By Doug Fisher
Mini Dow futures are excellent day trading vehicles for traders seeking short term profits. These index futures contracts have seen a significant increase in trading volume as well as the amount of market participants utilizing them as their dominant source of income. Attracted to the volatility and liquidity, traders employ varying methodologies to enter and exit the market. Day trading is the favored method traders use, while others scalp a few points for smaller profits and may execute a large number of trades everyday.
Some traders may use pivot points for trade execution, relying only on certain levels where the market is likely to "pivot" to trade, while some may use moving averages and crossovers to determine when they enter and exit the market. Index future traders all have their favorite indicators, charts and oscillators they use. However, all successful traders have one trait in common. All have a trading system they use in order to be successful.
All trading systems are designed to alert traders to possible trade set ups with set ups being the primary focus of most traders. However, a trading system is incomplete if sound money management principles are not a part of the system. Much has been written about how to enter the market with much less emphasis on the practice of money management. Determining how many contracts should be traded is an important factor just as when to exit the market if a trade goes bad, both of which are important attributes of money management within a trading system.
However, no trading system will be successful if the trader does not exercise the discipline to follow the rules of their trading system. In order to be successful as a index futures trader, a system that includes sound money management rules must be implemented.
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