Misconception #1: “You can lose all that has been invested, sometimes more.”

There is truth to this statement, but the truth is twisted. Yes, you can lose a lot of money, sometimes more than you may have ever lost before. However, trading in futures is in no way, shape or form an investment. Neither should it be labelled as a possible investment. It is a speculation game where the rules are different and the stakes are high, a necessity for the potential high reward.

As it is a “high risk” game, it involves a lot of analysis of data, researching on the factors that may influence it, and common sense should not be ignored.

Misconception #2: “It is just glorified gambling.”

Some people label trading futures as gambling but do not use the same label on trading in stocks. They are really not much different actually. Both involve a lot of study on factors that may influence the prices, both involves a lot of analysis before making a sale or a buy.

The odds in being right or wrong for both are very similar. However, the odds of making money in futures are lower than those in making money in stocks. But, ultimately, the possible percentage of return in futures is much higher than the potentials offered by the trading in stocks.

Conclusion: trading futures has the same “gambling” properties as trading in stocks.

Misconception #3: “It is a rigged game designed for insider trading.”

Insider trading is usually associated with stock market rather than futures. There is very little information on the increase or decrease of the value of money as compared to the value of the stocks which can be manipulated easily by the experts.

More monitoring is done with the brokerage firms than there is on firms that deal with trading futures. The fact is, the futures is so hard to manipulate and if they are it is for very brief periods of time. The futures is so complex and diverse that no one individual or group can greatly affect the prices for a very long period of time.

It is true that some traders have an edge based on their inside information, however, if you were really informed on futures, you would know that the market is very possible even without the inside information.