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  • E-mini forex day trading is available on two of the more popular currency pairs. Recently the Chicago Mercantile Exchange has launched e-micro futures contracts for forex trading. These contracts are well suited for day trading.

    Function

    Day trading is the full time occupation of buying and selling securities to make profits from short term price movement. Day traders will buy or sell short securities and hold the position for only a few minutes up to a few hours. At the end of the trading day all positions will be closed out and the day trader's assets will be a cash account.

    Considerations

    E-mini forex products are currency futures traded on the Chicago Mercantile Exchange. Futures are standardized contracts for the delivery of a set amount of currency at a future date. The CME is a regulated exchange in contrast to the many unregulated banks and brokers that offer forex trading.

    Identification

    E-mini forex futures contracts trade on the U.S. Dollar/Euro (USD/EUR) currency pair and the U.S. Dollar/Japanese Yen (USD/JPY) exchange rate. The e-mini USD/EUR contract size is 62,500 euros and the e-mini USD/JPY contract is for 6,250,000 yen with the price of the contract in dollars reflecting the current exchange rate of the currencies.

    Features

    Futures contracts only require a small margin deposit to hold the contract. As of January, 2010 the initial margin amount for the e-mini euro and yen contracts was about $2,000 per contract. Futures traders can decide whether to go long or short, allowing the chance to profit if the currencies move in either direction, assuming the correct direction is chosen.

    Size

    The new e-micro contracts trade against a wide range of currency pairs and have margin requirements of $500 or less. These contracts may be more attractive to the individual trader than the larger e-mini forex contracts.

    Warning

    Futures trading exposes the trader to possible losses significantly larger than the initial deposit. Day trading is a full time occupation and requires extensive knowledge and experience.

    Source:

    CME Group: FX products

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