By Lachlan Elsworth
Lachlan Elsworth is the Senior Trader for Traders International [Dot] Com in Australia, New Zealand and South East Asia. Lachlan is a passionate Day Trader, Day Trading Coach and International Speaker on Day Trading Emini Futures and FOREX. Lachlan shares some home truths about the huge advantages of a Smart and Systematic approach to Day Trading the markets.
1. Why specialise in FOREX and EMINIS?
Great question! Having a choice of markets gives a new trader the option to choose what market they prefer to specialise in. FOREX is typically dynamic and fast, offering huge returns very quickly. EMINIS, in comparison, is generally a slower more mechanical market suited to the longer term trader/ investor. Key point is this; both the FOREX and EMINI markets offer a wonderful education platform for a new trader provided a step by step introduction and education process is used.
2. What are the key ‘home truths’ that a new trader should consider when starting day trading?
With the right approach to Day Trading, the profit potential is enormous. The first step is to get a good grounding and create a realistic expectation.
Firstly, if you want to start day trading, try to avoid the fancy ads and the sales hype and instead focus on trialling an education strategy for free. FREE trials are a great acid test and should include a complete product overview, live charts introduction, signals introduction, the works. Only when you have done this will you know if the strategy is right for you and it should be before you have spent a cent.
Secondly, seek simplicity; a course that ideally uses no more than four trading strategies is a great start as it should enable you to understand the strategies quickly, and start to use them live in the market.
Thirdly, Live Coaching on how to use the education package is probably your most powerful step forward. Trading by yourself is no doubt the fastest way I know to trade badly and develop bad habits. Do not fall into this trap, and instead, seek to trade in a live trading room with coaching staff on hand to help you understand what you are doing every step of the way.
A personal note: When considering a Live Trading Room, ensure the room results are recorded and publicly available on respective websites. If not, ask why not? Be very wary of signing anything if a company does not publish its results.... this may sound obvious but I have fallen for this myself before!
3. Are there some key advantages to look for when considering day trading in the markets?
There are huge advantages if you know where to look. Trading both FOREX and EMINIS affords you some very valuable advantages that should be considered by even the most conscious of investors.
Trading an Emini Futures contract, when compared to more widely advertised trading instruments like CFD's (Contract for Difference), Options and even Shares, offers multiple advantages to new traders. When evaluated against other instruments, Emini Futures trading offers very low entry and exit cost, great earning potential, great leverage, no interest charges, almost 24 hr/day trading, no time decay on your position and minimal complexity. These are just seven of a long list of key advantages new day traders are already enjoying each trading day and they all combine to offer very cheap trading.
Emini Futures trading allows new traders to effectively cut out the middle men and instead trade direct into the market when they choose to. Cheap trading with an entry and exit fee as low as $2.50 US is a Smart Trading tactic. Why pay retail when you can pay wholesale almost 24 hours per day!
FOREX Day Trading
A second market to consider is the FOREX market. It is almost as cheap to trade as an EMINI, can also allow a trader to make money in both directions, but offers a far greater market choice and far larger trading opportunity. Let me explain.
Trading ''FOREX'', or Foreign Exchange, is a process of trading one currency against another, just like when you go for a holiday overseas. Currency is generally traded in pairs, say for example, the Japanese Yen (Yen) versus the United States Dollar (USD). Fact is, there are many hundreds of currencies and hence thousands of possible currency pairs. This results in a massive international market and trading opportunity every trading day. The world markets currently turn over more than $3 Trillion USD worth of liquidity (or trading opportunity) during a typical FOREX trading day.
4. What does it take to learn a strategy and is a “system to follow” important?
Learning a strategy takes a steady hand and the ability to control your emotions. That, in itself, is no small feat, but emotions (specifically greed) are one of the toughest obstacles every trader must master. Smart traders who are keen to be successful will always systemise their trading as much as they can by looking for a well defined signal set, on a specific chart, and they will always do this under the supervision of a professional trader or trading team.
Once a strategy has been tested and has proven successful it serves as a great foundation for a trading system. Systemising your signal set and trading strategy allows you to inject a degree of certainty into your trading. How you might ask? A good signal set will tell you exactly when to get into the market and where to get back out. This kind mechanical exit and entry has a very positive effect on your trading psychology as it helps to limit your emotions while trading. The more mechanical you can make your trading the better. I recommend you start with a strategy that has been proven over multiple years and in many market conditions. The last 18 months is testament to how much the world financial markets can change without notice.
5. Should everyone be Day Trading?
Absolutely! I think Emini and FOREX trading offers almost any person the opportunity to make money trading regardless of their background. Day trading allows you to get your life back from the 9-5 grind. Good traders get to spend more time doing what they love doing, and less time at their desks. Set a goal of $1000.00 per day then go get it! Trading is for anyone who is committed to achieving a great goal and is willing to do the hard yards to get there!
A personal note – ensure that you utilise a professional trading team that have been around for over ten years. The more trading experience they have the better for you I say!!!
Lachlan Elsworth is an international speaker, international day trading coach, and Senior Trader for www.tradersinternational.com in Australia, New Zealand and SE Asia.
