Futures Trading- Profitable Endeavor or Perilous Adventure?

Futures Trading are one area of investing that can be downright intimidating to even seasoned investors. Littered with wonkish jargon and trading strategies that many stock and mutual fund investors may not be familiar with, it can scare off many investors before they even give it a try. All that said futures trading do have one distinct advantage over trading other asset classes: The potential for big gains that can be accumulated in short time frame. Of course, those big gains depend on your system, strategies and a host of other factors, but we will address those factors later on in this piece.

Choices Aplenty In the World of Futures Trading:

Trading futures is similar to options in that futures markets give traders exposure to a broad swath of asset classes and that is another advantage of futures as an asset class. Futures trading have you covered. Again, there's a place for you in futures trading. It can also give investors exposure to indexes such as the Dow, Nasdaq and S&P 500 along with single-stock futures. And don't fret if bonds are your cup of tea. There is a futures market for select US Treasuries as well. As you can see, futures are far from limiting in terms of choices. Versatility is important in trading and trading futures can give you the versatility your trading returns may need.

Loving Leverage in the World of Futures: 

You have probably heard the word leverage tossed around a lot by financial commentators and pundits in the wake of the financial calamity that enveloped many markets across the globe during 2008. Leverage became a dirty, four-letter word and the mismanagement of leverage was attributed to the downfall of several large financial institutions. In the world of futures, consider leverage both a pro and a con. For the purposes of introducing you to futures trading, consider leverage as the market's way of making your dollars go further. Let's use gold futures to illustrate our point.

Futures Trading: More Pros than Cons:

At the end of the day, futures trading are a great avenue for investors seeking to magnify their returns. That's not up for debate. Yes, futures trading have its risks, but asset class doesn't. Take the time to test your strategies on a demo account and understand how to properly manage leverage. That advice can put you on your way to harnessing the profit power of futures trading.