Is the Futures trading risky?

Discussion in 'Forex' started by Joan Peter, Aug 25, 2009.

  1. I am new to this futures trading, and I heard from my friends, that the commodity exchange is highly volatile and risky. Can any one brief about the risk factor since I am so interested in futures and want to start immediately.
  2. Not necessarily. A big difference between stocks and futures is that you can only get 4:1 leverage with stocks while you can get high (>50:1) leverage with some futures. If leverage is not used, then trading futures is not all that different from trading stocks (ES and SPY for example). It is the leverage, which can both help or hurt you, that makes futures riskier than stocks.
  3. Well, Joan, you're not off to such a good start. This is the forex forum and you are asking about futures. Based on that alone, I would say, yes, futures trading is WAY too risky for you.
  4. Maybe hes talking about trading currency futures.... ??
  5. futures are the riskiest of ALL trading vehicles...with futures you can lose more than is in your account...unlike stocks, options and forex for the most part...futures could put you like $50,000 in hole (-)...
  6. Hi Joan, It is not as risky as your friends suggested. The futures markets are in one way reduces price risk for commodities. The futures market is competitive and complex by nature, but if you can understand the functions clearly, managing your funds is almost easy. Search for some websites, blogs, or books to know more about the trading basics and market terms. Well! I can suggest you to have a look at this blog , since the author is an experienced futures trader and offer valuable advice for traders.
  7. the risk is in how easy it is to overleverage yourself. combine that with an inability to take stops and you will not survive.
  8. If by "start immediately" you mean begin your education, I would agree....please do begin to educate yourself about the financial markets and futures in particular.

    As to actively trading, I would gently suggest that the odds favor your losing whatever money you put into the venture within a short time. Simply put, in the futures "arena" you are in competition with professionals who have devoted years of study to the subject. I would say the odds of success right away are close to zero...

    Your best path is to begin educating yourself by reading the basic texts. Begin with an overview of the industry and then try to determine where your interest lies within the many futures markets.

    If you must have a trading experience right away, use a simulator rather than risk your money. There are several vendors and brokers who can offer that service at no cost to you, and you can get familiar with the software and trade execution platforms in a relaxed manner.

    Avoid fee based courses, chat rooms and advisors until you have some experience.

    Good luck