Should You Trade In Futures With A Small Account?

Should You Trade In Futures With A Small Account?

When you first start out with futures trading, you will most likely begin your career in this field with a demo account. In many instances, you might not even be trading with real money, and so when you do finally make the leap, you might find that the game has changed, especially since your emotions will most likely end up doing many of the trades. The biggest problem with making the leap is that after a few fails, you might believe you don’t have a future in this industry, and this could be a big mistake. Your other option is to start trading with a small account, since there isn’t a lot of risk involved in this type of account, but this means you should take the time to find out as much as you can about it.

photodune-1438556-stocks-xsDecrease Your Risk

As you go about increasing your knowledge of trading in general, you will most likely come to realize just how many mistakes you have made along the way, and this feeling won’t disappear with time. You will keep getting better at what you do, and if you commit yourself to improving your skills, you’ll continue looking back on your mistakes until you have just about mastered this trade (which is rare). For this reason, the experts at E Mini Mind say;

There are many “light bulb moments” along the way, but limiting the mistakes when you’re trading a small account is crucial if you want to prevent blowing up your account.

Starting out small is a great way to prevent yourself from getting in way over your head as you first start to venture out into this industry. Remember, every mistake that you make will cost you money, so it is up to you to make sure that you are prepared for this and that you can move past your learning stage.

Small Investments

If you are itching to get into this market, but you feel that you have to invest more money than you have, you might be glad to know that futures trading requires a much smaller investment than something such as stock day trading. As the Trading Academy explains;

The Futures market allows you to open an account for as little as $5,000, and best of all, you do not have to maintain that amount.

These experts state that if you have enough in your cash to cover the costs of the trade, you can get away with a balance of $700. This isn’t something you’ll want to do on a regular basis, however, since you might find that it restricts your movement within this industry.

The Problem With Small Accounts

While it might be very appealing to open up a small account (and indeed, this is one of the most common options among traders), you need to remember that this also leaves very little room for error. When you lose big on a small account, you might find that you don’t have enough to get back into the game for a while, and this will generally slow down the rate at which you learn.

Having a buffer available by increasing the funds you have to invest with will actually keep you active for longer, since you can jump right back up whenever you make a mistake. This doesn’t mean you should steer clear of small accounts; it simply means that you need to be aware of the limitations associated with them.

Futures trading is a great way to get into the investment industry; you simply need to ensure you are taking the right steps towards financial success by starting out with the right type of account for your financial situation.

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