When CME Group reported its busiest May ever this month, with record average daily volume of 33.2 million contracts, up 15% from a year earlier, it confirmed what brokers have been seeing for months: more everyday traders are moving into futures. These contracts let you trade everything from the S&P 500 to crude oil and gold with a fraction of the capital that buying the underlying assets would require, which is exactly why learning how they work matters before you place your first order.What Is Futures TradingFutures trading means buying or selling a standardized contract that obligates you to exchange an asset, such as an index, a commodity, or a currency, at a set price on a set future date.In practice, almost no retail traders take delivery of anything. You close the position before expiration and pocket, or absorb, the difference between your entry and exit price.Because each contract controls a large notional value with a small deposit called margin, futures amplify both gains and losses, which is the defining feature of the entire market.How Futures Contracts WorkEvery contract has fixed specifications set by the exchange: the underlying asset, the size, the tick value, and the expiration month.Take the E-mini S&P 500, the most popular equity index future. Each one-point move in the index is worth $50 per contract, so a 20-point swing means a $1,000 gain or loss.The Micro E-mini version is one-tenth that size, at $5 per point, and these smaller contracts now make up roughly half of all equity index volume at CME Group, a sign of how much retail participation has grown.To open a position you post initial margin, typically 3% to 12% of the contract's notional value, and you must keep your account above maintenance margin or face a margin call.Futures also trade nearly around the clock, from Sunday evening to Friday afternoon U.S. time, and CME recently extended its cryptocurrency futures to full 24/7 trading, so positions can move while you sleep.The Commodity Futures Trading Commission regulates the entire market, and its basics on futures and margin are worth reading before you fund an account.How to Start Trading FuturesFirst, open an account with a futures-approved broker, which involves a short application covering your income, net worth, and trading experience.If you are weighing platforms, Benzinga's guide to the best futures brokers breaks down commissions, margin requirements, and platform tools side by side.Second, fund the account with more than the bare minimum. If day trading margin on a Micro E-mini S&P 500 contract is $500, funding with $2,500 to $5,000 gives you room to absorb normal swings without an immediate margin call.Third, practice in a simulator. Paper trading lets you learn order types, such as market, limit, and stop orders, with zero money at risk, and most platforms offer it free.Plus500's U.S. futures platform pairs an unlimited free demo account with micro contracts and low day-trading margins, so you can practice futures trading on Plus500 before committing real capital.Fourth, start with one micro contract. A single Micro E-mini position keeps your per-point exposure at $5 while you learn how fast these markets move.Managing Risk in FuturesAlways know your maximum loss before you enter a trade, and use a stop-loss order to enforce it.A common rule is risking no more than 1% to 2% of your account on any single position, which on a $5,000 account means cutting a losing trade at $50 to $100.Leverage is the main danger. Because a 2% move in the underlying index can wipe out 20% or more of your margin, position sizing matters far more here than in stock investing, and the mechanics differ meaningfully from a standard margin loan, which we cover in our explainer on how margin trading works.Futures gains also receive distinct tax treatment: Section 1256 contracts are taxed 60% at long-term rates and 40% at short-term rates regardless of holding period, per IRS rules.If the leverage feels like too much too soon, building experience with defined-risk strategies first is reasonable, and Benzinga's guide on how to trade options shows one common stepping stone.With CME now listing 24/7 crypto futures and planning a Nasdaq CME Crypto Index contract, the menu of tradable markets keeps expanding, so the trader who masters position sizing on one micro contract today will have plenty of places to apply it.