this classic RBI set-up had a few seconds ago
is now gone. This is where aggressiveness is key.
Everyone who has ever considered day trading E-minis for a living
has been told something like this, “Are you kidding, the game’s
rigged. It is impossible to time the markets. My cousin tried that and
lost $15,000. I read that 95 percent of traders blow up their accounts.
Better keep your day job.”
No matter what you try to do, it’s going to be tough to get beyond
your own doubts and especially the doubts of your family members
and close friends. This is where true grit, perseverance and an
intelligent, well-informed approach are essential if you want to make a
living day trading E-minis.’
Summary
E-minis are a fast, efficient way to trade the benchmark S&P 500 Index
(and the underlying 500 large-cap U.S. issues) with a single contract.
E-minis provide a smaller contract well-suited for a broad range of
individual and institutional customer needs and E-minis offer
substantial liquidity and tight bid/ask spreads.
E-minis are electronically traded on the CME Globex® platform,
offering speed, reliability, anonymity and trading around the clock,
around the world and accommodate a variety of strategies such as
hedging to protect against adverse price moves, spreading with other
stock-index futures and gaining broad market exposure.
The E-minis market is a level playing field offering open, fair and
transparent markets and offer potentially lower trading costs than
trading a basket of equities or ETFs.
To invest successfully over a lifetime does not require a

stratospheric IQ, unusual business insights, or inside
information. What’s needed is a sound framework for
making decisions and the ability to keep emotions from
corroding that framework.
Warren Buffett

An E-mini Trading Time Table
One successful US day trader shares his trading time table

with us (times are US midwest):
8.00 am Wake up, eat breakfast and read the news
9.00 am Search the Internet for important

announcements that might affect the market.
9.30 am Market opens. I stay passive. Just observing.
9.45-12.30 Enter a trade if there are any opportunities.

Stop loss and profit targets are already
predetermined before entry. After placing a
trade I wait for the trade to develop itself and
watch my profits grow. Usually my profit
target will be hit before 12.30 and I exit the
trade.
12.30-2.00 Eat lunch and workout in my home gym.

Relax and take my mind off the market.
2.00-4.15 Wait for another chance to rip money off the

market. Sometimes when I am lazy, I just
wind up the day and ignore the afternoon
market. The advantage of day trading is it is
flexible. You are in total control and
opportunity abounds everyday.
For a free DVD

42
3.
E-MINI CASE STUDIES
“The secret of success is learning
how to use pain and pleasure instead
of having pain and pleasure use you.
If you do that you’re in control of your life.
If you don’t, life controls you.”
Anthony Robbins
Trading E-minis - How Dennis does it

A very experienced E-mini trader (we will call him Dennis for our case
study) recalls how he resigned from his highly paid job and took a
second mortgage on his house in order to trade E-minis. He also says
that he had to contend with a very worried wife.
Dennis practised and simulated trading E-minis for weeks before
committing to real trades and committing real money. During this
practice period Dennis used to transfer $5 notes from one side of his
home based trading desk to the other side to simulate real profit or
loss situations for many weeks in order to, in his words, 'get a real
feel for trading.' After about six weeks of simulated E-mini trading
practice the $5 notes on the win side of his desk exceeded the $5
notes on the loss side of his desk.
At the same time one of his friends (we will call her Josephine for
our case study) commenced trading E-minis and took out 25 contracts
for her very first trade, despite the recommendation for all new
traders that they commence with just one contract.
Thus the inexperienced Josephine had committed US$25,000 to buy
the 25 E-mini contracts instead of the recommended US$1,000 for just
one E-mini contract. If the market moved up just one point Josephine
stood to gain a 5 percent profit of US$1,250. Should the market drop
by just one point Josephine stood to lose US$1,250.
As luck would have it the market favoured the inexperienced
Josephine who thought that trading E-minis was easy and Josephine
profited by US$1,250 with her very first E-mini trade.
Dennis was inspired by Josephine's success and he decided to try
his hand at trading E-minis with real money. Despite losing money on
his first trade, which with hindsight Dennis says was a good thing,
Dennis soon became a successful trader. Dennis now takes his laptop
on holidays with him and loves to tell his friends about how he can
make profitable trades while on holidays.
Ever the realist though Dennis cautions anyone thinking of trading
E-minis that they will never win on all of their trades.
These days thanks to his success in trading E-minis, Dennis has
assumed mentor status but he still reminds potential E-mini traders
that 'you must have a trading plan' and recommends that potential
traders commit to a clear, concise and disciplined trading plan.
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3 - E-minis Case Studies
Further Dennis advises potential E-mini traders to ascertain what

risk they are prepared to take and that they must take this risk each
time it presents. Then Dennis says, having decided your risk level, you
can decide which trades you will take and to keep your trading simple,
initially in your simulation and then by adopting the same pattern in
your real E-mini trading.
Is Josephine still successfully trading E-minis you ask? After a few
drinks Dennis will explain to you the importance of becoming a
professional trader as distinct from an amateur trader. Then Dennis
will tell you that Josephine was extremely lucky with her first, and in
hindsight very irrational and amateur initial trade, even though she
made a handsome profit. Josephine was not so lucky with her second,
more modest trade for just one contract but with experience Josephine
is now trading E-minis successfully on a regular basis.
The final advice from Dennis is that when you simulate and
practice E-mini trades, you need to bear in mind that you are doing it
without emotion or real money. When you trade with real money,
fear, greed and emotion come into play, so you need to be able to
trade calmly and creatively.
How Bill Trades E-minis

One November morning with the market having ‘sold off’ (prices
dropped) for three straight days, a friend of ours, Bill, decided to bet
the market would rally. Rather than buy the cash index (i.e. through
funds or ETFs that track the SP 500), Bill decided to trade the index
futures, where he has far more margin power and where nearly
round-the-clock trading enables him to buy before the open of the
cash market. His early morning price was 1041.50, or, as it turned out,
5 points below the SP 500's opening price.
Bill bought the E-mini SP contract rather than the regular SP index
contract. The E-mini is one-fifth the contract size and requires far less
money down on margin. A single regular SP contract, which is valued
at $250 per point (or about $260,000 on a 1041.50 price), requires
about $20,000 in margin. An E-mini contract, valued at $50 per point,
requires about $2,000 if you are holding overnight. If you are day-
trading, as Bill was, you can buy up to 49 E-mini contracts on just $500
margin using Global Futures Exchange.

Bill bought 10 December E-mini SP contracts, and, at the same time,

entered an intraday protective stop on his E-mini position to limit his
loss in case his analysis and entry proved ill-timed or faulty.
By evening, with the December E-mini SP up to over 1059.75 (.25
points higher than the cash index's close), Bill was able to sell the
contracts at more than 18 points.
That is 18 times $50 per point times 10 contracts - or a $9,000
profit on the trade.
Remember, when you trade, you are your own best friend or worst
enemy.
It is you against you everyday. Not you against the market. Not you
against another trader.
The market is going to do what it is going to do everyday. Whether
you are in or out. The only thing that determines if you make money
or not, is how you react to market action. Only you can give yourself
money or lose money trading. Not the market, not the system, not the
data, not the software package you use, not the book or seminar you
purchased. Just you!
E-mini trader Glen’s three-step method for long-term E-

mini trading success
Step 1. Decide that trading E-minis is a business just like any other.
Traders who are successful over a long period of time treat their
trading as a business, not a hobby.
Traders who stick around for a while, blow their accounts and give
up are usually trading for the excitement the action gives them or for
the rush of being in the market.
If that sounds like your current trading style, beware. You are due
for a lot of emotional and financial pain before your trading days are
over. Treat trading as a business, learn and test different approaches,
and you will massively increase your chances of long-term success.
Step 2. Don't try to forecast where the market is going - trade reality. If
you think you can forecast where the market is heading consistently,
you are deluding yourself. The bottom line to whether you can
forecast will be your account balance, and for most people who try, it
is not a pleasant experience.
46
Sure you'll get it right sometimes, and that's the most dangerous
thing about forecasting. By tossing a coin you'll be right half the time,
so you tend to get random rewards when you trade. You win some,
and think your forecasting ability is great. Then you lose some after
doing the exact same analysis, and you start to question yourself and
your abilities.
Eventually this lack of consistency forces you to either change your
strategy or give trading away to protect your sanity...
Step 3. Learn how to trade from somebody who is prepared to coach,

guide and mentor you until you are proficient and making money on
your own.
To succeed long-term at E-mini trading you must think and act like
a competent business person in any other market. You will need to
study and learn your craft by taking courses, you will need to develop
a trading plan or a business plan. You certainly need sufficient capital
to ride out your learning curve and become a successful trader.
You will need a certain amount of on-the-job training. You will
learn how to trade the E-mini much more quickly if you have
somebody who's done it professionally watch over your shoulder and
guide you as you trade. You need to be shown how to do it...
If you were mining for gold, what would you prefer; somebody to
sell you a map, a shovel and a compass and tell you where to go, or
somebody to actually take you down deep into the mine, physically
show you to where to dig for the gold, and then help you carry it up
to the surface?
The answer is obvious isn't it?
Practice does not make perfect - only perfect

practice makes perfect
Only perfect practice makes perfect according to
Brad, a US based trader.
“I learned this in my younger years, pursuing a
professional baseball career. Perfect practice will
keep your losses smaller than your gains in the
trading business.
“There are a lot of things involved in perfect
practice. When you get tired, or when the phone
rings, or what not, don't trade.”

Extracts from an E-mini traders diary

We have included this extract as an example of how one committed and
successful trader thinks, works and operates. This story uses the trader’s
own E-mini trading vocabulary.
Friday, January 19th: Morning Comments
9:58 AM CT - It's off to work as Trader Shrink. The AM illustrated a
few important things. First is the importance of flexibility. The odds of
taking out yesterday's lows in ES were quite high, and that was my
initial leaning. When selling dried up early in the AM with only a
modestly negative TICK and not many stocks declining relative to
advancers, I entertained the reverse hypothesis: that we were not
getting selling and that leaning to the long side was the way to go.
The second principle illustrated is the importance of patience. It was a
choppy morning session, and it was easy to get scared out of a good
position. But as long as the overall dynamics of supply and demand
were not shifting, patience was indicated. Finally, you can see how a
drying up of selling (today relative to yesterday) often precedes an
influx of buying. That's a pattern that sets up intraday as well as on a
swing basis. Hope that's helpful; as I write, keep an eye on NQ -
showing a bit of short-term relative weakness. Have a great weekend;
update tonight on the Weblog.
9:44 AM CT - Finally! We couldn't muster selling and once again the
semis (and DAX) led the way before we got a price breakout in NQ and
ES. Notice how in this kind of market, you either have to be very short-
term oriented and take profits quickly or very patient and let a larger
move unfold. As long as the dips in the TICK couldn't bring us to new
price lows, staying with the long side leaning made sense. But it took
real patience, given the chop. Back for a wrap up shortly.
9:31 AM CT - We continue to see very modest selling and recent
strength in semis. I continue to lean to the long side as long as we
don't see lower TICK lows. DAX has been a good leader this AM.
9:23 AM CT - Well, I've scratched two trades this AM, both on good
ideas, but just no follow through on the market moves. We're
oscillating around that 1435 area VWAP; advancers lead declines by
only 100 or so issues - no real conviction, and that's not my best
trading environment. In such a market, you want to identify the day's
average trading price as early as possible and fade moves away from
48
that region as buying/selling dry up. I find that you have to exit such
positions quickly when profitable; it's very easy for your several ticks of
profit to reverse - which is what happened on both my scratched
trades. Still no real signs of selling conviction in the TICK, but buying
is not sustained either, keeping us in the range.
9:06 AM CT - Lots of cross currents with the sentiment numbers;
dollar strength interest rates up. Pullback after the rise, but I'm
looking to see if we get lower TICK lows. If not, I'm leaning toward
buying. Sellers have not shown conviction thus far.
8:50 AM CT - So far, lack of downside and upside conviction and
volume tailing off, leading me to suspect range bound day. Still
anticipating test of lows unless I see evidence of meaningful buying.
8:41 AM CT - DAX strong, but I want to see ER2 buying before I'll
commit long. If ER2 stays below its preopen range, I'm selling for test
of lows.
8:24 AM CT - Forgot to mention; DAX has been strengthening through
much of pre-opening trade and that's led to a bit of a bid now in the
US indices. Something I'm watching.
8:19 AM CT - Not a big news day; Michigan sentiment numbers at 9 AM
CT and that's it. We have options expiration today, so some chop and
range bound trade would not be unusual. We're trading at the lower
end of yesterday's distribution, so I would not be surprised to take out
yesterday's lows, especially if we continue to see under performance
from ER2 and NQ. My full market wrap-up, strategy, and pivots for
today are on the Weblog; I'd expect a test of the 1429 S1 level on ES if
we start out with below average NYSE TICK readings. Overnight
resistance is 1434; Thursday VWAP is 1435; inability to sustain selling
in the AM should bring us to those levels, which would be consistent
with range bound trade. I'll be keeping an eye on early volume to
handicap the odds of such range bound action. The 1431 region is
also overnight support. If you get some free time, check out the post
on trader personality; some interesting findings from a recent pilot
research study.
I know of no more encouraging fact than the ability
of man to elevate his by a conscious endeavour.
Henry David Thoreau

Robert Kiyosaki on financial information and financial

leverage
If you are seriously considering becoming an E-mini trader you may
like to reflect on what Robert Kiyosaki has to say about becoming
financially independent - financial freedom. Kiyosaki is best known for
his books Rich Dad, Poor Dad and Rich Dad's Guide to Investing.
His teachings are of interest to anyone seeking financial freedom. A
large part of Kiyosaki's teachings focus on generating passive income
by means of investment opportunities, such as real estate and small
businesses, with the ultimate goal of being able to support oneself by
such investments alone.
In tandem with this, Kiyosaki defines ‘assets’ as things that
generate money, such as rental properties or businesses, and
‘liabilities’ as things that cost money, such as house payments, cars
and so on. Kiyosaki also proclaims financial leverage to be critically
important in becoming rich.
Kiyosaki stresses what he calls ‘financial education’ as a means to
obtaining wealth. He says that life skills are often best learned through
experience and that there are important lessons not taught in school.
He says that formal education is primarily for those seeking to be
employees or self-employed individuals, and that this is an ‘Industrial
Age idea’.
According to Kiyosaki, in order to obtain financial freedom, one
must be a business owner or an investor, generating passive income.
Kiyosaki speaks often of what he calls ‘The Cashflow Quadrant,’ a
conceptual tool that aims to describe how all the money in the world
is earned. Depicted in a diagram, this concept entails four groupings,
split with two lines (one vertical and one horizontal). In each of the
four groups there is a letter representing a way in which an individual
may earn income.
It is not how much you make,

it is how much you keep,
and how many generations you keep it.
Robert T. Kiyosaki
50
Robert Kiyosaki's Cashflow Quadrant
Employee Business Owner
E B
You have a job You own a system and
people work for you
S I
You own a job Money works
for you
Self Employed Investor
Robert Kiyosaki’s CASHFLOW Quadrant
The letters are as follows.

E: Employee - Working for someone else
S: Self-employed or small business owner - Where a person owns
their own job and is their own boss.
B: Business owner - Where a person owns a ‘system’ of making
money, rather than a job to make them money.
I: Investor - Spending money in order to receive a larger payout in
return.
For those on the left side of the divide (E and S), Kiyosaki says that
they may never obtain true wealth. Conversely, those on the right side
of the divide (B and I) are supposedly following the only road to true
wealth.

Chart showing the exponential growth in the number

of E-mini contracts traded
Five key trading tips that every e-Mini Futures trader

should know to ensure your success as a futures trader.
1. Time frames - There are certain times of day that are best to trade.
In general, you can count on the first 2 – 3 hours of the trading day,
after the New York markets open (9:30am US EST) and the final 2+
hours of the day (2pm – 4:15pm US EST) to yield the most consistent
results. The midday can be rewarding but almost every time we’ve
reviewed trading results, you end up with much more work and effort
for a lot less return during the midday.
2. Trend and Chop - Markets will oscillate up and down much more
often than trend. If you trade a method that succeeds only during
trending markets you’ll have the occasional big day, but any review of
the markets will show that the markets chop and churn more than they
trend. Be sure your trading method does not thrive only in a trending
market, and watch for signal services or strategies that make it a habit
of showing you how great it does on those big moves up or down.
Those are the easiest markets to trade – you hardly need a system for
that.
52
3. Market Context - Know the ‘Average Trading Range’/ATR of the

market you are trading and compare it to the norms. This is important
because many systems/strategies will have fixed targets and stops. This
is fine since you probably will not need to fine-tune these that often
(though you should on occasion, as market conditions and levels
change substantially.) However, your expectations are going to be
different when a market is trading at 50% of its normal trading range
vs. 150% of its normal trading range. When you start to see some real
variance from the norm, that is the time you are going to want to
adjust your targets and stops to accommodate. For example, if the
average trading range in a market over time is 10 points but it drops to
6 or 7 you can bet your normal expected targets are going to
consistently “just miss” – it’s very important to know the overall
context of the market you are trading.
4. Trading the News – You should always be aware of major

economic news. There are many economic calendars available on the
Internet. One of the most comprehensive that also rates the expected
volatility is: http://www.Forexfactory.com
Don’t worry that it says Forex if you are trading futures. The idea
there is that you should know the major reports – and keep in mind
that if you take a trade right at the same time as a release is coming
out, you have gone from a predictable trade per your system to a
completely random event. Many experienced traders are not against
trading in front of or after the news, or even holding through the
news assuming you have set target/stops, but markets love to pull a
complete ‘180’ reversal right at the release, and trading right into that
event typically puts the odds well against you.
5. Key Numbers - Always watch round numbers. Human psychology

has traders doing exactly the wrong things around round numbers.
What we mean by that is entering a buy just below a major round
number such as a 1400, 1500, 1600. This can even extend down to ‘0’
and ‘5’ levels such as 1405, 1410, 1415. Be aware that markets have an
uncanny way of stopping at these levels and reversing – you cannot
adjust for every potential resistance/support point but again, just like
with news you should adjust your entries and/or exits if they happen
to fall right in line with a key round number. That small extra
adjustment will make all the difference for you.
E-minis - Making Leverage and Volatility Your Allies

Given the right tools, strategies, and mental approach, I believe
that E-mini trading is the single most powerful way to deploy
trading capital today. And it’s where I’m spending the majority of
my trading time says E-mini trader D. R. Barton, Jr.
Highly experienced market trader, researcher and teacher in the

markets since 1986 D. R. Barton, Jr. offers these thoughts and advice
for trading E-minis. Barton is the Chief Operating Officer and Risk
Manager for the Directional Research and Trading hedge fund group.
He has been actively involved in trading, researching, and teaching in
the markets since 1986. He has taught extensively in many investment
areas including risk management techniques.
The thought of trading E-mini futures elicits the broadest range of
responses of anything in the markets from “They’re the greatest thing
in the world!” all the way to, “I wouldn’t touch them with a ten foot
pole,” E-mini futures evoke strong and even polar responses.
Given the right tools, strategies, and mental approach, I believe
that E-mini trading is the single most powerful way to deploy trading
capital today.
And it’s where I’m spending the majority of my trading time.
Before we jump in and look at the power of E-minis, let’s cover the
basics of E-mini futures contracts.
In the futures trading world, E-mini index futures have become
something of a phenomenon. They have experienced growth unlike
any other instrument and for good reason.
Let’s start with a very basic overview. E-mini contracts were started
by the Chicago Mercantile Exchange (CME) in 1998 with the S&P 500 E-
mini. It currently is worth 1/5 of the larger, pit-traded S&P futures
contract.
However, the S&P E-mini has far eclipsed its older and more
higher-valued sibling. Currently, the S&P E-mini trades 4.5 times the
dollar volume of the large S&P 500 contract. There are many reasons
for its popularity. Here are just a few:
The E-mini contract is traded electronically on a platform called

Globex.
Trades are executed instantaneously and are basically error-free,

54
especially relative to the pit-traded contracts that may require several

levels of human interaction before orders are executed.
The smaller size and therefore reduced margin requirements of the

E-mini contracts allow a high degree of retail participation.
The extreme popularity of the S&P E-mini has led to a number of

other equity indexes trading electronically in the E-mini size. The
most popular among traders are the Nasdaq Composites, Dow
Industrial, and the up and coming Russell 2000. E-mini trading has
also spread to commodities (gold, oil), bonds, and currencies.
Let’s look at why traders love these instruments so much.
Leverage. One of the biggest advantages for E-mini trading is the high
amount of leverage they offer. And for day traders, this leverage is
increased still further. Let’s look at the actual leverage available: the
S&P E-mini trade unit is $50 times the S&P 500 Stock Index. Currently,
that calculation looks like this: $50 x 1430 = $71,500.
The margin to control $71.5 worth of stock is around $3,500 giving
you leverage of about 20:1 on your money. However, the day trading
margins are dropped significantly with $1,000 margins being common
and some reputable firms offering $500 margins. At these rates, you
can increase your intraday margin to greater than 100:1!
Liquidity. Liquidity is usually thought of in terms of volume, and it is

the characteristic that gives us the ability to get in and out of a trade
both quickly and at a preferable price. E-mini index trading gives us
exceptional liquidity and great fills with little slippage. And these
attributes are very necessary to allow us to take advantage of the
available leverage.
Scalability. There are certain types of trading that can only be used
on a small scale and cannot be translated to larger volumes as success
occurs and larger position sizes are required. But E-mini index
trading in general and S&P E-mini trading in particular are highly
scaleable. Getting virtually no-slippage fills on 200 S&P E-mini
contracts is an extreme advantage.

Success or failure
In the world of academics, mistakes are perceived as bad and to be
avoided. For the first twenty-two years of your life you are taught that
mistakes are bad and embarrassing, when in fact mistakes are simply
opportunities to learn something new.
The more mistakes a person makes, the more they will have
learned and the greater chance they will have of succeeding on their
next try. The key, however, is to learn from your mistakes and never
make the same mistake twice.
Most people are afraid to fail. They worry constantly about not
meeting expectations, making a mistake, or trying something new.
Because of this, many never get started on the path toward reaching
their goals and thus assure themselves of the very thing they are afraid
of - failure.
In order to become a successful trader you will likely have to 'pay
your dues.' You will likely have to fail a few times and learn from your
lessons; only then will you be able to come through a winner. While
you don't have to take wild chances, you do have to take calculated
and educated risks.
Thomas Edison would have never invented the light bulb if he did
not take this principle to heart. Edison failed more than 10,000 times
before he found the filament that would create light for a sustained
period of time.
He did not view these as failures, however. On the 6,635th try to
find a proper filament for the light bulb, Edison did not see himself
has having failed 6,634 times. He reframed the situation so that to him
he had successfully eliminated 6,643 possibilities, refining and
narrowing his search as he proceeded, drawing him closer and closer
to his goal.
For a free DVD

56
4.
BONUS SECTION
MORE INFORMATION
ABOUT TRADING E-MINIS
“If one really wishes to be master of an art,

technical knowledge of it is not enough.
One has to transcend technique so that the
art becomes an ‘artless art’ growing out of
the unconscious.”
Daisetz Suzuki
Using Dynamic Pivot Points to Time E-mini Moves

There are many ways to measure price action in financial markets
according to Austin Passamonte. Basic floor trader pivots are one
long-time chart tool. Floor trader pivots are static levels for any given
day, the levels do not change. They are useful points of reference for
determining different things about price action. Another similar tool
most traders aren't familiar with are dynamic pivots.
Standard floor-trader pivot levels are derived from the prior day's
high/low/close divided by three and then factored to arrive at several
measures of ‘relative value’ of current session's price movement.
Dynamic pivots are values that change with flowing price action in a
given period of time. One of many versions would be measuring the
current price period's range from low to high, and then price points
of 25%, 50% and 75% levels of current low to high range.
These values are based on the high and low measure of any given
period on a chart. For intraday or short-term trading, using the cash
session (pit) only chart or all-session (24 hour) chart will give
different grid levels in E-minis most days.
The same is true for any market that trades electronic and pit
session periods. It is not a question of which time period settings
‘work best’ for price measurement tools like this... they are designed
to be used within the timeframe you already trade. Whether your
charts are set for cash-session only in or the entire 24-hour period
reference is likewise the same preference for dynamic pivot settings.
They compliment your existing approach, whatever it may be.
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4 - Bonus Section
For example, this 500 tick chart of the S&P 500 E-mini futures (ES)
shows price action moving through the pivotal grid of 25% - 50% - 75%
of measure-period range levels. In this case it's the all-session view.
Price action below the 25% level is usually sustained during bearish
trend moves. Price action above the 75% level is usually sustained
during bullish trend moves. Price action tends to pause or turn at the
various grid levels in between.
A similar view is shown on a 5-minute chart of the Russell 2000 (ER2)

chart. It doesn't matter which timeframe setting is used, price action
clearly adheres to the dynamic price levels as it moves up or down
through a given range.
There are many ways to use this tool as part of your trading
approach. Directional bias filters would be one of those. Price action
moving up or down through the scale demonstrates continued
direction or possible trend reversal depending on where it stops and
starts. Using the levels as secondary price points to add contracts for
bigger trade size is another. Aggressive trailed stops or outright exits
at certain levels when open trades appear to be stalling out is another
good use.
Summary
Whatever actual reason(s) dynamic pivot levels affect current and
future price action in a given market is irrelevant. The visible fact exists
that price action across all financial markets do adhere to specific,
repeated patterns when it comes to measured retracements of all
manner. Regardless of all else, price action reacts to these evolving

price levels through any given period of time. Knowing that fact and
using the tool for predictive or reactive purposes can help add to
anyone's overall success.
Austin Passamonte is a full-time professional trader who specialises in E-
mini stock index futures and commodity markets. Passamonte's trading
approach uses proprietary chart patterns found on an intraday basis. He
trades privately in the Finger Lakes region of New York.
Day Trading E-minis

Personally, I trade for 1 point and stop for the day. Why do I do this?
Simple, trading for income is my goal - a consistent and conservative
approach to daily income. I do it every single trading day. I like to be
done early in the morning, so I can have time to do the things I want
to do.
Isn’t time what it’s all about really? You trade your time for an
hourly wage working 8 to 12 hours a day, 5 to 6 days a week, just to
come home tired, bombarded with bills, burdened with chores, and
no time for yourself or your family.
It doesn’t have to be this way, not for the people who choose to
learn a new way using my E-mini commodity futures trading course.
What if you could ‘work’ 30 to 90 minutes a day trading the E-mini
markets? Trading with discipline and a methodology for the purpose
of generating a daily income and then stopping for the day? Day
trading the E-mini Futures Market is a great way to do just that.
Learn to day trade E-minis and learn to make a minimum of 1
point a day. But honestly, you can make more - usually 2 to 3 points a
day.
Interview with E- mini Trader David Marsh.
Would you like to control

your own financial future?
By attending our E-mini seminars you will discover
why in the past 10 years thousands of traders world-
wide have chosen and enjoyed our award winning
training course. Now you can find out for yourself how
we can help you to become a professional trader.
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4 - Bonus Section
Why trade E-minis?

E-minis are cutting-edge products designed for the active trader
who wants to trade electronically and who likes to have maximum
control and highest profit potential.
You can use E-mini stock index futures to:
• Actively trade stock indexes
• Hedge your portfolio or other investments
• Gain broad market exposure at relatively low cost
Trading the E-mini market in Australia

21st Century Eminis conduct regular E-mini training seminars all over
Australia and in Pacific Rim countries. In this chapter we highlight and
detail some of topics covered in the E-mini seminar.
21st Century Eminis offers you the opportunity to learn the simple
yet powerful E-minis trading technique in the live market.
E-mini Indexes are the ideal market to trade

21st Century Eminis offers more than just a class, manual and support
services. It also offers a breakthrough hands-on training chat room by
an expert trading instructor who walks you through the market and
explains every opportunity to you as they form. In our trading
seminar, you will experience how you can achieve long-term success
with short-term trading. You will learn one of our simple, yet most
powerful trading methods to trade the high potential index market,
and you will walk away with a wealth of knowledge that can be used
for life.
You can spend a day at our E-mini workshop and learn:

• The technology of Index Trading
• Risk management
• Profit potential
• Demonstrating the E learning course
• Teach you the probability signals
• Show video footage from their live trading room
• Teach you a winning trading plan
If you don't like what you see, 21st Century Eminis will
refund your money with no questions asked.

What you will learn at a 21st Century Eminis seminar and

on our DVD program:
This is an overview of what is required to learn to master the strategies
involved in trading E-minis.
• What E-minis are and why trading them has become so popular
• A step-by-step, simple, powerful and precise winning strategy
• How to achieve success in live simulated trading before trading with
money
• How to trade professionally full or part time, anytime, anywhere
• How to succeed with 100% online interactive training
• Gain confidence and experience trading E-minis
• The consistent trading range of the E-mini markets along with their
high volume and leverage, offers a perfect trading environment for
short-term trading. Each day, multiple high potential trade
opportunities occur. You can profit whether the market goes up or
down
• Taking advantage of these opportunities is easy using the simple,
powerful and precise Traders
• International training solutions. Whether you want to begin a
career as a professional trader or become a better trader by
managing your financial assets more efficiently, we can help you
become successful
Through dynamic, interactive trading seminars delivered

online and backed by unmatched professional live
market mentorship, the 21st Century Eminis system
builds the confidence and skills you need to effectively
and successfully trade E-minis.
State-of-the-art educational technologies that deliver

realistic market simulations enable students to gain real
experience before risking real capital.
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4 - Bonus Section
The valuable topics covered in the Live Market Online E-Mini

Training Class include:
• Candlestick basics - What are they and what do you really need to
know about them?
• Correct correspondence - Finding the six secret points to every
signal.
• Signal definitions - How to apply them and see the powerful
signals that other traders never see.
• Market trends - How to anticipate them, catch them and stay in
them for maximum profit potential.
• Shorts and longs - Simple ways to profit by going short or long by
focusing on market signals.
• Tight market ranges - How to leverage TIMES to profit from the
slightest market movements.
• Money management and risk control - Remember, survival before
success - these are two top topics every trader must know.
• When not to trade - How to recognise low potential trades and
avoid them.
The E-mini Mentor course is taught in four stages

Learn the simple yet powerful E-minis trading technique in the live
market.
Stage one - Comprehensive Manual Review
Shortly after your registration you will receive our comprehensive
training e-course. Our e-course is extremely thorough and easy-to-
understand with voice over power point, charts and examples. It is
done professionally and includes 26 chapters.
It is available to you online at your free time and you can review it
at your own pace on your computer like watching a DVD. Novices can
easily follow along and experienced traders will gain new insights
from the straight forward clarity, detailed charts and the logical step-
by-step methods.
Once you have done a thorough review of the e-course, usually
within two to four days, you are ready to schedule your live online
class.
Stage two - Live Market Online Training Class

You will participate in a live online training class that will take you
completely through the methodology. From the basics to the most
advanced signal structures, the Online Training Class brings the
method together as it walks through each step of a trade.
Our live e-learning approach creates a convenient and comfortable
teaching environment while enabling total interactivity with the
instructor. Participants can offer comments and ask questions directly
to our instructor.
Stage Three - Trading Internship

This is where the real fun begins. We call it the Trading Internship.
Just as a doctor must complete residence in a hospital after graduating
medical school, you too must do your hands on trading with real
button pushing using a modern state-of-the-art trading simulator
before trading with real money.
Simulated trading almost operates like the real thing, giving you
real fills in real time in the real market with real reports. Since no
actual money is at risk, you are free to hone your skills and have fun
as you gain total mastery and unshakeable confidence in the TIMES
method.
All your previous instruction comes together here as you conquer
signal after signal. Once you achieve 15 consecutive days of successful
trading in simulation, you are ready to graduate to the live market
trading real capital.
Stage Four - Live Market Online Mentorship for five weeks

Even after graduating with full mastery of our method, 21st Century
Eminis is still available to help you improve your trading skills.
As a graduate of 21st Century Eminis you can learn in the live
market Tuesday through Friday, from bell to bell, with your instructor
virtually by your side expertly guiding you through the best trades in
the mentorship room.
This means you will have access to your instructor and join other
traders in these Live Market Online trading sessions for five weeks, at
no additional charge.
What better way to learn than in the real market finding real trade
signals and continuing your trading education in a live environment?
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4 - Bonus Section
Are you ready to start trading E-minis?

If you are ready to get started, our professional staff can get your
training package on its way to you today. If you have ever taken any
other type of training course for trading E-minis, you will quickly see
the difference. 21st Century Eminis delivers professional instruction,
instant access to information using state-of-the-art technology and
ongoing mentorship to build the confidence and experience you need
to be successful.
Couple that with this powerful trading method and you have an
unbeatable combination that could prove to be the most sensible
investment you've ever made in yourself and your trading career.
Gain confidence and experience trading E-minis

The consistent trading range of the E-mini markets along with their
high volume and leverage, offers a perfect trading environment for
short-term trading. Each day, multiple high potential trade
opportunities occur. You can profit whether the market goes up or
down.
Taking advantage of these opportunities is easy using the simple,
powerful and precise 21st Century Eminis training solutions. Whether
you want to begin a career as a professional trader or become a better
trader by managing your financial assets more efficiently, 21st Century
Eminis can help you become successful.
Through dynamic, interactive trading seminars delivered online
and backed by unmatched professional live market mentorship, 21st
Century Eminis training builds the confidence and skills you will need
to effectively and successfully trade E-minis. 21st Century Eminis
invested heavily in state-of-the-art educational technologies that
deliver realistic market simulations so that students gain real
experience before risking real capital.
To access the recommended E-minis Mentor

training program designed to teach
investors how to make US$1,000 to
US$5,000 per week starting from as little as
$5,000 log on to our website

F.A.Q’s. for E-minis

Some frequently asked questions people ask about trading E-minis:
Do you assist me after I finish the education program?
Yes. You receive access to a live trading room where we announce all
the high probability trades in the live market every day.
You also receive access to all our workshops, monthly newsletter
and all updates to the training and education.
You also receive access to a 2-day live seminar which you can revisit
as many times as you wish for for free for 5 years and a Homestudy
Program plus online tutorials - and your spouse can attend the 2-day
seminar free of charge.
There is an incredible amount of hand holding and the ongoing
education for all students that is unmatched by any other trading
education company in the world.
How many trades per day can I expect to get?

There are multiple trading opportunities during the trading day
however our goal is to provide you with a set of high probability
trading signals.
Do you offer trials for non-members in the Trading rooms?

No, members are the only traders allowed access to the live trading
room.
Do we run other workshop dates?

Yes we do. 21st Century Eminis currently runs workshops virtually
every month in all major capital cities and regional areas of Australia
and New Zealand and soon world-wide.
What is the minimum investment per trade?

Just US$1000 is all you need. You can be as big a trader or as small a
trader as you like.
Do you have a payment plan?

Yes we do, from as little as $495 a month and $995 deposit - and the
program comes with a 100%, 90 day money back guarantee - email
info@21stcenturyeminis.com.au and we will send you the details.
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4 - Bonus Section
How soon can I start?

You can start the full program as soon as you pay your full
membership and receive the course within 48 to 72 hours. Simply
email info@21stcenturyeminis.com and we will send you the
membership application forms.
Is the program user friendly for novice traders?

The education program is designed to accommodate all levels of
trading experience, from complete novice to advanced level trader.
You do not need to have trading experience to join and trade with
21st Century Eminis.
How many hours per day do I need to trade?

We recommend you only trade 30 minutes to 2 hours per day. This
time frame each day will give you multiple trading opportunities for a
5% to 10% return.
Do I need a special computer system to trade the E-minis?

You require a computer with Internet Access (High Speed Connection
recommended) - Windows 98 Second Edition or newer
Do you help me set up my trading account, charts and execution

platform?
Yes, we run live web-cast seminars weekly on how to do this and we
walk you through step by step the process of how to set up your
trading account, charts and trading platform.
Is this a black box system or do I need to watch the live market?

You will be watching live charts and therefore 21st Century Eminis is
not a black box system. We are continually updating our trading system
based on the movements in the live market every day. 21st Century
Eminis never stands still and is always moving with the market to
ensure we pin point the best entry and exit points.
Are you the broker?

21st Century Eminis promote the educational company that provides
live training and a live trading room on how to trade the E-minis
market. We are not the broker, charting service or trading platform
provider.
However, we assist traders in setting up their charts, platform and

brokerage account. In fact we run live classes in our web seminar
conference room every week.
We make available to 21st Century Eminis clients access to an online
trading platform for placing trades.
What is the next step?

How can I get more information?
We recommend We recommend you attend an evening workshop or
webinar for free. This is a fantastic way for you to find out all the
details about E-mini trading, terminology, platforms, signal
identification and how we successfully trade. You will prove to
yourself our signals really do work. Simply go to the Booking section
and select the next seminar in your area.
To access the recommended E-minis training

program designed to teach investors how to
make US$1,000 to US$5,000 per week
starting with as little as $5,000 log on to our
website
For a free DVD

68
5.
E-MINI GLOSSARY
HANDY INFORMATION
AND TERMINOLOGY IN REGARD
TO TRADING E-MINIS
“Financial education needs to become a

part of our national curriculum and scoring
systems so that it is not just the rich kids that
learn about money... It’s all of us.”
David Bach
E-mini Glossary and Terminology

ASIC. Australian Securities & Investments Commission
Bear Market (bearish). A market condition in which the prices of
securities are falling or are expected to fall. Although figures can vary,
a downturn of 15-20% or more in multiple indexes (Dow or S&P 500)
is considered an entry into a bear market.
Bull Market (bullish). A financial market of a group of securities in
which prices are rising or are expected to rise. The term ‘bull
market’ is most often used to refer to the stock market, but can be
applied to anything that is traded, such as bonds, currencies and
commodities.
Bull markets are characterised by optimism, investor confidence
and expectations that strong results will continue. The use of ‘bull’
and ‘bear’ to describe markets comes from the way the animals
attack their opponents. A bull thrusts its horns up into the air while a
bear swipes its paws down. These actions are metaphors for the
movement of a market. If the trend is up, it is a bull market. If the
trend is down, it is a bear market.
Call Option. A Call Option is an agreement that gives an investor the
right (but not the obligation) to buy a stock, bond, commodity, or
other instrument at a specified price within a specific time period.
It may help you to remember that a call option gives you the right to
‘call in’ (buy) an asset. You profit on a call when the underlying asset
increases in price.
CBOT. Chicago Board of Trade
CFD's. Contracts for Differences
CME. Chicago Mercantile Exchange
Convergent strategies. Convergent strategy is based on the notion that
every security has an intrinsic value. For equities, that value is based
on the company's expected future earnings and dividend payments,
the expected growth rate of those earnings and dividends and the
degree of uncertainty surrounding these forecasts.
The convergent strategist believes that the intrinsic value of a
security can be estimated and that the price of the security will
eventually will converge to this intrinsic value. Thus the strategy
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5 - E-mini Glossary
searches for undervalued or overvalued securities, securities whose

prices are out of line with their intrinsic values hoping to profit from
the price correction. Examples include equity market neutral, relative
value event driven and arbitrage strategies.
Divergent strategies. Divergent strategy is based on the premise that
past patterns in security prices can reliably predict further price
patterns. The divergent strategist believes that these patterns reflect the
changing attitudes of investors to a variety of economic political and
psychological factors. The strategy has been successfully applied to
equities, equity indexes, foreign currencies, and many other
commodities investments. Examples include managed futures and
global macro strategies.
Dow Jones. The Dow Jones is a price-weighted average of 30 actively
traded blue-chip stocks. It is the oldest and most widely used of all
stock market indicators. The Dow Jones is an indicator of stock market
prices; based on the share values of 30 blue-chip stocks listed on the
New York Stock Exchange; "the Dow Jones Industrial Average is the
most widely cited indicator of how the stock market is doing"
EMA. Exponential Moving Averages
E-minis. An E-mini is a futures contract that can be traded
electronically on the Chicago Mercantile Exchange and is based on the
S&P 500 index. As opposed to normal S&P futures contracts, which
have a point value of $250, the E-mini contract has a point value of
$50. Short for Electronic Mini S&P 500.
E-mini® S&P 500® futures provide investors with an innovative
tool for accessing and managing risks on stock market investments.
Fully electronic and 1/5th the size of a standard CME S&P 500®
futures contract, it closely tracks the price movements of the S&P 500®
Index, the premier benchmark of stock market performance.
More than 1 million contracts traded on average per day in 2006,
making it one of the most highly-traded futures contracts in the world
and reinforcing CME's (Chicago Mercantile Exchange) position as the
world's leading provider of stock-index futures.
E-Mini S&P, often abbreviated to ‘E-mini’ and designated by the
commodity ticker symbol ES, is a stock market index futures contract
traded on the Chicago Mercantile Exchange's Globex electronic trading
platform.
The notional value of one contract is US$50 times the value of the
S&P 500 stock index. It was introduced by the CME in 1998 after the
value of the existing S&P contract (then valued at $500 times the index,
or over $500,000 at the time) became too large for many small traders.
The E-mini has quickly become the most popular equity index
futures contract in the world. The original (‘big’) S&P contract was
subsequently split 2:1, bringing it to $250 times the index. Hedge funds
often prefer trading the E-mini over the big S&P since the latter still
uses the open-outcry pit trading method, with its inherent delays,
versus the all-electronic Globex system.
ETFs. Exchange-Traded Funds
Exit Strategies. Money management is one of the most important (and
least understood) aspects of trading. Many traders, for instance, enter
a trade without any kind of exit strategy and are therefore more likely
to take premature profits, or worse, run losses. Traders need to
understand what exits are available to them and know how to create
an exit strategy that will help minimise losses and lock in profits.
Making an Exit There are obviously only two ways you can get out
of a trade: by taking a loss or by making a gain. When talking about
exit strategies, we use the terms take-profit and stop-loss orders to
refer to the kind of exit being made. Sometimes these terms are
abbreviated as ‘T/P’ and ‘S/L’ by traders.
Stop-Loss (S/L) Stop-losses, or stops, are orders you can place with
your broker to sell equities automatically at a certain point, or price.
When this point is reached, the stop-loss will immediately be
converted into a market order to sell. These can be helpful in
minimising losses if the market moves quickly against you.
Developing an Exit Strategy. There are three things that must be
considered when developing an exit strategy. The first question you
should ask yourself is, "How long am I planning on being in this
trade?" Secondly, "How much risk am I willing to take?" And finally,
"Where do I want to get out?"
Conclusion Exit strategies and other money management
techniques can greatly enhance your trading by eliminating emotion
and reducing risk. Before you enter a trade, consider the three
questions listed above and set a point at which you will sell for a loss,
and a point at which you will sell for a gain.
Fibonacci signals. After making sustained moves in one direction,
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5 - E-mini Glossary
markets tend to retrace a part of that move before resuming the move.
Fibonacci levels provide insights used to forecast support levels and
price targets, based on the strength of the move. Levels are generated
using mathematical ratios discovered by Leonardo Fibonacci in the
12th century.
The Fibonacci series is 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144... and
so on. The sum of any 2 consecutive numbers is the same as the next
bigger number. The ratio between any number and the next higher
number approximates 0.618. The ratio between any number and the
next lower number is roughly 1.618. The number 1.618 is known as
the 'Golden Mean'. Elliot Waves are based on Fibonacci numbers.
The most commonly used Fibonnaci levels are 61.8%, 38% and 50%.
In a strong market, the typical retracement will usually be at least 38%
and may go as high as 62%.
If the market has shown respect in the past to a Fibonacci grid
drawn on the chart, the chances are much higher that it will also
respect those levels in the future market action.
FTSE 100. The FTSE 100 Index is a capitalisation-weighted index of
the 100 most highly capitalised companies traded on the London Stock
Exchange. The equities use an investibility weighting in the index
calculation.
Futures contracts. A futures contract is a standardised, transferable,
exchange-traded contract that requires delivery of a commodity, bond,
currency, or stock index, at a specified price, on a specified future
date.
Unlike options, futures convey an obligation to buy. The risk to the
holder is unlimited, and because the payoff pattern is symmetrical, the
risk to the seller is unlimited as well. Dollars lost and gained by each
party on a futures contract are equal and opposite. In other words,
futures-trading is a zero-sum game.
Futures contracts are forward contracts, meaning they represent a
pledge to make a certain transaction at a future date. The exchange of
assets occurs on the date specified in the contract.
Futures are distinguished from generic forward contracts in that
they contain standardised terms, trade on a formal exchange, are
regulated by overseeing agencies, and are guaranteed by clearing-
houses.

Also, in order to ensure that payment will occur, futures have a

margin requirement that must be settled daily.
Finally, by making an offsetting trade, taking delivery of goods, or
arranging for an exchange of goods, futures contracts can be closed.
Hedgers often trade futures for the purpose of keeping price risk in
check.
Futures contracts guarantee a transaction at a date in the future.
Learn the details behind futures trading, settling future contracts, and
how to price futures.
Gann Predictions based on of price movements on three premises:
1. Price, time and range are the only three factors to consider.
2. The markets are cyclical in nature.
3. The markets are geometric in design and in function.
Based on these three premises, Gann's strategies revolved around
three general areas of prediction:
1. Price study – This uses support and resistance lines, pivot points
and angles.
2. Time study – This looks at historically reoccurring dates, derived
by natural and social means.
3. Pattern study – This looks at market swings using trendlines and
reversal patterns.
Gap. A break between prices on a chart that occurs when the price of a
stock makes a sharp move up or down with no trading occurring in
between. Gaps can be created by factors such as regular buying or
selling pressure, earnings announcements, a change in an analyst's
outlook or any other type of news release.
Gap Trading Strategies. Gap trading is a simple and disciplined
approach to buying and shorting stocks. Essentially one finds stocks
that have a price gap from the previous close and watches the first
hour of trading to identify the trading range. Rising above that range
signals a buy, and falling below it signals a short.
Hedge fund. A hedge fund is a private investment fund that charges a
performance fee and is typically open to only a limited range of
qualified investors. Hedge fund activity in the public securities markets
has grown substantially in recent times. Hedge Funds dominate certain
speciality markets such as trading in derivatives with high-yield ratings,
and distressed debt.
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5 - E-mini Glossary
Indexes or indices. A stock market index is a listing of stocks and a

statistics reflecting the composite value of its components. It is used as
a tool to represent the characteristics of its component stocks, all of
which bear some commonality such as trading on the same stock
market exchange, belonging to the same industry, or having similar
market capitalisation's. Many indices compiled by news or financial
services firms are used to benchmark the performance of portfolios
such as mutual funds.
Some Australian Indexes
All Ordinaries, ASX 200, Industrial, Property
Some Overseas Indexes
Dow Jones (USA), Frankfurt DAX, Hang Seng (Hong Kong), London
FTSE 100, NASDAQ (USA), Paris CAC 40, Russell 2000 (USA), S&P
(USA), Tokyo NIKKEI 225
JOT. ‘Jump on trend’ based on price
Leverage. Financial leverage. The degree to which an investor or
business is utilising borrowed money. Companies that are highly
leveraged may be at risk of bankruptcy if they are unable to make
payments on their debt; they may also be unable to find new lenders
in the future. Financial leverage is not always bad. However, it can
increase the shareholders' return on their investment and often there
are tax advantages associated with borrowing.
Long selling (or Long Position). Long selling is the buying of a
security such as a stock, commodity or currency, with the expectation
that the asset will rise in value. In the context of options, it is the
buying of an options contract.
Long selling is the opposite of ‘short’ (or short position). For
example, an owner of shares in Westfield is said to be "long Westfield"
or "has a long position in Westfield".
Buying a call (or put) options contract from an options writer
entitles you the right, not the obligation to buy (or sell) a specific
commodity or asset for a specified amount at a specified date.
MACD. The Moving Average Convergence/Divergence (MACD) was
invented by Gerald Appel in the 1960s.
The technique is to take the difference between two exponential
moving averages (EMA's) with different periods. This produces what's
generally referred to as an oscillator.
An oscillator is so named because the resulting curve swings back

and forth across the zero line. Appel's version used the difference
between a 12-day EMA and a 25-day EMA to generate his primary
series. This series was plotted as a solid line. Then he took a 9-day
EMA of the difference and plotted that as a dotted line. The 9-day
EMA trails the primary series by just a bit, and trades are signalled
whenever the solid line crosses the dotted line.
MIT. MIT stands for ‘Market If Touched’ meaning that upon reaching
this value a ‘Market Order’ will be automatically placed.
NASDAQ. The NASDAQ (acronym of National Association of Securities
Dealers Automated Quotations) is an American stock exchange. It is
the largest electronic screen-based equity securities trading market in
the United States. With approximately 3,200 companies, it lists more
companies and on average trades more shares per day than any other
U.S. market
PITT traders. Are large volume traders.
Pivot Point Trading. Floor Pivot Point Trading Method. Floor trader
pivot points, or floor numbers, are specific support and resistance
price points that have been calculated using what is referred to as the
floor pivot point formula.
Pivot traders. Trade using pivot points.
Price Gap. A break between prices on a chart that occurs when the
price of a stock makes a sharp move up or down with no trading
occurring in between. Gaps can be created by factors such as regular
buying or selling pressure, earnings announcements, a change in an
analyst's outlook or any other type of news release
Put Option. An option contract giving the owner the right, but not the
obligation, to sell a specified amount of an underlying asset at a set
price within a specified time. The buyer of a put option estimates that
the underlying asset will drop below the exercise price before the
expiration date.
When an individual purchases a put, they expect the underlying
asset will decline in price. They would then profit by either selling the
put options at a profit, or by exercising the option. If an individual
writes a put contract, they are estimating the stock will not decline
below the exercise price, and will not increase significantly beyond the
exercise price.
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5 - E-mini Glossary
Consider if an investor purchased one put option contract for 100

shares of ABC Co. for $1, or $100 ($1*100). The exercise price of the
shares is $10 and the current ABC share price is $12. This contract has
given the investor the right, but not the obligation, to sell shares of
ABC at $10.
If ABC shares drop to $8, the investor's put option is in-the-money
and he can close his option position by selling his contract on the
open market. On the other hand, he can purchase 100 shares of ABC
at the existing market price of $8, then exercise his contract to sell the
shares for $10. Excluding commissions, his total profit for this
position would be $100 [100*($10 - $8 - $1)]. If the investor already
owned 100 shares of ABC, this is called a "married put" position and
serves as a hedge against a decline in share price.
ROI. Return on Investment.
S&P 500. The S&P 500 is a stock market index containing the stocks of
500 Large-Cap corporations, most of which are American. The index is
the most notable of the many indices owned and maintained by
Standard & Poor's. S&P 500 is used in reference not only to the index
but also to the 500 actual companies, the stocks of which are included
in the index.
All of the stocks in the index are those of large publicly held
companies and trade on the two largest US stock markets, the New
York Stock Exchange and NASDAQ.
After the Dow Jones Industrial Average, the S&P 500 is the most
widely watched index of large-cap US stocks. It is considered to be a
bellwether for the US economy and is a component of the Index of
Leading Indicators.
Many index funds and exchange-traded funds track the
performance of the S&P 500 by holding the same stocks as the index,
in the same proportions, and thus attempting to match its
performance (before fees and expenses).
Partly because of this, a company which has its stock added to the
list may see a boost in its stock price as the managers of the mutual
funds must purchase that company's stock in order to match the funds'
composition to that of the S&P 500 index.
In stock and mutual fund performance charts, the S&P 500 index is
often used as a baseline for comparison.

The chart will show the S&P 500 index, with the performance of
the target stock or fund overlaid. The components of the S&P 500 are
selected by committee. This is similar to the Dow 30, but different from
others such as the Russell 1000, which are strictly rules-based.
SEM. ‘Sudden exhaustive move’, based on fear and greed.
Short selling. Short selling involves the selling of a security that the
seller does not own, or any sale that is completed by the delivery of a
security borrowed by the seller. Short sellers assume that they will be
able to buy the stock at a lower amount than the price at which they
sold short. Selling short is the opposite of going long. That is, short
sellers make money if the stock goes down in price. It is an advanced
trading strategy with many unique risks and pitfalls which novice
investors are advised to avoid.
Short selling is neither terribly complex nor entirely simple, though
it is a concept that many investors have trouble understanding. In
general, people think of investing as buying an asset, holding it while
it appreciates in value, and then eventually selling to make a profit.
Shorting is the opposite: an investor makes money only when a
shorted security falls in value.
Short selling involves many unique risks and pitfalls to be wary of.
The mechanics of a short sale are relatively complicated compared to a
normal transaction. And, as always, the investor faces high risks for
potentially high returns. It's essential that you understand how the
whole process works before you get involved.
In finance, short selling or ‘shorting’ is a way to profit from the
decline in price of a security, such as stock or a bond.
Most investors ‘go long’ on an investment, hoping that price will
rise. To profit from the stock price going down, a short seller can
borrow a security and sell it, expecting that it will decrease in value so
that they can buy it back at a lower price and keep the difference.
For example, assume that shares in XYZ Company currently sell for
$10 per share. A short seller would borrow 100 shares of XYZ
Company, and then immediately sell those shares for a total of $1000.
If the price of XYZ shares later falls to $8 per share, the short seller
would then buy 100 shares back for $800, return the shares to their
original owner and make a $200 profit.
This practice has the potential for an unlimited loss, for example,
if the shares of XYZ that one borrowed and sold in fact went up to
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5 - E-mini Glossary
$25, the short seller would have to buy back all the shares at $2500,
losing $1500.
However, the term ‘short selling’ or ‘being short’ is often used as a
blanket term for all those strategies which allow an investor to gain
from the decline in price of a security.
Those strategies include buying options known as puts. In fact,
what is many times labelled short selling is options or futures activity,
since this activity greatly magnifies the gain that results from a
securities price loss.
For example, if the next earnings release of XYZ company is going
to show that its profits declined somewhat in some of its divisions, its
stock might decline only 5 percent when that information is released.
Someone within the company who wants to trade in inside
information however would probably not be satisfied with only a 5
percent gain on his short sell and instead would buy put options or
other derivatives or futures to gain possibly 20 or more percent on the
decline in the stock price of XYZ.
Short selling concept. Short selling is the opposite of ‘going long’.
The short seller takes a fundamentally negative, or ‘bearish’ stance,
anticipating that the price of the shorted stock will fall (not rise as in
long buying), and it will be possible to buy at a lower price whatever
was sold, thereby making a profit (‘selling high and buying low’ to
reverse the adage).
The act of buying back the shares that were sold short is called
'covering the short'. Day traders and hedge funds will often use short
selling to allow them to profit on trading in stocks that they believe
are overvalued, just as traditional long investors attempt to profit on
stocks that are undervalued by buying those stocks.
The short seller owes his broker and must repay the shortage when
he covers his position. Technically, the broker usually in turn has
borrowed the shares from some other investor who is holding his
shares long; the broker itself seldom actually purchases the shares to
loan to the short seller.
Example: Borrowing 100 shares from someone, selling them
immediately at $1.00 - when the stock drops, you buy them back for
$0.50 and give the 100 shares back to the original owner keeping the
profit.
In the U.S., in order to sell stocks short, the seller must arrange for
a broker-dealer to confirm that it is able to make delivery of the

shorted securities. This is referred to as a ‘locate’, and it is a legal
requirement that U.S. regulated broker-dealers not permit their
customers to short securities without first obtaining a locate. Brokers
have a variety of means to borrow stocks in order to facilitate locates
and make good delivery of the shorted security.
The vast majority of stocks borrowed by U.S. brokers come from
loans made by the leading custody banks and fund management
companies (see list below). Sometimes, brokers are able to borrow
stocks from their customers who own ‘long’ positions.
In these cases, if the customer has fully paid for the long position,
the broker cannot borrow the security without the express permission
of the customer, and the broker must provide the customer with
collateral and pay a fee to the customer. In cases where the customer
has not fully paid for the long position (meaning, the customer
borrowed money from the broker in order to finance the purchase of
the security), the broker will not need to inform the customer that the
long position is being used to effect delivery of another client's short
sale.
Most brokers will only allow retail customers to borrow shares to
short a stock if one of their own customers has purchased the stock on
margin. Brokers will only go through the ‘locate’ process outside their
own firm to obtain borrowed shares from other brokers for their large
institutional customers.
Short selling mechanism. Short selling stock consists of the following:
An investor borrows shares, but since there is a general rule in the
United States that one must only borrow money based on shares up to
50 percent of the shares' value, one must deposit 50 percent of the
value of the shares in cash with one's brokerage firm. The investor
sells them and the proceeds are credited to his account at the
brokerage firm.
The investor must ‘close’ the position by buying back the shares
(called covering) - If the price drops, he makes a profit. Otherwise he
makes a loss. The investor finally returns the shares to the lender.
SOQ. Special Opening Quotation
Stochastic process. In the mathematics of probability, a stochastic
process or random process is a process that can be described by a
probability distribution. The two most common types of stochastic
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5 - E-mini Glossary
processes are the time series, which has a time interval domain, and
the random field, which has a domain over a region of space.
Familiar examples of processes modelled as stochastic time series
include stock market and exchange rate fluctuations, signals such as
speech, audio and video - medical data such as a patient's EKG, EEG,
blood pressure or temperature; and random movement such as
Brownian motion or random walks. Examples of random fields
include static images, random terrain (landscapes), or composition
variations of an inhomogeneous material.
Spread trading. Futures spread (or spread) is a long-short futures
position that provides exposure to a spread or difference in two
prices. If both futures are traded on the same exchange, two types of
spreads are possible:
An intracommodity spread (or calendar spread) is long one future
and short another. Both have the same underlier, but they have
different maturities.
An intercommodity spread is a long-short position in futures on
different underliers. Both typically have the same maturity.
Spreads can also be constructed with futures traded on different
exchanges. Typically this is done using futures on the same underlier,
either to earn arbitrage profits or, in the case of commodity or energy
underliers, to create an exposure to price spreads between two
geographically separate delivery points.
Spread trading is the trading of futures spreads. For speculators,
spread-trading offers reduced risk compared to trading outright
futures. This is because the long and short futures that comprise a
spread are usually correlated, so they tend to hedge one another. For
this reason, exchanges generally have less strict margin requirements
for futures spreads.
Stop-Loss Order. An order placed with a broker to sell a security when
it reaches a certain price. It is designed to limit an investor's loss on a
security position. Also known as a "stop order" or "stop-market
order". In other words, setting a stop-loss order for 10% below the
price you paid for the stock would limit your loss to 10%.
It is also a great idea to use a stop order before you leave for
holidays or enter a situation in which you will be unable to watch your
stocks for an extended period of time.

Stop-Loss Orders - Positives and Negatives. The advantage of a stop

order is you don't have to monitor on a daily basis how a stock is
performing. This is especially handy when you are on vacation or in a
situation that prevents you from watching your stocks for an extended
period of time.
The disadvantage is that the stop price could be activated by a
short-term fluctuation in a stock's price. The key is picking a stop-loss
percentage that allows a stock to fluctuate day to day while preventing
as much downside risk as possible.
Setting a 5% stop loss on a stock that has a history of fluctuating
10% or more in a week is not the best strategy: you'll most likely just
lose money on the commissions generated from the execution of your
stop-loss orders.
There are no hard and fast rules for the level at which stops
should be placed. This totally depends on your individual investing
style: an active trader might use 5% while a long-term investor might
choose 15% or more.
Another thing to keep in mind is that once your stop price is
reached, your stop order becomes a market order and the price at
which you sell may be much different from the stop price. This is
especially true in a fast-moving market where stock prices can change
rapidly.
Structured products. Are Synthetic investment instruments specially
created to meet specific needs that cannot be met from the
standardised financial instruments available in the markets. Structured
products can be used: as an alternative to a direct investment; as part
of the asset allocation process to reduce risk exposure of a portfolio;
or to utilise the current market trend.
A structured product is generally a pre-packaged investment
strategy that is based on derivatives (i.e. options and to a lesser extent,
swaps) but which features protection of principal if held to maturity.
For example, an investor invests $100, the issuer simply invests in a
risk free bond which has sufficient interest to grow to 100 after the 5-
year period. For example, this bond might cost 80 dollars today and
after 5 years it will grow to 100 dollars. With the leftover funds the
issuer purchases the options and swaps needed to perform whatever
the investment strategy is. Theoretically an investor can just do this
themselves, but the costs and transaction volume requirements of many
options and swaps are beyond many individual investors.
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5 - E-mini Glossary
The benefits of structured products (such as principal protected

notes) can include:
• Principal protection
• Tax-efficient access to fully taxable investments
• Enhanced returns within an investment
• Reduced volatility (or risk) within an investment
Weighting. An index may also be classified according to the method
used to determine its price. In a Price-weighted index such as the Dow
Jones Industrial Average and the NYSE ARCA Tech 100 Index, the price
of each component stock is the only consideration when determining
the value of the index.
Thus, price movement of even a single security will heavily
influence the value of the index even though the dollar shift is less
significant in a relatively highly valued issue, and moreover ignoring
the relative size of the company as a whole.
In contrast, a market-value weighted or capitalisation-weighted
index, such as the Hang Seng Index, factors in the size of the
company. Thus, a relatively small shift in the price of a large company
will heavily influence the value of the index. In a market-share
weighted index, price is weighted relative to the number of shares,
rather than their total value.
Traditionally, capitalisation- or share-weighted indices all had a
full weighting i.e. all outstanding shares were included. Recently,
many of them have changed to a float-adjusted weighting that helps
indexing.
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6.
E-MINI
TESTIMONIALS
E-mini testimonials
”Thanks for the amazing opportunity you have offered me. I
have always been interested in the trading game but after
reading a lot of information over the years and doing a fair bit of
research, I didn’t even know where to begin when it came to
getting started trading the share market.
All things pointed to a fantastic opportunity to make vast
amounts of money through investing in the market but that only
came with time and extremely high risk, always leading me to
inaction.
You have really made the learning curve a simple one with
your simulation trading dome so that I can learn to become a
confident professional trader with time but little risk. I really enjoy
ultimately having my “hand held” through each and every trade
you take, along with being able to chat live during trading and
having all my questions answered there and then.
Of course the highlight is watching my account grow with your
money management system and knowing that each day is
bringing me closer to my financial and lifestyle goals. Ultimately, I
am truly enjoying being part of a dynamic industry which keeps
me intensely interested day after day……what more could you
ask of a career!! Keep up the good work because you are
changing peoples futures…..”
Amy Mochi
“Believe me or not but this is my 1st testimonial ever and trust

me, i've been in a couple of trading rooms since i first started
back in 2001. When I read testimonials from other trading
website, i'm amazed by those who after only a week, feel
comfortable writing the most amazing testimonial. Well, I've been
with David for just over 1 year and I'm still here. I guess it all
depends on what the you're looking for.
Personally i was sick and tired and going basically no where
learning from moderators who would just shout out trades left
and right. With David, it's a different story. For me he's the
mentor i was always looking for. The mental aspect of trading,
the money management and risk management are the basis of
his success.
Trading is a tough business but if you are willing to put in the
time and effort, i would strongly recommend any serious trader
to join David's room and your odds of success will definitely
increase. When i look back at the mistakes i use to make and
my trading today, it's a different story and that i truly owe it to
David.”
Sebastian W.
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5 - E-mini Testimonials
“Just over a year ago I decided that enough was enough, there
had to be a better way to earn a great income and support my
family than the 70 hr /week executive job I had become used to. I
began searching for a way to spend so much more quality time
with my wife and kids and live my life finally the way I wanted to.
At 32 years of age I could see what working life lay ahead of
me and I was determined to find a better solution. Interested in
the stock market for years I finally gained the courage to
research in depth the various financial instruments and markets,
searching for the vehicle best to begin my trading
apprenticeship.
As a complete beginner, it was overwhelming to digest the
amount of information out there and to know where in the world
to start. I read so many books and looked at so many courses,
products and online trading rooms it was ridiculous! And who
knows, many of these products / services may have been good,
but the problem was that I had zero hours of experience in the
market and therefore had absolutely no reference mark or point
of comparison to effectively measure them from, essentially
leaving me a sitting duck to being scammed! I worked out real
fast that what I really needed was a mentor.
An actual professional trader that has made a lot of money
(and is still making a lot of money!) able to show a complete
beginner the ropes, dramatically shorten the learning curve and
explain in simple language the nature of the market. Fortunately I
didn't waste too much time or money before I found David
Loughnan, a professional trader right here in Australia who was
prepared to take me on as a student. With the statistics of
trading survival against me, I began to gain the necessary
experience trading with Dave while staying determined to
become one of the few traders that make it beyond their first
year.
I can't even begin to describe how much I have learned from
David about trading. Well, 2008 will go down as one of the most
historic years ever in the stock market ( I certainly picked an
interesting year to start trading – who would of knew! ) and I am
still trading now in my second year learning the craft under
Dave's guidance. I am looking forward to a very successful year
trading the E-mini markets with Dave and I feel confident that my
dream lifestyle is now closer than ever.
Michael B
Testimonials are not indicative of future performance success and

may not be representative of the experience of other clients.

Successful E-minis trader David Lougnan

David started his search for a better career around 8 years
ago. Looking over the magazine section of the newsagency while on
holidays he came across an investing magazine. Instantly intrigued he
decided to purchase every investment book and magazine out there.
From there he completed several courses in property and share
markets; however, he still felt there was something missing. It wasn’t
until 2004 when a friend introduced him to the E-minis that David
really found the core of his passion.
Once started, he completed a few courses that were mainly E-mini
driven and started to participate in a few trading rooms. He made all
the same mistakes that every new trader makes. But what he quickly
discovered was that none of the teachers teaching the E-mini courses
suited his own learning style and personality. They did however have
a few qualities’ that would help him in his future.
Whilst learning to trade, David worked full time running his own
business, which would often take up to 12 hours each day. He would
sleep for approximately 4 hours before waking and undertaking his
trading session. It soon became a family joke that his wife would find
him a third job to fill in the couple of hours he had to spare. This
went on for a period of about 12 months before he was able to cut
back his day job hours and increase his trading times.
Once trading successfully, David began to share his passion by
teaching his friends which soon evolved into a career as both an
educator and trader. David has been trading full time for the past 4
years and teaching trading everyday for the past 2 years.
When speaking to people about trading and investing today, David
still finds that many people think of futures speculating as high risk.
Instead, David feels the opposite and believes them to be the lowest
risk markets in the world offering the most sense for many people
looking to get involved in market speculation.
He believes that futures offer incredible leverage and whilst many
think they need to get involved in options to attain large leverage,
David believes the futures markets offer much more leverage than
stocks or options do and that people have been trained to think that
this means high risk, which in fact is not true.
He believes that by using protective stops, these markets become
some of the lowest risk markets in the world and that in the high
volume/liquid futures markets you are much more likely for your stop
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5 - E-mini Testimonials
to be filled where you want than you are in stock trading.

David understands that what traders really want is the guidance,
mentorship and support of a professional trader. For this reason he
has developed an all round professional training program that offers
education, support, sound methodology that is executed live using
real money, in simple terms that new traders will understand. David
believes in leading from the front and does everything he talks about
and educates people based on his own methodology.
For a free DVD


A trading career in E- Chart showing the trading - risk and

minis 2 exponential growth in reward 35
Advantages of Trading the number of E-mini trading tip 32
Mini S&P 500 Futures contracts traded 52 Making Leverage
and Options 8 Chicago Mercantile and Volatility Your
Advice for trading E- Exchange (CME) 4, 5, Allies 54, 55
minis 36, 37 8, 15 E-minis
Affordability 8 CME index products 8 traders use a range
An E-mini Trading Time Comprehensive Manual of charts to make
Table 42 Review 63 informed decisions
An introduction to Cost of trading E-minis, 21
trading E-minis 20 What is the? 32 trading advice from a
Are you ready to start successful trader 37
trading E-minis? 65 Day Trading E-minis 40, v. Stocks 28
60 A trading career in 2
Background on the E- Dennis, How, does it ease of use versus
mini Contract 16-17 44, 45 options 29
Barton D. R. 54, 55 Developing a Trading Edison, Thomas 56
Because E-minis are Plan 38 Equities investors like
futures, they offer Do I need a special the great ‘tradability’ of
some unique additional computer system to E-minis 10
features 10, 25, 26 trade the E-minis? 34 Exchange-Traded
Benefits of E minis 6, 7 Double tops 24 Funds (ETFs) 7
Buffett, Warren 14, 41 Douglas, Mark 39 Exit
Dow 30 5 Plan 38
Can I trade Dow Jones strategies 28
E-minis without day- Industrial Average Exposure 8
trading them? 35 monthly price chart 7 Extracts from an E-mini
my super fund and The 7 traders diary 48, 49
pay for the course DVD program 62
using it? 34 DVDs free offer 85 F.A.Q’s for E-minis 66-
Candle sticks 22 Dynamic Pivot Points to 66
Case Studies Time E-mini Moves, Financial
E-mini trader Glen’s Using 58-60 future, Would you
three-step method like to control your
for long-term E-mini own? 60
E-mini trading charts 22 information and
success 46, 47 Contract, financial leverage 50
Extracts from an E- Background on 16-17 Five key trading tips
mini traders diary 48, Glossary and that every e-Mini
49 Terminology 69-84 Futures trader should
How Bill Trades E- Indexes are the ideal know 52, 53
minis 45 market to trade 61 Free DVDs offer 85
How Marcus made market profit Frequently asked
$9,000 in a night potential 30 questions 34
with a $4,000 outlay Money Management Futures traders care
15, 16 3 about only two things
Trading E-minis - S&P 500 futures 5 31
How Dennis does it testimonials 86-89
44, 45 trader Glen’s three- Gain confidence and
step method for long- experience trading E-
Cashflow Quadrant, term trading success minis 65
Robert Kiyosaki's 51 46,47 Glen’s three-step
CBOT mini-sized Dow Trading Time Table method for long-term E-
12 42 mini trading success
89
Index
46,47 MACD (Moving Average simple advice for

Globex electronic Convergence trading E-minis 36
trading platform 5 Divergence) 21 Special Opening
Glossary and MACD and Stochastic Quotation (SOQ) 9
Terminology 69-84 23 Stochastic 21, 23
Making Leverage and Success or failure 55
How Volatility Your Allies 54, Suzuki, Daisetz 57
Bill Trades E-minis 55
45 Market Context 53 Technical double
can you be right Marsh, David 60 bottoms 24
more times than Money Management 35 Terminology 69-84
wrong? 30 Most people are afraid Testimonials 85-87
Dennis does it 44, to fail 56 The
45 Chicago Board of
do E-minis compare NASDAQ 4, 13, 15, 35 Trade 12
to Options? 29 components of the
do E-minis compare Only perfect practice S&P 500 14
to stocks, CFD’s and makes perfect 47 Dow Jones 7
options? 29 Opportunity 8 Emini Mentor course
do I make money is taught in four
trading E-minis? 31 Passamonte, Austin 58- stages 63, 64
do our signals 60 electronically traded
perform? 31 Practice does not make CBOT mini-sized
do we identify perfect - only perfect Dow 12
signals? 31 practice makes perfect Road to Riches.
long does the 47 What it takes to be a
training take and Price gaps and consistent winning
how long till I trade variations 21 E-mini trader 35
real money? 34 Profit potential 30 S&P 500 Index was
many hours per day market-value
do I need to trade? Remember, when you weighted 15
34 trade, you are your own valuable topics
best friend or worst covered in the Live
Identifying signals 31 enemy 46 Market Online E-Mini
Indexes, E-mini 61 Risk and reward 35 Training Class
Integrity 8 Russell 1000 5, 15 includes 63
Items for consideration Thoreau, Henry David
and comparison 28 S&P 49
1500 4 Three basic indicators
Key Numbers 53 500 13 21
Kiyosaki, Robert 50, 51 500 index 4, 9, 13-15 Time frames 52
500 Index, Linear To trade E-minis we
Leverage 55 graph 4 use three basic
Linear graph of the 500 record 14 indicators 21
S&P 500 Index 4 90 13 Trading
Liquidity 55 Global 1200 4 hours 31
Live Market Online MidCap 400 8 Internship 64
Mentorship for five Scalability 55 Plan tips 38
weeks 64 Some Plan, Your 38, 39
Training Class 64 benefits of E minis 6, Signals - The Power
Logarithmic graph of 7 of T3 32
the S&P 500 13 Facts About the S&P the E-mini market in
Lougnan, David 87 500 Index 9, 13-15 Australia 61
Lower lows 25 real trading examples the E-mini S&P 500 -
31 an example 11
90
the News 53 trading E-minis? 6

Trading E-minis 21 you will learn at a
Advice for 36, 37 21st Century Eminis
An introduction to 20 seminar and on our
has many DVD program 62
advantages over When
other forms of not to enter an E-mini
trading and share trade 33
investment 20 to enter the E-mini
How Dennis does it market 33
44, 45 to exit the E-mini
some frequently market 33
asked questions 34 Why trade E-minis? 3
Trend and Chop 52 Why trade E-minis? 61
21st Century Eminis Will I be trading in
advice on how to Australian (AUD) or
profit from learning, United States (USD)
understanding and dollars? 34
trading the E-mini Would you like to
index 26, 27 control your own
training seminar 11 financial future? 60
Understanding You can spend a day at

candlesticks 22 our E-mini workshop
Using Dynamic Pivot and learn 61
Points to Time E-mini Your Trading Plan 38,
Moves 58-60 39
Valuable topics
covered in the Live
Market Online E-Mini
Training Class include
63
What
exactly are Mini S&P
500 Futures? 9
is an E-Mini? 3-6
is the cost of trading
E-minis? 32
is the most I can
lose on any given
trade? 34
is the next step? 68
is the Special
Opening Quotation,
or SOQ? 9
it takes to be a
consistent winning
E-mini trader 35
start up capital will I
need? 34
to include in your
Trading Plan 38
type of people are
91

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21 ST

“A STEP BY STEP, SIMPLE, POWERFUL & PRECISE STRATEGY”

In preparing this information, we did not take into

Before making an investment decision, you need to

Any 21st Century Eminis seminars held within Australia

Published by 21st Century Publishing

Tel: 1800 999 270

Copyright 2007-9 21st Century Publishing

All rights reserved. No part of this book may be reproduced or

National Library of Australia

How to make $1000 to $5000 per week trading E-minis starting

Some of the topics covered in this book include:

3 E-mini Case Studies............................................................... 43

5 E-mini Glossary and Terminology..................................... 69-83

5 E-mini Testimonials.......................................................... 84-87

A trading career in E-minis

Why trade E-minis?

You can use E-mini stock index futures to:

• Actively trade stock indexes

• Hedge your portfolio or other investments

• Gain broad market exposure at relatively low cost

For a free DVD and access to a free webinar go to

Linear graph of the S&P 500 Index from 1950

Many index funds and exchange-traded funds track the performance

E-mini® S&P 500® futures provide investors with an innovative tool

For a free DVD and access to a free webinar go to

protect against adverse price moves, spreading with other stock-

The Dow Jones

Dow Jones Industrial Average monthly price from 1900

For a free DVD and access to a free webinar go to

Advantages of Trading Mini S&P 500 Futures and Options

What, exactly are Mini S&P 500 Futures?

What is the Special Opening Quotation, or SOQ?

Because E-minis are futures, they offer some unique and

Equities investors like the great ‘tradability’ of E-

Trading the E-mini S&P 500 - an example

The electronically traded CBOT (The Chicago Board of Trade)

Some Facts About the S&P 500 Index

E-mini Case Study

Background on the E-mini Contract

For a free DVD and access to a free webinar go to

For a free DVD

An Introduction to Trading E-minis

For dates and locations see

Trading E-minis has many advantages over other forms of

To trade E-minis we use three basic indicators.

E-minis traders use a range of charts to make informed

For a free DVD and access to a free webinar go to

A candle stick is a price chart that displays the

The candle sticks paint us a picture

Understanding candle sticks

the highest price for the day

open or closing price

body is black (or red) if stock closed lower.

open or closing price

the lowest price for the day

MACD and Stochastic

This charts shows MACD and Stochastic trends

For a free DVD and access to a free webinar go to

This charts shows 'exact double tops'

Technical double bottoms

This charts shows 'technical double bottoms'