Our 4 Phase Plan To Get You Trading The Emini Futures Like A Pro – 100% Mechanical
If you can follow this four part plan with our Momentum System and stay disciplined you are on your way to success.
Phase 1 – Get Started And Trade On SIM for 1 Week
It is very important that you first spend your first week following the Momentum Breakout System on SIM MODE just to give yourself time to work through the basic mechanics and witness for yourself how the system performs over the series in different market conditions WITHOUT any emotional influences or attachment to live capital. This prevents the dumb-luck of potentially hitting a few draw-down days in bad market conditions right off the bat, losing money and deciding it’s not working BEFORE the system has a chance to recoup the losses and move on to profitability. The hallmark of any good system is that it will automatically self-correct over the series of trades, but one has to stick to the series for this to work. If you rush into things in a live account, incur upfront losses, get emotional and quit out of fear … you shoot yourself in the foot. Slow, steady and methodical is the better approach.
This Is Currently Working Great!
Phase 2 – Begin Trading LIVE with 2 Micro Contracts And Take Profits At Target 1 and Target 2
To keep things real basic and the initial risk low we recommend EVERYONE get started following the Momentum Breakout System with only 2 Micro contracts and take profits at Target 1 and Target 2 – using the main wide system Trailing Stop. Target #1 has roughly a 75% or greater chance of getting hit and Target 2 will get hit just under half the time for a significant point gain. You will enter 2 micro contracts (MES, MNQ, MYM) at market after the official trade entry confirmation and then immediately place a sell limit order to exit 1 contract at T1 and a limit order to sell the other contract at T2. Place your initial protective stop loss at the system stop level and then just move your stop when the momentum system alerts you to do so. (Note: If you notice price getting super close to target 2 you have the option of discretionarily deciding to move your stop to Break-even or even Target 1 at that point). Follow this for 3-weeks and this will complete your first month.
Phase 3 – Graduate To 3 Micro Contracts and Still Scale Out Your Exits At T1 and T2.
At the start of your second month you can graduate to 3 Micro Contacts and follow the same exact approach except that you will now Sell 2 Contracts at Target 1 and Sell the remaining contract at Target 2 (or the trailing stop – whichever gets hit first. Target 1 gets hit roughly 75% of the time. Since the Trailing Stop will have you near “virtual breakeven” once Target 1 gets hit, this will typically ensure you come out of any trade that hits T1 with a profit.
Phase 4 – Scale-Up To 4 Micro Contracts – Scale Out Your Exits At T1 and T2 (same as above) but hold the final Contract for a “Runner”.
Once you’re ready to take the next step and unleash the full power of the Momentum System, you can scale-up to 4 Micro Contacts and follow the same exact approach except that you will now Sell 2 Contracts at Target 1 – Sell 1 Contract at Target 2 – and hold the 1 remaining Contract as the “Runner” and just manage it using the Trailing Stop. The advantage to this will become apparent on the occasional “long-range day” where the price hits both T1 and T2 and just keeps trending in the same direction for a massive move.
Since the trailing stop will be right around your Entry by the time T2 gets hit, there’s literally no risk of holding any additional contracts once you’ve locked in gains at T1 and T2. With the “runner” contract in place, you will typically see the price tag the trailing stop somewhere between T1 and T2 but on occasion – on certain occasional “long range days” in the market – the trailing stop will surpass T2 and then your runner can really score big points. This is going to be a function of the market itself, but we know that big market moves occur and this is the way you’ll capture a bigger point gain that you’ve probably ever imagined.
How To Pyramid Your Way To Even Greater Profits
If you follow our 2 month “Getting Started” plan following the Momentum Breakout System mechanically you should be well on your way to gradual consistent profits in the futures market. At this point you have the option of simply following the T1-T2 exit strategy and increasing your position sizes each month using a simple Contract Progression Strategy, i.e. 2, 4, 6, 8, 10 etc.
(Note: 10 micro contracts = 1 standard emini contract so when you reach 20 micro contracts you will want to graduate to the full sized contract as they offer a lower commission cost, so you would start back at the 2 contract level again and begin pyramiding the full sized contract from there.) Variation #2 on a similar theme involves pyramiding 1 new contract each month and scaling out over the 2 targets or being taken out at the trailing stop whichever comes first.
The important thing to remember is that BIG POINTS ARE SCORED WHEN PRICE HITS TARGET 2. And also on the occasional “RUNNER” contract – on certain days where the market makes a significant directional move. So you want to build up to the point where you are able to hold a “runner” contract that hits the occasional home-run. Long-range days are guaranteed to occur, it’s just a matter of realizing they don’t occur every session.
There are many possible variations on trade management using the Momentum Breakout System but the most important thing to keep in mind is to keep it simple and low risk at the beginning starting off with the smallest unit size (2 micro contracts) and only advance to build size based on performance over time.
Your “Trading Plan” is to start off with 2 Micro Contracts and scale up slowly over time.
Only add a contract if the prior 2-3 week period was profitable and your account size has grown.
If the prior 2-3 week period was not profitable – stay at the same level until it is.
A new user has to get used to the idea of trading “big points”. So trading the Micros is basically trading “lunch money” – and over time that gives the proper perspective.
Many new users are used to trading the Full-size Contract for a few ticks or points, so the Momentum System with its wide stops and huge targets, requires a completely different mindset – which can only be properly achieved over time – without the stress that goes along with trading “size”.
So a 10 point stop or shooting for a 20+ point target doesn’t affect the “mindset” like it does trading full-size contracts. Once a user gets used to the big swings using the Micros then the day to day moves don’t seem as dramatic.
Trading lunch-money for a period of time allows one to get a feel for the ebb and flow of the system performance through different market conditions over time, without the emotional attachment of worrying about serious money.
Then the idea of scaling up slowly over time – and only adding a contract after the prior couple / few weeks have been profitable helps “regulate” things – and the idea is that by the time you scale-up to trading real money, you’ve already grown the account to compensate for the difference in “size” of what you’re trading day to day.
Then, when a drawdown week comes along, it’s just relative and you don’t even flinch. It’s just giving some back – and is usually due to poor market conditions.
The important thing is the hit rate on Target 1 stays close to 75%. We have the system calibrated specifically for that and as long as it maintains that hit rate over the larger series, the system will always work.