Why Professional Traders Trade Futures?

Why Professional Traders Trade Futures?

Like many aspiring traders, I started off my trading journey trading equities daily chart. The mainstream media labels futures as a highly leverage instrument and hence it is riskier to trade than stocks. Because of this, majority of the retailers who have little understanding about futures trading focus their attention only on stock trading. So if futures trading are so risky, then why does the professional trade futures? Surely the professionals themselves are not stupid, they would not trade futures if there weren’t obvious advantages.

From a trader’s point of view, whether it is futures, spot forex or stock trading our role is still to trade it up or down. Whether it is “risky” really depends on the individual trader’s discipline to put stop loss in his/her trading.

For example, let’s say there are an equity trader and a futures trader who both size their trade to risk only USD200 per trade. However, the equity trader decides to take out the stop loss and when the position when beyond negative 200 USD, the equity trader became ignorant and let the positon go deeper into the red. On the other hand, the futures trader cap the risk at 200USD as planned and when the trade went against him, he was disciplined to take the lost at 200USD and nothing more. Therefore, it is only risky if one is not discipline and not the product.

For short to medium term trading, these are some of the advantages futures trading have over stock trading.

If you like to bring your trading to the next level, I humbly invite you to join me at my upcoming live seminar where you will learn how to spot winning trade patterns through in-depth chart analysis and make accurate trade calls that will bring you the highest returns using my self-developed trading strategies. See you soon 😊

To the moon!


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