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Can You Make a Living Trading E-mini Futures?

| March 8, 2024 | By

Any veteran of the financial markets will likely agree to the common saying, “Active trading is the hardest way to make an easy buck.” You may or may not agree with this sentiment, but it is difficult to argue with the empirical data. In fact, washout rates for new traders of all types are estimated to be upward of 70 percent. This daunting statistic raises a valid question about whether it is wise to attempt trading E-mini futures for a living.

To be sure, sustaining your lifestyle solely from active trading is a serious endeavor. If you don’t have adequate resources, expertise, and proper perspective, things are destined to end poorly. Nonetheless, for those traders who are true market professionals, the rewards far outweigh the risks.

What Constitutes a Living?

The largest mistake that 99 percent of losing traders make is that their goals are not aligned to their resources. Falling short in this area can undermine the validity and effectiveness of even the strongest trading strategy.

For any venture into the marketplace to be successful, it is imperative that available inputs are capable of producing the desired output. In the case of making a living, this means that proceeds from trading must cover all real-world expenses. Depending on your lifestyle, earning enough in the markets to pay the bills can be challenging.

Fortunately for aspiring futures traders, the E-mini lineup of products on the Chicago Mercantile Exchange (CME) opens the door to many opportunities. If you’re interested in trading E-mini futures for a living, then the CME is the best place to start.

Any trades are educational examples only. They do not include commissions and fees.

Earning an Acceptable Return

To illustrate the relationship between resources and goals, assume that Frances the futures trader has monthly expenses totaling $5,000. She decides to target the ever-popular E-mini S&P 500 to generate revenue. Realistically, there are several strategies that will give her a chance of trading E-mini futures for a living:

  • Scalping: Scalping strategies garner profits from executing a high volume of trades on compressed timeframes. Assuming 20 trading days per month, a 30 percent success rate, and a $50/$150 risk versus reward, Frances will need to execute 500 trades (25 per day) to gross $5,000 in profit.
  • Day trading: Day trading involves taking 1-2 trades per day. This typically entails opening a position early in the session and closing it out ahead of daily settlement. Assuming 20 trading days per month, a 40 percent success rate, and a $200/$600 risk versus reward, Frances will need to execute 42 trades (two per day) to gross $5,000 in profit.
  • Swing trading: Swing trading is a multisession strategy, with normal durations ranging from 2-6 days. Overnight margin requirements must be satisfied to swing trade, thus increasing the amount of risk capital needed. Assuming 20 trading days per month, a 60 percent success rate, and a $500/$1500 risk versus reward, Frances will need to execute six trades (1-2 per week) to reach $5,000 in profit.

Not accounting for commissions and slippage, these strategic frameworks show that it is theoretically possible to make a living trading E-mini futures. Given a solid success rate and positive risk versus reward scenario, long-run profitability is attainable.

However, it is important to realize that each type of strategy comes with a set of unique advantages and disadvantages. So, though it may be technically possible to make a living trading E-mini futures from scalping or swing trading the E-mini S&Ps, several considerations must be made. Among them are trade-related efficiencies, margin requirements, and market state. Ultimately, the responsibility for choosing your best course of action falls upon you, the trader.

Trading E-Mini Futures for a Living Is Possible

Being a professional futures trader can be a very rewarding experience, both personally and financially. To learn more about the many opportunities that trading futures offers, schedule your free one-on-one consultation with a member of the StoneX team today.

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