Futures contracts are agreements to buy or sell an asset or commodity at a specified price at a future date; they are used to fix prices in order to avoid fluctuations in the market. It is not difficult to start trading futures – you simply open an account with a broker that offers futures contracts in markets you wish to trade.
Futures trading for beginners can offer some significant risks, however. You can lose significant sums if you are not knowledgeable about the markets you are trading in or how futures contracts operate. A good way to begin is to use a ‘virtual’ trading account which enables you to trade in the futures market without committing actual money. This is a good way to see whether you understand this type of trading sufficiently to make some money and will give you practice maintaining a portfolio of futures contracts and testing your investment strategies.
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