Why I Day Trade the E-Mini Dow


Among those who day trade stock index futures, the E-mini Dow futures market is one of the best kept secrets on Wall Street. Many E-mini participants trade the S&P 500 (ES), Nasdaq-100 (NQ) or Russell 2000 (RTY). For various reasons, these markets are not as easy to trade. ES is mostly controlled by institutions which gives it a jerky institutional flavor in moving from one price level to another. NQ and RTY are noticeably volatile in a way that makes fluid participation more challenging. If you have traded these markets as I have, you know what I am talking about.

The Chicago Board of Trade (CBOT) introduced the E-mini Dow in 2002. With my usual skepticism toward new markets, I did not jump onboard right away. Instead, I monitored volatility levels for a period of time to make sure that the market was tradable. Eventually, I concluded that YM was a great place for day traders. It contains enough energy and price swing to make substantial profits possible.

I have traded E-mini Dow futures for over 20 years. In that time period, my positive opinion of the market has not changed. Three primary reasons exist for trading it.

YM displays orderly movement. Prices trend nicely, form stable support and resistance levels, and produce strong trade signals when appropriate indicators are used. Orderliness translates into better trading performance. If I know that a market is less likely to throw curve balls at me, I can trade it with increased confidence.

YM is a strong market for multiple-contract trading. A trader can establish a position with two or more contracts and then take money off the table in small increments as profitability increases. Since each tick (point) in YM is valued at $5.00, the total risk on a multiple-contract position is kept to a minimum in comparison with other stock index futures.

YM offers a good place for learning. The market is highly visible and liquid due to the prominence of the Dow name. As a result, traders can try new strategies in a relatively safe environment.

In my quest to help day traders improve their market performance, I have released a comprehensive book containing numerous charts, concepts, trading methods, and examples. At 462 pages, this book is the definitive guide for day trading the E-mini Dow. I use it as the basis for my own trading and for training clients. Regular discounts are available. You can preview the book and purchase your copy on our book buyer’s page. As helpful supplements to the book, eLearning courses are also available.