Futures trading is included in the type of trading that has a high risk (high risk). However, of course you don’t need to miss futures instruments.
Because futures instruments also have high profit opportunities and are useful as alternative trading in your portfolio.
A prospective customer needs to have several types of trading such as savings, insurance, movable or immovable assets, and alternative trading.
As an investor, you need to be careful. As with other trading assets, there are always certain individuals who want to commit fraud or carry out operations that are not in accordance with regulations, and on behalf of certain trading assets. Commodity Futures Trading is not spared from this.
One characteristic that needs to be suspected is when the party offering the trade promises high or almost unreasonable profits, without disclosing the risks involved in the trade.
There is no trade that promises trading without risk, because if we have decided to trade then profit opportunities will definitely come along with risks, both light and high.
Good risk management can save investors’ funds so that potential losses can be minimized. Indonesia also has a supervisory body for futures trading whose job is to protect commodity futures trading actors, including customers.
The supervisory body for commodity futures trading in Indonesia is BAPPEBTI (Commodity Futures Trading Regulatory Agency) under the Ministry of Trade.
Tips for Safe Trading on the Futures Exchange
The following are tips to consider when investing in the futures market:
1. Study the futures contracts that are traded
As for what customers need to know, namely futures contracts that are traded. In this case, customers need to pay attention to the contract specifications which include commodity standards (gold, crude oil, etc.), contract sizes, settlement methods, and trading hours.
Furthermore, the customer needs to pay attention to the maturity date of the contract. In commodity futures trading, there are several types of contracts, such as futures contracts, spot contracts, options, and so on.
Each contract has different characteristics and rules. So, make sure you fully understand the type of contract you are trading in to avoid potential losses.
2. Study broker representatives who have received permission from BAPPEBTI
If you want to trade in a calm, safe and secure way, you should always choose a company that is registered with BAPPEBTI.
Because this supervisory agency really helps customers to solve problems that might occur in the future, for example breaches of contract agreements, companies that are not transparent, or other fatal losses. BAPPEBTI has the right to follow up with the authorities when it finds a broker who is not responsible for customers.
3. Study the agreement documents
In Article 50 of Law Number 10 of 2011 concerning Commodity Futures Trading it is regulated that: futures brokers are required to submit company statement documents and risk notification documents and make agreements with customers before the futures broker concerned can receive funds belonging to customers for trading futures contracts, Sharia Derivative Contracts and/or other Derivative Contracts.
Through these laws and regulations, it is very clear that futures brokers are required to convey complete information to customers, as well as establish transparent relationships. This includes showing what important documents are needed to start a transaction, the transaction mechanism, legality, potential risks and others.
4. Learn the risks faced
Investors in futures trading can indeed get profits for sell-buy and buy-sell positions. However, often investors who join the futures broker they choose forget to understand the principle of high risk high return in trading.
Therefore, as investors or customers, we must know the transaction mechanism and recognize the risks that will be faced when starting a new trade.
In addition, investors must also know their personal financial condition before trading, including commodity futures trading. In addition, investors should trade on their own or not be represented, and not give user IDs or passwords to other people.
5. Never believe in high profit offers
An investor must carefully analyze to protect traded capital so as not to be trapped by unreasonable profit offers. Because basically what determines the size of the profit is the accuracy of analysis and good risk management.
trading does look very tempting when you get high profits, but it is also dangerous when we as customers or investors don’t choose the right broker in the futures exchange. Therefore, you have to be extra careful with companies that offer high profits with all the ease of liquidation that doesn’t make sense.