Theres no doubt that futures trading is inherently a risky business. Anyone who tells you it is 100% risk free is either ignorant or trying to sell you something. The truth is futures trading is a gamble. Theres no telling when you are going to win or when you are going to lose. The best strategy is to play this game based on the cards you have and hope for the best.
Futures trading does have huge rewards if you win and thats probably the reason many people are attracted to it. However the chances of you losing big is just as great if not greater particularly if you are new to futures trading.
I outline the 4 main risks when trading in futures. You might want to read further before deciding futures trading is suitable for you.
1. Speculative Business
Futures Trading is speculative in nature. No matter what the experts tell you or predict, it is not always 100% accurate. Take it with a pitch of salt. The best investment strategy is not to put all your eggs in one basket, divesting your investment among different financial instruments.
2. Financial Backing
Futures Trading requires a large capital outlay at the beginning which is...
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