Why are Futures and Forex more popular than stocks for short-term trading?

Based on interaction with other traders, it seems that futures and forex are more popular than stocks for short-term trading. I am puzzled given that there are thousands of stocks but much fewer futures and currencies. Wouldn't there be fewer trading opportunities in futures and currencies as a result?

Why are futures and forex more attractive?

 

L-E-V-E-R-A-G-E my boy...leverage!

 

Is there a tendency among short-term traders to prefer leverage? Why the preference for leverage given the risk of financial ruin is much higher?

 

If risk/reward ratio is good, the risk for financial ruin is not higher.

 

Because of the enticement of higher potential returns.

 

Really? So if someone offers you a bet that has a probability of winning 9 out of 10 times but the requirement is that you have to put up 10 million USD. You then in turn borrow 10 million from the bank. You do not call that a favorable risk/reward ratio with a sky high risk of ruin?

 

The risk of ruin does not change with the amount of money you use. The risk/reward does not depend from that. Only risk and reward are able to influence the ratio.
And on top of that only idiots will invest amounts that exceed their financial capacity. In futures you can decide how much money you risk, so your example is not from the real world.
Ruin is related to the amount of money you have, because ruin means you lose all the money you have. Warren Buffet can take a 10 mio bet and lose it completely without any problem.

Use the same example for trading stocks without leverage. Will you run to the bank and asks 10 million?

What a stupid example.

I trade futures for years, so I accepted the risk/reward and did never regret it. Trading stocks without leverage would never have brought me the amount of money I have now. That's the reality, and that's the only thing that counts.

 

You see the same human behaviour in casino, right?

The situation is getting worst for the last few years with the introduction of Future and Forex (especially those products from bucketshop). Someone just distorted the public view from investment/institution trading with gambling, it is matter of time before the government awake and do something.

 

It would be foolish to put 100% of your capital at risk on any one trade.

 

Not necessarily. If you take it for face value, in simplest terms...then yes.
Trading is not an all-or-nothing gambling game...like blackjack or roulette -- you can get out if the conditions are not there.
But trading is, or can be, a very complex/dynamic set of variables in play.

...it all comes back to who you are . and your goals. and risk tolerance levels.