In the world of futures trading, success can mean significant profits—but mistakes can be extremely costly. That's why it's so important to have a strategy in place before you start trading.
As of Dec 29, 2024, the average annual pay for a Futures Trader in the United States is $101,533 a year. Just in case you need a simple salary calculator, that works out to be approximately $48.81 an hour. This is the equivalent of $1,952/week or $8,461/month.
Trading futures comes with unique tax advantages over trading equities and ETFs. Under Section 1256 of the U.S. Internal Revenue Code, when trading markets such as futures, capital gains and losses are calculated at 60% long-term and 40% short-term.
Once you complete your education and gain some experience with trading, you can start pursuing a career as a futures trader by pursuing education in the financial industry. Consider positions that allow you to work directly with futures contracts or train under experienced traders.
The takeaway
Trading futures for a living is a compelling idea — but to do it successfully, you'll need sufficient startup capital and a well-designed trading plan. You'll also need a trading platform that offers fast, reliable access and the right technological tools.
The estimated total pay for a Futures Trader is $271,247 per year, with an average salary of $136,594 per year. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users.
Minimum Account Size
A pattern day trader who executes four or more round turns in a single security within a week is required to maintain a minimum equity of $25,000 in their brokerage account. But a futures trader is not required to meet this minimum account size.
You can start with as little as $100 USD if you start trading the micro futures.
One of the key benefits of futures trading vs. stocks is leverage. When buying or shorting stocks, most only offer 25% day trading or 50% overnight margin. With futures, you can put up less than 5% to control a position that represents a major market index or commodity that allows for potentially greater profits.
Many people have made millions just by day trading. Some examples are Ross Cameron, Brett N. Steenbarger, etc. But the important thing about day trading is that only a few can make money out of day trading and the rest end up losing their entire capital in day trading.
Day Trading
The defining feature of day trading is that traders do not hold positions overnight; instead, they seek to profit from short-term price movements occurring during the trading session.It can be considered one of the most profitable trading methods available to investors.
What are the trading hours for futures? Most futures markets are open nearly 24 hours per day, from Sunday evening until Friday afternoon, but some futures products have unique trading hours. But keep in mind that each product has its own unique trading hours.
Too many traders perceive futures markets as an intuitive arena. The inability to distinguish between price fluctuations which reflect a fundamental change and those which represent an interim change often causes losses. Not following a disciplined trading program leads to accepting large losses and small profits.
For /ES, the contract size is $50 times the index value. So, for example, if the SPX is at 5,100, the contract value is $255,000. The minimum tick is one-quarter of an index point, or $12.50 per contract.
So, the question remains: Is futures trading gambling? Any trades are educational examples only. They do not include commissions and fees. In short, no.
If your goal is $100 a day, you'll need at least $1,000 in your account. For a $300 daily goal, you're looking at $3,000 to $5,000 to trade effectively.
The 3 5 7 rule is a risk management strategy in trading that emphasizes limiting risk on each individual trade to 3% of the trading capital, keeping overall exposure to 5% across all trades, and ensuring that winning trades yield at least 7% more profit than losing trades.
The estimated total pay for a Day Trader is $127,259 per year, with an average salary of $102,993 per year. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users.
While futures can pose unique risks for investors, there are several benefits to futures over trading straight stocks. These advantages include greater leverage, lower trading costs, and longer trading hours.
You may be wondering, “How Much You Can Earn from The Stock Market?”. Well, the earnings can go up to Rs. 1 lakh a month or even higher if you are skilled enough and your strategies are in place.
Trading futures can be lucrative, but the flip side is that it's risky, especially in commodities and goods whose prices may prove to be highly volatile. That's why traders may decide to make hedged bets in the futures market, helping to limit their risks while still making attractive profits.