Trade to Win: Proven Strategies to Make Money

Chapter 10. Money Never Sleeps

More than two decades ago, I worked for a brokerage house where the bull was all but idolized. Being a team player and a good employee, I followed the "bullish" philosophy, but found myself losing money far too often. Going long is simply not always the right thing to do to make money. I knew that I needed a product that allowed me to be profitable in both up and down markets. Traders who limit their trading to only long positions are very limited in their ability to adapt and trade when economic hard times come and the bears rule. I was considering this problem and looking for a solution when the Chicago Mercantile Exchange (CME) announced that they were introducing a new product, the S&P 500 index futures.

I knew that I needed to trade the S&P, and I immediately did so. Initially, the contract offered was a big contract that traded for $500 per point. A few years later, the contract split, and today it trades for $250 per point. A short time after being introduced, the product line was again expanded with the debut of the E-mini. The E-mini is valued at $50 per point. The lower point value makes this product more appealing to a wider audience of traders. Today, the S&P futures are one of the most frequently traded futures contracts, with over a million contracts traded on the average business day. The volume of activity makes this a great place for day traders to make money. With so many buyers and sellers, it generally only takes a click of the mouse ...