Are you looking for a reason to day trade the micro futures? Well, you’re in luck because I’m not going to give you one reason, I’m going to lay out five simple reasons you should be day trading the micro futures.
As you will see from the list below, the micro futures is for any account size and can offer you opportunities to grow your account daily. So let’s jump in!
1 – Low Margins
The first reason you should be day trading the micro futures is that the margins needed to day trade several of the future contracts are very low. Most brokers allow traders to open a position for only $50 of margin. The E-mini ES (S&P 500) future contract has an average daily trading margin of $500.
2 – Small account? No problem
The second reason day trading the micro futures can be right for you is that day trading the micro futures can be done using proper risk management with a small account size. Each tick on the MES micro (S&P 500) futures contract is only $1.25 vs. $12.50 trading the ES E-mini (S&P 500) futures contract. Also, trading futures does not have the $25,000 pattern day trading rule.
3 – Better risk management
Are you looking for better risk management? The micro S&P 500 futures contract is 1/10 the size of the ES E-mini contract. What this means is that each tick is only $1.25 vs. $12.50. You might ask how this benefits you as a trader. Well if you are trading with a small account, it reduces the amount you will lose if you are wrong on the direction of your trade.
4 – Liquidity
Do you like the idea of being able to get in and out of trades quickly with little to no slippage? On the first week of trading for the MES micro (S&P 500) futures contract, there were 5-minute periods that had several thousand contracts traded. Volume on the MES contract was higher than even some of the currency futures contracts.
5 – Opportunities daily
Finally, who doesn’t want an opportunity every day to grow their account size? The ES and MES future contract trade in ticks. There are four ticks for each point. As I’m writing this blog, the average true range or daily ATR of the last 14 days is 48 points in the ES and MES contracts, which means there are approximately 192 ticks of opportunity per day. If you compare this to the Forex market or the currency Futures market, you will see why I think this could be one of the best markets for traders.