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I have traded futures long before I used Tiger Brokers platform. Noticing that Tiger Brokers has placed futures trading as one of its products, I decided to write a short piece of reflection concerning my views on futures trading. Hopefully, readers would have been following my article will think through thoroughly before one embarks on futures trading.

(i) Futures trading is unlike stock investment, which one can take long duration bets and hopefully wait for time to prove one decision is right;

(ii) Futures trading comes with an implicit leveraged bet, which means that one only pays a small amount of margin for a significantly big bet. Certain instruments like forex allows up to 20 to 50x times leverage (I think the 50x was the old days when regulations are not as tight. Not sure about this these days since I havent traded forex trades for a long long time) whereas equity futures typically allow 5x to 20x leverage. One should understand the contract specifications before dabbling on the futures instruments.

(iii) Futures are derivatives that derives their prices from underlying instruments. Its price movement is not as clearcut and macro understanding is often required. Of course, there are those traders who relied solely on technical analysis and charts to dabble onto futures.

(iv) One must have discipline and good handle of emotional control to dabble into futures trading.

(v) Learn to cut loss and put a stop loss. The skill lies in knowing when and where to put in a trade and when and where to put in a stop loss price to protect one's capital.

(vi) Resistance and support levels should not be viewed as definite levels. Never overrisk one bet and know when to close one trade.

(vii) Know your personality well. Not all is suitable for futures trading.

(viii) Most people lose money in futures trading. It would be best to lose money first and know that futures trading is not as easy as what one thinks.

(ix) Sophisticated traders, especially macro traders use futures trading as part of their basket of trade products to magnify their returns. This is a high risk high return trade if one does not know how to control risk.

(x) If used properly, one can use futures trading to hedge one position. However, most novice retail traders do not know how to do futures trading properly. It would be best to read up on such instruments or do virtual trading of such instruments before one dabbles in it. I wouldnt recommend people to go into futures trading given the statistics that usually sees 70 to 80% of the people who dabble in such instruments will lose money.

Just some quick thoughts for my readers who have been following my account closely. My twitter account as follows:-

https://twitter.com/Hopehope_G_hope

Readers can follow my twitter account for macro updates if keen.