AlexSmith 
You are looking at futures now that you have recently entered the realm of prop trading. Well done. Trading futures can be exciting, active, and full of opportunities, particularly if you have a prop business to help you get cash that you wouldn't otherwise have. The problem is that not all futures contracts are created equal. For novices, some are simple, while others might be like jumping into a whirlwind.
You should concentrate on futures contracts that are liquid, simple to comprehend, and appropriate for novice traders if you're just starting out in a prop environment. This post will explain the finest futures contracts for novice prop firm traders, their rationale, and how to approach them without losing your mind.
Why Futures Are a Big Deal in Prop Firms
Why are futures so much beloved by prop firms, and why do they make their traders study them?
- Leverage without borrowing drama – Futures inherently have leverage built in. You don't borrow money from a broker; the contracts themselves provide you with exposure to huge positions with relatively minor margin requirements. That is ideal in a prop environment where risk rules are stringent but opportunities are enormous.
- Controlled and open – Futures markets are centralized, so no fly-by-night brokers making off with your funds. Exchanges such as the CME (Chicago Mercantile Exchange) offer a level playing field, and prop shops such as that predictability.
- Varied markets in one platform – With futures trading, you can trade stocks, commodities, currencies, or even interest rates—all out of the same account. For prop traders, that's like a buffet of possibilities.
- Tight spreads and liquidity – Certain futures contracts are among the most liquid instruments globally. That is gold for newbies who don't have time to be stuck in trades that have wide spreads.
Bottom line: prop firms need their traders trading liquid, transparent, and scalable markets. Futures tick all those boxes.
What Makes a Futures Contract Beginner-Friendly?
Not all futures contracts are a good place to begin, particularly within a prop context where tight risk restrictions can either make or destroy you. That is what makes a contract friendly to beginners:
High liquidity – You need contracts with a great deal of buyers and sellers. That way, your orders are filled quickly without insane slippage.
Reasonable margin requirements – Prop firms provide you with funds, yet they also have drawdown conditions. Lower margin contracts allow you to trade without wiping out your account in a single bad decision.
Easier underlying asset – You can trade more easily something you know. Currencies and stock indices are easier to track than something like palladium or orange juice.
Manageable volatility – Not enough, and you'll make too little. Too much, and you'll be riding a roller coaster with no seatbelt.
With that said, let's dive into the futures contracts that check all the right boxes for newbies.
E-mini S&P 500 (ES) and Micro E-mini S&P 500 (MES)
If futures trading had a poster child, it’d be the S&P 500 Future contracts. These are hands down the most traded futures contracts in the world.
Why they’re great for beginners:
The S&P 500 is familiar. Even if you’re new, you’ve probably heard about it. It represents the 500 biggest U.S. companies, so it’s a straightforward proxy for the stock market.
Liquidity is insane. You’ll never struggle to find buyers or sellers.
The micro (MES) is ideal for newbies in prop firms. It's 1/10th of E-mini size, which translates into lower risk but the same market movement access.
Prop firm angle: Most firms persuade newbies to begin with MES since it enables you to refine strategy implementation without losing big drawdowns. When you become consistent, then you may increase ES for substantial profits.
Best use: Trend-following, scalping, or even swing trading. The MES provides you with the margin to experiment with different strategies without running into your risk limits prematurely.
E-mini Nasdaq 100 (NQ) and Micro E-mini Nasdaq 100 (MNQ)
If you're interested in tech stocks and enjoy the thrill of high volatility, Nasdaq futures could be your thing.
Why they're great for beginners:
- They're just as liquid as the S&P.
- The Nasdaq also moves more violently, creating a lot of opportunities for traders.
- The micro version (MNQ) maintains risk in a controlled level as you acclimatize to the market's speed.
Prop firm angle: Prop firms typically notice traders migrating to NQ because it provides larger moves in tighter timeframes. That can equal quicker profits—but also quicker losses. That's why most firms recommend you learn on the MNQ first.
Best use: Volatility-based day trading strategies. If you can handle risk, MNQ is an excellent learning ground.
Micro Crude Oil Futures (MCL)
Now, let's move into commodities. Crude oil has long been a favorite among traders since it responds well to supply, demand, and geopolitical news.
Why they're great for beginners:
- The micro crude oil contract (MCL) allows one to trade oil without massive exposure.
- It's liquid and trades enough to be worth it.
- Crude oil is news-chosen, so it's not too difficult to stay on top of fundamentals.
Prop firm angle: Companies appreciate when traders spread beyond indexes. Oil provides a different taste for your trading and demonstrates you are able to adjust. But be careful: crude can be volatile. The micro keeps you safe while you learn.
Best use: Short-term trades near news events, or intraday strategies. New traders should not carry oil overnight initially because it may gap aggressively.