So far, day trading eminis in 2012 has been nothing but fantastic. It isn’t the massive volatility that we found in 2008 that provided huge profits, it also isn’t the almost dead market that we saw at the beginning of 2011, it happens to be right inbetween.
The volatility in the Eminis started off with a burst of volume which was the tail end of a volume and volatility spike at the end of last year. As everyone started to digest what was going on with the Euro, Greece, and risings in the Middle East, volume started to peak and settle at around the 2.1 million contracts a day range.
I found it very interesting how the market reacted to events and how the volume actually stayed rather flat throughout 2012 compared to other years. The first yellow circle (from the left) is the 2008 financial crisis and the the second circle is the spike in volume that we saw at the end of last year. You can see how the market volume stayed relatively flat throughout the first half of 2012 and decreasing just a bit.
When we zoom in and look at the daily volume levels it tells a different picture. One of the things that I see correlated with the beginner results, especially the June’s results, is how we are able to see two extremes as the volatility and volume spikes. In the first 4 months of the year, the beginner results showed average winning days of 2, 3 and sometimes 4 points. With the spike in volatility the average went up to 4, 5, and 6 points with unusual peaks of 8 to 10 points.
The extremes didn’t stop on the winning days, the losing days also showed similar results. In the first 4 months of the year there were only 5 days where the stop limit was reached, a stop limit is a certain amount of money lost per day that forces a trader to stop trading for that day.
There were five of those days in June, let alone 2 in May.
It will be interesting to see what happens throughout the rest of the year. July 3rd, the day before the July 4th Independence holiday, was one of the lowest volume days of the year. July 6th popped right back up very near the average of 2.1 million contracts traded daily now on the Emini SP 500.
It was really interesting to take this approach on day trading because I never use any kind of fundamental analysis when it comes to my personal day trading. I focus on strictly technicals and the indicators that allow me to gauge the current days activity and see where the market is going and how to react to it.
I held a NinjaTrader yesterdat today where I was able to officially introduce the MIND Congressive Trading System. The idea is focus on the market and understand how the market moves and learn why it moves the way it does. I explained to everyone that the focus in the day trading industry has become nothing but indicators, in how many shiny colors they come in and how they are unique and proprietary.
The focus with the MIND Congressive Trading System is to pay attention to the market and learn how it works in order to anticipate market movement and get in on the edge. This allows us to minimize risk immediately by getting in even before the market pivots and focus on anticipating where the targets our in order to maximize our profits.
Day trading eminis while teaching and traveling around the world has proved to be a crazy ride in the last 6 months. Even though I have been trading for roughly 10 years I have never been able to meet such unique people that have the same passion. I am always overwhelmed by how many people reach out to me and request training on how to reach their own financial freedom. Just wanted to take this moment to say thank you.
Onward to the end of 2012!
Don’t forget to check out the disclosure that the good old boys at the CFTC require me to share with you.