The world of futures trading may seem exciting and full of opportunities, but for beginners, it can also be a confusing maze. Despite the explanatory videos on the networks, there are several aspects that are often overlooked and that can hinder the experience of novice traders. Here is an excerpt from my own experience after 2 months of diving into the pool without knowing how to swim.
The Promise of Profits and the Hidden Risks
1. Leverage: The Double-Edged Sword
Leverage is a key feature of futures. It allows traders to control large positions with a relatively small investment. However, this also means that losses can be just as large. For a beginner, leverage can be like walking a tightrope without a safety net.
2. Extreme Volatility
Futures markets are notoriously volatile. Prices can change rapidly due to unexpected events, economic news, or simply mass psychology. For a beginner, this volatility can be overwhelming and difficult to anticipate.
3. Uninterrupted schedules
Unlike stocks, futures trade 24 hours a day. This means that traders must be alert even at night. For someone new to trading, staying awake and focused can be exhausting.
The Importance of Education and Practice
1. Not Everything Is in the Videos
Explanatory videos are helpful, but they don't always cover all aspects. The basics may seem simple, but the actual application in a market environment is different. Novice traders should complement videos with readings, courses, and most importantly, practice on demo accounts.
About the huge amount of courses that are initially presented as free and that in the end are only springboards to super hyper advanced courses that you can only access by paying, the strange thing about these gurus is that they appear to earn thousands of dollars in a simple movement, but they charge you for their training, doesn't that seem strange to you? I mean, they charge for videos that they monetize on YouTube, but for what? If that should be a simple thing compared to what they earn by trading, can someone please explain it to me?
2. The Learning Curve
Futures trading takes time to master. Beginners often face a steep learning curve. It is important to be patient and not expect immediate profits. Constant practice and adaptation are key.
Conclusion
Futures trading is not for the faint of heart. If you are a beginner, take the time to educate yourself, practice, and understand the risks. Don't be swayed by the promise of quick profits. Ultimately, patience and perseverance are your best allies in this exciting yet challenging world.
