Home Finance Day Trading Futures Contracts – Know the Advantages and Disadvantages

Day Trading Futures Contracts – Know the Advantages and Disadvantages


Futures contracts are the legal contracts to sell or purchase specific quantities of a financial instrument at a specific price with a delivery date set at a specific time in the future. In general, trading Futures contracts consist of many strategies, and one of which is day trading that involves purchasing and selling one or more Future contracts within the same day with no need to hold open a position, whether short or long, overnight. Day trading varies in duration as it can last for the most of a trading session or sometimes only for a couple of minutes. This type of trading strategy needs the trader to be knowledgeable, experienced, and disciplined at its rules in order to make day trades of Futures contracts done successfully.

Pluses of Day Trading Futures Contract

Day trading aims to provide the trade worriless sleep after spending a tiring day at the floor of exchange. This requires all the positions get closed by the end of the trading day in the way that no position is left overnight to move to the next day. With this strategy, you are free from all the risks associated with a trade and are mentally ready for the next day to make a freshly new trade.

Typically, Futures contracts positions are opened at a diverse price from where they were closed the previous day. The variation in the price indicates that the odds of unforeseen profits or losses can rise when a trade position remains open at the end of a trading session. In addition, day trading Futures contract can be handy to learn more about the market within a short period of time. As a day trader, you will make a few trades on a daily basis and conclude them before going back to home which is far better than those traders who make only one trade per week and spend all the time worrying about its risks. In short, day trading Futures contracts comes with supreme usefulness to accelerate your trading experience and knowledge. 

Shortcomings of Day Trading Futures Contract

Pros and cons are important part of any trade type. Like advantages, day trading Futures contracts has also several drawbacks. This type of trading requires you to adhere to strict discipline rules to succeed in the market. Day trading involves enormous bills of commissions which often cause many day traders to wind up in the mid of the year. For instance, if you have an account with $20,000 to day trade a contract with $5,000 value, you will have to pay around $10,000 in terms of commissions at the end of the year. Therefore, if you want to ensure a break-even on your trading account, you will need to make up to 25 percent return on your tradeoffs.

Not all day traders can make money with trading Futures contracts mainly because of lacking preparation and failure to follow the discipline. GigaFX provides you with the opportunity to do your homework, make an effective plan, and adhere to day trading discipline so it can turn out to be a lucrative venture for you. As you will learn from GigaFX reviews, on this website, you not only get the exposure to the relevant trading markets but also can place Futures contract trade with whatever trading strategy you believe is the best for you.