The bullish response to the news may signal China’s embrace of a full of futures markets.

News breaks from Shanghai Monday that: On the Friday’s breaking news from Shanghai of long-awaited Chinese stock index futures, Chinese blue chip shares hit their highest numbers in over 8 weeks.

The Yuan is up to 6.8263 against the U.S. dollar, which is higher than it was at Friday’s close at 6.8273.

Shanghai Composite Index moved over 2 percent to close at 3,124.

The Shenzhen Composite Index went up to 1,201 1 percent increase.

Analysts say that 3,100 is the current psychological pivot for the market. Having higher trading volume reinforces the sentiment.

Ping An, Securities analyst Li Xianming of Shenzhen said, “With the introduction of the stock futures, investors refocused on blue chip shares, as their previous performance has lagged behind the market.”

Chinese auto makers, lenders, and brokerages were among the gainers.

Better-than-expected annual earnings last week were reported by China’s three largest banks.

Bank of China Ltd. at 4.36 Yuan rose 3.1% Industrial & Commercial Bank of China Ltd. at 5.02 Yuan rose 2.5% China Construction Bank Ltd. at 5.71 Yuan rose 2.3%

The two largest brokerages rose as well. Citic Securities Co. rose 3.5 percent to 28.36 Yuan, Haitong Securities Co. gained of 2.8 percent to 17.07 Yuan.

The auto makers win as well. Zhejiang Geely Holding Group signed a deal Sunday to buy Ford Motor Co.’s Volvo Cars. SAIC Motor Co., The local partner of General Motors Co. Volkswagen AG (VGC), jumped 3.7 percent to 20.45 Yuan, Ford Motor Company partner, Chongqing Changan Automobile Co. rose 1.2 percent at 6.97 Yuan.

With the announcement and China’s Blue Chips increasing on it looks like capitalist principals are taking deeper root. It is highly unlikely that the surge in the sectors of auto manufacture, lending, and brokerages is mere coincidence.

James Horne has been a financial analyst for over 10 years. He is CEO of Pure Reason LLC, the home of Shadowtraders. His voice has been heard by hundreds of students learning to trade the Futures Market with Shadowtraders online day trading strategies. Before you buy any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen

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My name is Barbara Cohen and I am the CIO of Shadowtraders.com. But more than that…I am a Futures Trader, a Futures day-trader. When I first began trading over 10 years ago, at the time I was a computer programmer and I wrote software for automated black boxes. My clients were avid professional Futures traders and this is where I learned about trading Futures. Writing software gave me the understanding of why so many professional day traders, no longer trade the stock market. At Shadowtraders, we write Futures Market software with built in Futures trading strategies, offer an online self paced Futures trading course, deliver Futures Market Seminars, and offer a daily Chatroom where we watch the Futures Market real time. We have even delivered seminars inside the Chicago Mercantile Exchange (CME) where they trade Futures.

For those of you unfamiliar with trading Futures, we’ll start at the beginning. For those of you well versed in trading Futures, hang tight … you may just hear something new. The first question I get asked over and over is, “So what’s the Futures Market and why would I want to trade it?”

Wikipedia states that “A Futures Market is a financial exchange where people can trade Futures Contracts.” And a Futures Contract is “a legally binding agreement to buy specified quantities of commodities or financial instruments at a specified price with delivery set at a specified time in the future.”

Let’s look at the word “Contract”. That is the most critical differentiation between the Stock Market and the Futures. The Stock Market trades shares but the Futures Market trades contracts. When trading Futures, you are not actually purchasing a “small part of a company”. A Futures Contract is an agreement between a buyer and seller to trade a commodity, a currency, or an equity financial instrument, such as bushels of wheat or corn.

It is easy to understand how commodities Futures Contracts work. An airline, for example, contracts for 100,000 gallons of fuel for their planes at a certain price today, but does not take delivery until sometime next year.

Southwest Airlines was able to survive well when crude oil was trading at $140/barrel, while the other airlines were having difficulty. They purchased crude oil Futures Contracts with the oil companies years earlier when the oil was cheap, but delayed delivery until 2007-2008. When the price of oil is cheap again, they will arrange for new Futures Contracts to be delivered in future years.

Making Futures Contracts for crude oil is not trading, so you say.

In every Futures Contract transaction, there is a degree of risk. Futures Contracts are all about leveraging risk against the value of the underlying asset you want to buy.

Southwest accepted risk. They knew that the price of crude oil could potentially fall below the price they were paying. In this case they would have paid over and above what they would have needed to). Yet Southwest was able to reduce their risk because they expected oil to go higher than their contract price. Southwest was right and the leverage worked.

For the oil companies, they reduced the risk, believing that the price of oil would fall below the contract price they negotiated with Southwest. But they acquired risk because the price of oil could rise higher than the contract (thus losing additional revenue they could have earned). In this case, the leverage was not as good as it could have been.

Hey, “I am not Southwest Airlines. I am just an individual investor. I don’t want 100,000 gallons of oil. How do I benefit from trading Futures?”

The Chicago Mercantile Exchange (CME), where most Futures contracts are traded, understands that individual investors want to trade Futures just like major corporations; individual traders want to leverage their risk. They also understand that small investors are not going to risk millions of dollars on gallons of gas contracts or bushels of wheat. So the CME decided to create a trading environment that would entice individual investors to trade Futures.

Remember, as an individual investor, you have so many exchanges available to you for trading. You can trade large cap stocks on the NYSE, tech stocks on the NASDAQ, ETFs on the AMEX, and options on the CBOT. So in order to entice individual traders to trade Futures, the CME had to create an exchange that made other exchanges pale in comparison.

The CME developed “E-mini Futures Contracts” specifically tailored to professional investors. The “e” in E-mini meant they could be traded electronically. The CME developed a trading platform for your desktop where your trades can go straight to the CME. The “mini” means that the contract is a smaller version of the Futures contract that the larger institutions now trade.

The most heavily traded CME is the S&P 500 E-mini Futures Contract. This contract trades upwards of 3million contracts daily. This E-mini is valued upon the underlying S&P 500 index, the index that represents the top 500 stocks in the NYSE. The S&P 500 index is a price-weighted index. This means that the larger companies have more “weight” or “pull” than the smaller companies and are able to move the value of the index higher or lower. However…you cannot trade an index.

But you believed that Futures Contracts were limited to commodities like wheat, rice, crude, soy.

Imagine for a moment that you could trade all the top 500 stocks simultaneously. Now that would leverage risk. Should one or two stocks not do well that afternoon, you would still have 498 other stocks to trade. You wouldn’t have to pick any specific stock, nor would you have to spend hours and hours doing research on stocks either. Why? Because you would be trading all of them. Mind you, it would cost a small fortune to be able to trade 500 stocks at one time. Well, buying and selling S&P 500 E-mini Futures Contracts is just like trading all 500 stocks at the same time, for a fraction of the cost.

So how did the CME entice traders to trade E-mini’s? Check out the advantages of trading E-mini Futures Contracts. You’ll quickly see why many professional day traders gave up trading anywhere but the CME …

S&P 500 E-mini contracts are heavily traded with extreme liquidity. That means lots of volume and for you…lots of action. Lots of volume means you’ll be filled quickly often in as little as 1 second. When the S&P 500 was first traded in 1997, the average trading volume was barely 7,000 contracts / day. Now, the average is more like 2 million contracts daily with upwards of 3million not unheard of.

E-minis are electronically traded. There are no Market Makers, unlike the NYSE, who might refuse to fill your trade. The CME book is strictly first in first out (FIFO), helping make trading the CME a level playing field for all traders, institutions and individuals alike, even if you are only trading 1 contract.

Commissions for E-mini Futures is based upon “Round Trip” instead of in-and-out.

The difference between the Bid price (the highest price that a buyer is willing to pay for a contract) and the Ask price (the lowest price that a seller is willing to sell a contract for) is just one “Tick” on the CME.

(The minimum price movement between the Bid and Ask is known as a Tick. The S&P 500 trades in 25 cent increments. 1 Tick = 25 cents. 4 ticks = 1 point. If you gain 1 tick in your trade, the reward is $12.50, with 4 ticks = $50.)

A 1 tick — Bid / Ask spread can be very different than the Stock Market. With Market Makers on the NYSE, often the Bid/Ask spread can be more than 1 penny, especially if the Market Maker makes his living on the spread alone.

With trading E-mini Futures, you’ll only need to watch 1 chart, 1 instrument, the same chart, day in and day out. Could you become a truly successful trader if you monitored the same chart every day?

Stock traders usually have to watch several stocks at the same time. Watching multiple charts means flipping the charts back and forth for in case you miss something.

There is no need to do nightly research. You’re trading all 500 stocks at the same time. You won’t be researching this or that stock, worrying about whisper numbers, quarterly reporting, pre-announcements, or accounting minefields.

Traders who trade options must handle 4 conditions to be successful: underlying price, strike price, volatility, and time decay. These traders might be right but lose on their trade because they were wrong about time, the option expiring worthless before they could profit. Futures traders need only worry about 2 conditions: an advancing or a declining market. Time decay is not something Futures traders need have any concern with.

Margins are very attractive for Futures traders. 1 S&P 500 E-mini contract can be traded for as little as $400 on margin. To trade stocks, minimumly you would need to buy a 100 share lot. The average stock is $25/share, or $2500 just to get in the door.

Here’s a huge difference. The SEC defines a day trade as a transaction that opened and closed within the same trading day. A “pattern day trader” is anyone who executes 4 or more day trades within a 5 day period. To day trade, you must have in your brokerage account at least $25,000 (or your account will be frozen for 90 days if you are caught day trading).

Day trading Futures does not have such rules. Your brokerage account requires much less capital. You can open your Futures brokerage account with just $2,500. This enables even small investors to trade Futures.

You can trade the E-mini futures long (where you expect the contracts to appreciate) but you can also trade the futures short (where you expect the contracts to depreciate). In the past, bans have been placed on short selling financial stocks, on naked short selling the 1,000 top stocks, on short selling stocks that are less than $5, etc. No bans are placed on short selling Futures contracts.

No restrictions on short selling e-mini Futures Contracts? Because Futures are contracts, not shares of a particular company. As traders, taking full advantage of the Market’s volatility is essential. Not being able to short means that half of trading is lost. Always trading long means a long wait for the Market to swing up in order to enter a trade. Those days when the Market is down 200 or more points……that may be a long wait.

Trading short is especially important with the current Bear Market. There are sharp up and down moves in the S&P, DOW, and NASDAQ, perhaps more so than ever before, giving traders ample opportunities throughout the day to profit. Now is not the time to be stopped by Short selling restrictions.

When Futures trading with an IRA or 401k account, you won’t need to wait for the trade to settle 3 or 4 days before you can use that same money for the next trade. One second after you exit your trade, that same money is now available for another trade. When trading stocks, exit a trade and you may wait as long as 3 days for your money to settle prior to using that money to trade with again.

Tax rules originally intended for commodity trades also apply to E-mini Futures traders. There is a 60/40 split on taxes: 60% of your trade is long term (15% tax bracket) and 40% of your trade is short term (28% tax bracket). Let’s compare to trading stocks. Hold a stock for under 1 year, it is a short term trade. Only if the stock is held for over a year does the trade qualify for long term capital gains. With Futures, all your trading is divided by the 60/40 rule, even when your average trade is 1 minute long.

At year end, you’ll receive a 1099-B statement from your Futures broker, with only 1 figure, a net number of all your trading, not each individual trade. If you profited by $50,000, the 1099-b only shows $50,000. You can now claim $30,000 as long term capital gains and $20,000 as short term, the 60/40 split.

Doing your taxes is much easier. Since your broker gives you the net entry, you will make just 1 entry on your tax return. If you trade stocks, you are required to identify every trade you made. If you are a day trader and trade multiple stocks, it can take hours to enter all those transactions. With Futures trading, you are done in a jiffy.

You’ll find that trading Futures is nearly a 24 hour a day activity, 5 1/2 days a week. Saturday is the only day “bad” trading day for Futures — you can’t trade at all. Many stocks can’t trade pre-Market, and those that do tend to be traded very lightly. Conversely, the S&P 500 E-mini is traded world-wide and depending upon the time of day, quite heavy even pre-Market. At 2:00am EST, the Japanese begin trading the S&P 500 E-mini. At 4:00am EST, the Europeans start trading. Should you have insomnia that get you up at night, E-mini trading is definitely something for you to look into.

There is only 1 exchange/1 book for E-mini Futures….the CME. That is unlike stocks that can trade on different exchanges and have different Bid/Ask prices on each exchange. For E-mini Futures contracts, there is just one price – the CME price. Large cap stocks may trade on multiple exchanges, each exchange posting a different price.

Fills are guaranteed. If the E-mini price goes through your offer, you get filled…no questions asked. This can be a major problem for individual Forex traders. You could be in a trade waiting to exit with an offer to sell. The Forex contract goes right by your price but you do not get filled. Read the fine print in your Forex Brokerage contract that says they do not guarantee fills.

The CME Clearing House is the guarantor for Futures trades to each of its clearing members, ensuring trade integrity.

Futures Contractsdo not do expire worthless, with your money rolling to the new contract. That is very different than Options that expire worthless.

Let’s say you are an individual investor. You have been monitoring the Stock Market and now you’re bullish. You want to be part of the action because you see the Market is going up.

You only have $5,000 to invest. You’ve traded shares of stocks before and you know that with just $5,000, you would be limited to trading just one or two stocks and not daytrading. You’re looking at a lot of nightly research to identify which stock to trade.

Buying a mutual fund so you could be part of more than one or two stock moves would work. Unfortunately, given upfront load fees, your $5000 investment wouldn’t go far. Instead you can trade S&P 500 E-mini Futures Contracts. With $5,000, this could give you 5 contracts to trade ($2,000 – Note — never put all the money in your portfolio in 1 trade). Make 4 ticks a day, that will give you about $170-180/day after commissions, or $3,500 per month, $42,000 for the year. After adjusting for losses, you net $30,000….on your $2,000 investment! That equates to a gain of 1700% annually. Put the $5,000 in the bank and earn 3%, you’d make $150/year. In one day you would have gotten more than the amount the bank would give you in interest for the entire year.

The S&P 500 E-mini is not the only future you can trade once you figure out how to trade Futures. The CME’s trading platform is called Globex and there are literally dozens of Futures Contracts that can be traded on Globex now. You can trade commodities, currency futures, treasury bonds. You’ll find Futures Contracts for all of those. There are E-mini’s for the DOW, the NASDAQ, and the Midcaps.

We’ve just touched upon trading Futures Contracts…there is so much more information to be covered. This is just an introduction.

Before buying any trading education online, make sure you attend Shadowtraders’ excellent free Webinar on trading the Futures Market with Self Paced Futures Trading Course, and Futures Trading Strategies

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To understand the significance of trading with pivots, understand first of all, that the market is controlled. Perhaps best to say that the Market is completely controlled. If the market were not entirely controlled, millions of shares of stock and millions of Futures contracts could not change hands every day so reliably.

You don’t believe that the market is controlled? Let’s see an example of how control works. At the end of May 2009, Treasury Secretary Tim Geithner went to China and met with Chinese government officials. The Chinese handed Geithner a kind of warning, the conversation most likely went like this…their telling him that they have invested in the U.S. stock market and in Treasury bonds. They are willing to sell their holdings if the stock market does not rise soon.

Geithner realizes that Chinese withdrawal from the Market could crash the U.S. economy, an economy only being held together with rubber bands.

Geithner comes back to the US and figures out what he and his Treasury friends can do to fix the problem. Geithner’s meeting with the Chinese officials took place at the END of May. Right after he came back, the Dow appreciates to 8,800 from 8,200 in 2 weeks, a 600-point run up. Note…the DOW that had not moved up for over two months, remaining around 8,000. How could the DOW move up 600 points in just 2 weeks given that it hadn’t moved in over 2 months? Between the months of July and August, the market went up almost 1,000 points. Strange…examine an old Dow chart for the past five years. You’ll realize that May through August are normally thought to be what has come to be known as the summer doldrums. So explain how the DOW could go up over 1,000 points in just over one month? Now that is control.

The point of the story? How does that help you to become a 12-minute trader? Simple. The point is the market is controlled. The market’s “insiders” know where the market is going and how fast it will get there. They follow specific trading rules, one of which is pivots. Here’s a trick to help you become a 12-minute trader: Just learn the insider rules. Buy when they buy and sell when they sell. Be the market’s shadow. Follow the markets’ rules.

What are the pivots used by movers and shakers in a controlled market? Pivots are support and resistance price levels that allow the movers and shakers to control daily highs and lows during the trading day. There are a total of 17 Futures trading pivots — eight intraday (occurring during 1 trading day) and nine inter-day (occurring over more than 1 trading day). Futures Market movers and shakers use Futures Pivots and stock market movers and shakers use Stock Market pivots. To be a dependable 12-minute trader, pivots need to appear on your technical analysis charts. Without pivots it is difficult to trade because you won’t know where the market may reach for highs and lows.

Want to learn more about becoming a 12-minute trader? Attend a Monday night webinar on trading Futures sponsored by http://www.shadowtrader.com. You will be able to see the pivots in action on the current day’s chart. Shadowtraders always shows the current day, not some chart from weeks or months earlier.

Before you buy another trading seminar, make sure you attend one of Barbara Cohen’s excellent free Monday night Webinars

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Learn how to trade the eminis with David Marsh’s The Tick Trader®, to earn 1 point  day trading the S&P 500 and Dow E mini Futures Markets.

Marsh’s company, E-mini Trading Strategies offers a  30 Day Double-Your-Money-Back-Guarantee which states The Tick Trader Method will achieve a minimum of 1 point a day.

If you are or haven been interested in day trading and the possibility of trading for a living, take the time to research this course. David Marsh is always availabe to speak with potential students, so you can ask as many questions as you like.

Visit his website and read everything especially his daily blog in which he recaps every single trading day. You will also gain insight into the type of person he is.

His emini trading strategies are not difficult to learn.Day trading is not for everybody and you need to have the discipline to follow the rules. The eminis can be traded from home or anywhere that you have a computer and high speed internet connection.

If you have a basic understanding of the futures markets, you can learn to trade this method in less than a single day.

You should have a basic understanding of charts, technical indicators, and order placement. Basically, you should have a decent knowledge of the markets before taking the course.

He has a Beginner’s Pimer for those without experience.

The system’s goal is to make a one point profit each day. The goal is to trade for daily income.This is a consistent and conservative approach to earn daily income.

It trades the same exact way each and every day, and it is usually done for the day early in the morning. The rest of the time is yours to do as you please.

Most people work 40 or more hours at a job or business and have very little time for themselves and family. It simply does not have to be that way

It is possible to spend 30 to 90 minutes a day trading the e-mini markets to earn your living. Day trading is a great way of life.

Marsh’s training offers you this opportunity.

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When the economy started to decrease, the stock marked decreased as well which caused my portfolio to collapse. I remained awake for long that night looking several times at the numbers convinced  that I have been robbed of my money But the truth was that I had simply been caught off guard and I had paid dearly for my ignorance. Yes, I was ignorant, like most part time investors.

However, it is not completely our faults alone. I was taken in, just like millions of other Americans, of a “surefire method” to make money by the hucksters, phony experts and snake oil salesmen who make their claims on cable tv. And since easy money is better than any other kind, I went along with the plan. I took the advice of these self proclaimed experts and tried investing in hot stocks, but it did not help me very much in making a balanced portfolio.

Then when the market collapsed, my portfolio went down like the Titanic. My wife was horribly mad when I lost half of the money I had invested. As a matter of fact, she was incredibly furious. We had several heated arguments where I tried to defend my actions, even though I was clearly in the wrong. My concern was for money problems causing a rift with my wife. You see, the money in our portfolio was for our children’s college fund and we had both contributed to it.

I had no intention of investing in another stock ever again, by that point. This is prior to a colleague talking to me about buying a day trading robot. While the name sounded strange, I listened closely. {I was still terribly embarrassed by my previous investing failures and I was hoping to redeem myself in the eyes of my wife.|I was still feeling burned by my prior failures and did not need to further embarass myself.}

“But I don’t want any get rich quick schemes,” I told my friend.

He assured me that a day trading robot was a proven method that had made savvy investors tens of millions of dollars over the past few years. I asked him to go on and he told me that the robot was really just software that helped competent investors locate bargains and deals in the market.

“Day trading,” he said, “can be risky, and even the best of the best need help to avoid risk.”He explained that day trading didn’t bring the big bucks in one day. Rather, it was about making small profits dozens of times a day that added up to a solid, steady supplemental paycheck. And that, he assured me, was what a day trading robot could do for me.

Day trading robot software takes the emotion out of trading. Often, both new and experienced day traders get too invested emotionally in a stock, and can’t admit when they are wrong. Consequently, they hang on to it for far too long and end up losing money. But the robot software does little more than recommend stocks that are trading for discounts to the market and tells you when to move in an out of them.

A lengthy discussion with my friend made me lay my hand on day trading robot I purchased one online and started out slowly. And after a few missteps, I gradually started to wrack up daily profits. In less than a month our portfolio is up nearly ten percent and the wife no longer makes me camp out on the couch. I owe it all to my day trading robot.

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I thought my brother had lost his mind when he decided to quit his job and become a full-time day trader. Gerald is well known for always approaching things carefully and never doing anything in a reckless manner. He began working out of his own home office, quitting his job at the bank in less than a week. I was speechless towards my brother. My brother always was my role model, so I couldn’t point out his faults.

But when I thought of my three little nieces, I decided I had to step and ask some questions. One weekend when I got to his home I asked him what was up. Why, I asked, had he thrown away a good job with a fine salary and great benefits? Gerald simply smiled and responded in his usual cocksure way that he knew what he was doing. At that point I nearly lost it. I told my brother I thought he was selfish and that he had to think about other people for a change. I thought twice as soon as I spoke those words, however my brother only smiled and agreed with me.

{Though I had almost no interest in the stock market, Gerald pulled me aside later that evening and insisted on explaining to me why he had decided to become a day trader.} To me it was all Greek. I wasn’t really interested in day trading or the market. But my brother told me it wasn’t all black magic. He told me that there is a predictable rhyme to his reasoning.

I listened to his spiel. Day traders that were successful, he said, usually only watched one or two stocks at a time unless they use a day trading robot. It could sometimes take watching a stock for several months before deciding if it was worth it for them to trade it. In the end, it all came down to patterns. My brother said that there were patterns that each stock moved in on a daily basis. Though you couldn’t exactly set your watch by these patterns, they gave brokers a good hint about where the price of a stock was likely to go.

And this was how my brother made his fortune.  The way he made his money was simple. Instead of buying big, he bought small and watched his profit grow slowly over time. It was not uncommon, he said, for him to trade the same stock dozen of times a day.  In the end, a successful day trade was all about short term results and something that could be repeated several times a day.

This got me interested in learning how to day trade as well.I am really lucky my brother is patient and a good teacher, as I now have a mentor to teach me what I need to know about day trading.I do not expect to get to be as good as my brother is at day trading, but I think it can provide me with some extra income.Iam really glad I overcame my fears and learned how to trade the stock market from my brother.

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