Futures trading is a risky business and anybody who will tell you otherwise, that it is 100% risk-free, is daft or is trying to sell you something. The fact of the matter is, futures trading is a financial gamble. And, like a gamble, you will never know when you will win and when you will lose. The key is simply to play the game based on the cards you are dealt with and hope for the best. A lot of traders are lured into futures trading because of the great rewards it can potentially bring.
However, you must keep in mind the rule of opposites, in that with great rewards, also come great downfalls. Futures trading, because you’re gambling with something that is yet to happen, is nowhere near accurate. There are basically four main risks associated with futures trading. We will discuss each of them in brief here. If you want to know more, it is suggested that you consult an expert on the matter, because how the futures trading works and pitfalls involved cannot be simply summed up in a short article.