Most traders looking for something to trade generally have 3 choices: stocks (both common and options), futures, or currencies. There are other instuments to trade also, such as bonds and a few other exotic things - most of these are out of reach of the average trader. The most well understood is stocks, and least is probably currency pairs. Most investors and traders have heard about hte futures markets, which are not too hard to understand with a little bit of research.

First off, futures inherently have leverage far beyond stocks. Most stocks you can get 2:1 leverage overnight and 4:1 intra-day for day trading. Futures are leveraged by default because of how they are constructed. This is a double edged sword. For one, you can trade futures and have a reasonable rate of return with as little as a few thousand dollars. Stocks this is not possible (unless you delve into the murky waters of penny stocks). This allows returns to be amplified UP and DOWN. It is not unreasonable to have $5000.00 in your account and on a single trade make or lose $300-$500 depending on which future you trade - a 10% return (or loss!) on your principal investment in the account. If this type of risk and volatility makes you uncomfortable, then futures are not for you.

Second, futures by nature are actively traded and lead the market pushes and selloff's. This creates volatilty which in turn creates many opportunities to trade. With this action comes the forced nature to think quickly. You often times only have a few seconds to get an order in or you will miss the move. It is also a good trait to develop the ability to anticipate an direction and have orders in ahead of time. Again, this requires skill and fast thinking. If this is not your strong suit, or you are very analytical, futures day trading or swing trading is probably not for you.

As a final note, you must be able to figure out risk levels and stops very quickly, making them almost second nature. You cannot enter a position and then think about where your stop should be and where your target should go. A trader should already know this before entering any orders. Since futures are leveraged a lot, you should always assess the stop first (read risk level) and determine the odds of that stop getting hit in the next 10-15 minutes BEFORE actually placing a trade. Why 10-15 minutes?? Most trades people do in the futures market on average only last this long, unless they are swing plays. Most futures traders choose not to hold overnight - there is risk of gaps and additional overnight margin requirements because of this risk. Traders close out positions at the close of each day.