Future in futures ….

Firstly when I came across the concept of futures I was very much thrilled and excited and I was on top of world, as to purchase anything in equity or commodity I have to shell out only 6-10% margin money. I thought I can play long and short in all the futures and make quick bucks. Though my expectations from the future market were not very high (in terms of profits) and the profit margin I was targeting was hardly .15 %, the moment I had that much margin I wanted to exit my position.

Till this time it was fine and sounded interesting, but

Suddenly I have lost my hope; my faith has also been shattered.

This has happened surprisingly, for what I was never feared.

I’m left with nothing at all, my happy time ended so small.

As I did transaction based on some assumption that how the market will react, but as you know the assumptions are not always true. The same thing happened to me in all my future transactions, market reacted reverse to my assumption and as these type of trading are high risk prone and are calculated on mark to market basis I made huge losses. The losses are enough to eat up all my profits earned till day in the equity market, but this losses gave me a lesson that the future market is when you have surety of the market movement and you should have deep pockets to enter in the future market.

How short is short

The second thing that proved deadly to me is taking a short position in the market. When you take a short position you assume that the market will fall and you will purchase at lower level, but the things turned to be reversed, Instrument appreciated and I was forced to purchase them at a higher level. I was forced because the transaction has to be squared off within the same day. (Where as if you buy something and it depreciates you have an option to hold it for a long). After making some wrong transactions I learned the lesson that you should hold the instrument to play short in the market so that in case if it appreciates then you have the instrument to settle the trade.

Image source: online-stock-trading-guide.com