Many people all over the world are asking themselves the question "why trade futures?". The short answer to this question is that trading futures is a good way to make considerable amounts of money. Unlike other types of investments, learning to trade is not too difficult for beginners.
One of the biggest benefits to this investment type is that traders only need to pay very low commission charges in comparison to other investments. The commission fees charged on futures is only paid when the trader has closed his position. Traders will find that the level of commission they pay will vary depending on the service level of the chosen broker. Some traders will be able to use online brokers that charge as little as $5 per trade. Other traders who use brokers that offer full service may be charged up to $50 a trade. However it is important for traders to note that brokers who are part of a managed trading commission that controls all the trading decisions, may charge fees as high as $200 per trade.
The advantage that draws traders into futures trading is the potential of making high returns in a short amount of time. Not all investments can offer this benefit to traders. For example unlike commodities and futures trading, putting money into a savings bond offers low returns. While the interest rate of a savings account will rise over the years due to inflation, investors will not make as much money as they could with futures and Forex trading. Traders should be aware that investing their money in futures is far more riskier than investing in a savings account or bonds. This is why there is so much potential to make large amounts of money. On the flip side, traders also face the possibility of losing all of the money they invest into the trade.
Lastly another major benefit to trading in futures is that the investment is essentially a paper investment. This means that investors do not have to deal with any physical goods. This saves investors a lot of time and energy in storing and securing goods. An example of a non-paper investment is a piece of jewelry or precious metal. Jewels or metals that have considerable value will need to be kept in a safe or safety deposit box. This will cost investors money in security and insurance . When it comes to futures, the investment is essentially on paper as opposed to physically in possession of the investment.
People who are considering investing in futures should make sure that they are knowledgeable about trading. Those who know what they are doing will wind up making better financial decisions. In an ideal situation traders will practice trading on a demo software provided by their broker. This will allow them to become familiar with how the market works, what are the different types of futures - bonds futures, stock indexes futures, commodities futures and currency futures, and how to profit from the price movements. Those who take the time to do this will not lose money due to making silly mistakes that are common amongst beginners.
Take the first step to futures trading now. The website will explain what are futures and how to profit from it. Learn what the big boys are doing and make money together with them!
Edmund Peh is an expert in trading and runs the very successful and popular website about futures for beginners [ www.futures-explained.com ]. He has helped thousands of people to get started in trading futures. Visit his site right now for more information on futures.