Managed futures investment or simply, managed futures, are a means in which an investor may take his risk capital and elect to have a commodities trading advisor make trades in his account on his behalf. This advisor – also known as a CTA – should be registered with the National Futures Association (NFA) and provide a thorough picture of the fees he charges and his past performance in a lengthy tome known as a disclosure document.

Any perspective investor should read the disclosure documents completely. They normally contain valuable information about the CTA and his previous futures investment experience including his qualifications, prior futures investment positions, and overall program performance. Not all traders will be the same and not all disclosure documents will be the same. Each one should be a window into that CTA’s program and should be updated every nine months, at least.

Now managed investing does not mean being hands off. Any trader interested in futures investment strategies should consider a few responsibilities that they will have as well as these facts about futures trading:

-          Each trader should weigh the suitability of commodities futures and options trading against their trading goals

-          Each trader should consider the inherent risks of a loss associated with futures and options trading and judge how that works with their risk tolerance level

-          There are no guarantees for profits, no matter who is managing your money

-          Past performance, even in a disclosure document, is not necessarily indicative of future results

-          Only risk capital should be used for trading. Never trade with money you cannot afford to lose

-          Be aware of the fees and commissions associated with trading and understand what charges your trading account may incur with each trade

-          View your statements carefully each time you receive one, don’t just expect that you can deposit money and watch it grow. Losses are possible.

-          Don’t be afraid to ask questions

There is plenty of research to be had ahead of time. Don’t just jump in before you understand the methods, as well as the risks. Learn more about the managed futures investment world and register for free for more information.

Trading in futures and options involves a substantial degree of a risk of loss and is not suitable for all investors. Past performance is not indicative of future results.