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Forex VS Futures

Forex trading is now a popular alternative to trading in the stock market or futures market. Markets can be very volatile, you may have seen just how volatile by the price fluctuation in your savings. Even though it is the case that markets are volatile you can use that volatility to your advantage. The main disadvantage of trading in the futures market have to deal with things such as the times of opening and closing, the transaction fees, and the intermediaries (middlemen) in a transaction. The main advantage in trading in the Forex markets is that you do not have to deal with these problems.

Forex vs Futures

The Forex Market is Always Open for Trading.

The Forex market is always open for trades, with the exception of a short period on weekends. Trades in the Forex market can happen 24 hours a day, which differs from the closing and opening of the futures, as well as the stock, market Monday through Friday. The only time to trade on the futures market is between 9:30 AM – 4 PM Eastern Standard Time. Because of this trading in futures limits your options, but with Forex trading you have the ability to trade, virtually, all the time.

Lack of Commission within Forex Trading.

With Forex trading, you do not need to give a commission on your trade. Forex trade brokers will only take the difference that is between the asking price and the bid price rather than charge a commission.

Orders in the Forex Market are Immediately Filled

If you trade in futures, a delay is commonplace between when you make the order and when it is filled. This can have a significant effect on the money that you receive. Considering that the Forex market has a very high volume of transactions your order will be almost immediately filled. You should be aware that there may be some very short delays during volatile periods, but they are minor compared to the delays in the futures market.

Take the Middleman out of the Equation

When trading on the Forex market, you take out the middleman. There is no intermediary that is required in Forex trading, so the Forex trader is able to both buy and sell. This can make the trading transactions both faster and cheaper.

Easier Choices

When trading in futures, there are many trading options that you can have, which can make it a difficult decision that you should trade. However by trading on the Forex market, there are only several dozen currencies to deal with. Mast people that trade on the Forex market only deal in the 4 main currencies, which can make the trading decisions that much easier, as you have less options available to you.

Less Risk

Forex traders have to set margin limits. The reason for this is a margin call will be issued if the margin amount that is needed exceeds your available account capital.