Micro E-mini Russell Trading Strategy – Backtest And Futures Example
The micro E-mini Russell futures offer cheaper access to the Russell 2000 index futures market than the e-mini version. Russell 2000 is a small-cap market index that is made up of the bottom 2,000 companies in the Russell 3000 index. Created in 1984 by the Frank Russell Company, the index is considered an indicator of the U.S. economy due to its focus on small-cap companies in the U.S. market. If you want to trade this contract, you will need a micro E-mini Russell strategy.
A micro E-mini Russell futures strategy refers to the trading approach you can use to trade the micro E-mini Russell futures profitably. This strategy will often employ the use of technical or fundamental analysis to time your entry into the market with a proper application of risk management and position sizing practices. You can use this strategy to speculate on the Russell 2000 index, hedge your risk exposure in the U.S. equity market, or diversify your investment portfolio.
In this post, we answer some questions about the Micro E-mini Russell futures strategy and we also make a backtest to show you can trade it.
What are Micro E-mini Russell futures?
The micro E-mini Russell futures is a futures contract in which the underlying asset is the Russell 2000 stock index — an index of the smallest 2,000 companies in the Russell 3000 index. A futures contract is an agreement between a buyer and seller to purchase a particular amount of the underlying asset at a future price in the future. Micro E-mini Russell futures are 1/10th the size of the standard E-mini Russell futures.
The micro E-mini Russell futures was launched in May of 2019 as a way of providing a low-cost entry to trading the Russell 200 index for traders with relatively small capital. Because of this, traders can get access to the American equities market without breaking their purses.
What is a Micro E-mini Russell futures strategy?
A micro E-mini Russell futures strategy is the techniques or methodologies that you can apply to trade the Russell 2000 index profitably. The strategy often involves using technical analysis or fundamental analysis to time the market together with proper risk management and position sizing practice.
To trade the micro E-mini Russell futures profitably, you need to have a solid trading strategy that outlines precise entry and exit points, risk management, and position sizing techniques. With the strategy, you can speculate on the direction of the index, diversify your portfolio, or hedge your exposure in the equity market.
Micro E-mini Russell futures strategy backtest
A strategy backtest with trading rules and settings is coming shortly.