How to trade the mini/micro contracts!

I've received the following email from one of our Traders Notebook subscriber regarding the new Outright Futures trading ideas. I think it is VERY informative!

Thank you Tom!!!

"This new program sounds very interesting.  Here are a few thoughts about trading with the mini/micro contracts.  I would advise everyone to put up a chart of the full size contract side by side with one of the mini contract and make a few comparisons.  Because of the different tick sizes often found in the minis and the difference in liquidity, the highs and lows are very rarely an exact match.  It goes without saying, that if you are trading a mini contract, the entry point should be derived from the mini contract and not the full size, but sometimes people need to be reminded of this.  The first thing I like to do when considering a trade in the minis, is check for consistency.  I first look for any recent TLOC trades (or potential trades) and compare them, win or lose, it doesn’t matter, I just want to see if the entries trigger the same on both charts or if the mini contract has a tendency to get you into trades that never trigger on the full size contract.  If there is little to no consistency, I pass on the trade or look for a different means to trade it.  If the chart passes the first test, I then check the tick difference between the past few days’ highs and lows and the tick difference between the past few relative highs/lows and get an average value.  I use this average as the distance between my stop and limit on the entry order.  This helps keep the market from jumping over the order without giving up more slip then necessary for the given market.  These methods also apply to forex, except for the spacing of the stop limit; there is enough liquidity in the forex market to place them at the same level.  I hope others will find these techniques useful, as I paid the market quite a bit of money to teach me."