It is a risk management tool, and the main function of the futures market is to provide enterprises and institutional investors with tools to avoid risks. Futures trading takes the form of margin. The leverage of margin financing and securities lending not only magnifies profits, but also magnifies losses. When a loss occurs, due to poor risk control, it is possible to lose all the money invested.

Futures trading requires investors to have certain professional knowledge, strong market analysis ability and risk tolerance.

Who is suitable for investing in futures? I think people with the following "three highs" characteristics can engage in futures investment and make profits.

1, with high risk tolerance.

Futures risk and expected annualized expected return are theoretically proportional, but stock risk and expected annualized expected return are not equal. Futures is riskier than stocks because it has the function of capital amplification, which not only amplifies the expected annualized expected return, but also magnifies the risk. If you choose a small leverage when making futures (for example, close to 1 or even less than 1), the risk of futures will be lower than that of stocks, because you can also short. However, since you choose to do futures, you will definitely use leverage. For ordinary investors, it is more appropriate to use 3-5 times leverage, which means you need to bear 3-5 times higher risk than stocks.

2. High self-discipline ability.

It is precisely because of the leverage of futures that the loss of every price fluctuation is amplified. If the stock does not stop loss, it will not lose all, and it may turn over its capital or even make a profit in a few years. However, if the futures do not stop loss, the funds are likely to return to zero or even become negative. Therefore, futures trading pays more attention to self-restraint, and investors with low self-restraint are almost doomed to lose money.

3. High psychological endurance.

Because the changes in the futures market bring much more changes in the amount of funds than stocks, for example, 50% of the positions made right may earn 20% or more a day, while the ones made wrong are the opposite; In addition, the domestic futures market often appears gaps and ups and downs, and only investors with higher psychological endurance can calmly cope with a large proportion of changes in account funds.

In fact, most individuals and families are suitable for futures investment if they only invest in futures with liquidity ratio below 1/5 and then cultivate their "three highs" ability.