There are mechanisms for limiting your losses. Stop-loss orders tell your broker to buy or sell a particular futures contract at the market price if and when it reaches a specified level. For example, if you buy a futures contract at market, expecting the price to rise, when the market price is $550, you could then place an offsetting stop order to sell at $540. This protects you from a price drop below $540 if things don't go as you planned. Be aware that stop-loss orders are not guaranteed; if there are no buyers willing to pay the strike price for your stop-loss order, your brokerage will sell the contracts at whatever price it can get.

Another way is to use spreads, where you buy one futures contract and sell another. You expect to profit from a change in the relationship between the purchasing price of one and the selling price of another. If you lose on one contract, you may be able to offset the loss with a gain on the other.

Are futures appropriate for you?
As a general rule, only sophisticated investors with the willingness to research and a fundamental understanding of commodities markets should consider futures. The high level of volatility and potential for significant loss makes these securities appropriate only for those with long-term investment time horizons and a high level of risk tolerance. Investors who are easily swayed by emotion or who fear losses should avoid futures.

Leveraged trading should only be considered by those who have the financial resources to withstand significant losses. Remember that you are responsible for the full face value of leveraged contracts, not just the percentage paid to buy them. This could lead to you losing other securities or even your home to pay for the losses.

If you’re willing to do the research and accept the risks, trading futures can be a part of a long-term investment strategy. You’ll need to pay close attention to these investments and it’s a good idea to enlist the help of an experienced financial advisor who can help you understand the risks and potential for gains.