Answers:
1. The Dow Indicator is updated by 3:55pm. When is a good time to enter a position?
When the trade signal is posted on our web site you can execute the suggested trade immediately. It is best to enter before the market closes rather than the next day. Over a period of time, entering a few minutes early or a few minutes late will balance out (some times getting in at 3:55pm will result in a better entry price, and at other times entering closer to the closing price will result in a better entry price).
If there is a new trading signal to enter, then enter the market. If it is a "Stay Long" or "Stay Short" signal however, then don't do anything... just 'hold' your existing position. If it is an "Exit" signal, then exit your current position and be all 'cash'. Each day, therefore, you only need to check your screen around 3:55 pm New York time. (And again at 9:00 pm for any update to the update.) If we are "Long" and we get a signal to go “Short”, then exit the"Long" position and go “Short”. For example, assume that we are "Long" 2 contracts of the E-mini Dow Futures; if you then wanted to "Short" 2 contracts you would put an order to sell 4 contracts of the e-mini Dow.
2. If I cannot check the price at 3:55pm, can I enter the following morning or late at night?
The e-mini futures markets have an 'after hours' market which you can trade. Click Here for a detailed explanation of how to execute trades. For other markets including also the e-mini's, you may enter or exit the market in the evening or possibly even the next day. However, our research shows that the best time to enter or exit the market is right before the close.
3. Which is the best instrument to trade the Dow using the Dow Indicator? E-mini futures, the ETF Diamonds and Spiders, or options?
We do not ever recommend any specific instrument, as the answer to this question is very much an individual preference. What we do advise is to learn about and paper-trade/test the instrument you choose. There is much information available on these instruments. All of them provide the ability to profit from the Dow. We mainly trade the Dow e-mini and S&P e-mini.
4. If I want to trade the Dow e-mini future, what is the margin and capital requirement?
The value of each point is $5 per contract. The margin requirement is about 5% of the value of the contract. If the Dow is trading at 10,000, then the value of the contract is $50,000 (10,000 x $5 per point); therefore, the margin will be about $2,500. This does change from time to time, and is decided by each brokerage firm and the exchange. You should check with individual brokers about their 'margin requirement' for trading.
The MINIMUM you should have in your account to trade a Dow or S&P e-mini Futures contract for proper money management and trading psychology is $15,000. This is also the minimum that Mirus requires to be in their Trade Assist program. An average loss with the Dow Indicator system is approx. $1,500 trading 1 contract. The maximum you should risk per trade as a percentage of your total account balance is 10%. Preferably less. We recommend a starting account size of $15,000 for both the Dow and S&P e-mini. As your account grows, you can also compound the number of contracts you trade by using the information on the 'Money Management' page if you desire. This information has been optimized for the Dow Indicator strategy. The strategy though has shown to be plenty profitable in the past without compounding contracts.
5. Do you use a stop loss and, if so, what is a good stop loss level for the Dow?
We have carried out extensive research on each of our trades to decipher a 'perfect' stop-loss point. Our stop loss ranges from 100 - 400 points, and based upon market behavior, we might tighten the stop. Once a stop is placed, we never increase the risk; we might only decrease the risk. The stop loss system is fully programmed into our computer, so you do not need to do any calculations or second-guessing. Stop loss orders should be placed as a GTC (Good Until Cancelled) order. That way, if the market moves substantially during the day or night (futures), the risk should be limited to the stop loss. There are times when a loss can be greater due to a gap at the opening or a fast moving market.
6. Is my subscription automatically renewed?
Subscribers prior to June 4th, 2008, their subscription is NOT automatically renewed. For new subscribers after June 4th, 2008, as well as when June 4th and before subscribers manually go in and renew their subscription to our new 4 mos. subscription at the end of their annual term, your subscription WILL automatically renew unless you go in and cancel your recurring order. You will be sent a reminder e-mail with your renewal date approx. 1 week prior to your subscription renewing. Not all e-mails get through. Please make a note when you sign up of when your renewal will happen.
7. Do you yourselves trade the Dow?
Yes - this is the only way we can experience first hand how our system performs, and it also allows us to further develop ease of use. We trade the Dow e-mini and S&P futures and use the exact signals and system here at the site you will be using.
8. I am new to this - can you explain how 'shorting' works?
Shorting is the opposite of buying. When you buy something and the price goes up, you profit. Inversely, if you sell first and then buy it back when the price drops, you profit. Shorting is simply a means of profiting from a falling market. You are literally selling something you don't really own, but you are 'committing' to buy it back later. This commitment is a form of value, because it allows a 'trade' to occur. Imagine a world where there were no 'sellers' and only 'buyers' - it would make it near impossible to create an orderly, balanced market. Obviously if you sell something first, and if the price goes up, you are still committed to buy it back at a loss, thus allowing the person who 'bought' to make a profit. For every buyer there is a seller, and when you ‘short’ you are the seller.
