FOREX VERSUS FUTURES &Cents Zero

FOREX VERSUS FUTURES

Is there a significant difference between trading futures and FOREX?

The FOREX operates at a higher volume, thus offering better liquidity.

As I have said, the FOREX is the market with more volume, which already operates daily with highs peaking close to US $6 trillion in turn over a day and an average near US $3

trillion a day in turn over. This market can absorb the volume of that daily operation. The futures market, on the other hand,operates with approximately US $30 billion a day. This is nothing compared with US$3 trillion. This is why the futures market has limited liquidity, whereas the FOREX market always has complete liquidity, which tells us that sales or purchases can be settled at any time or stop losses can jump without affecting the

market in volatile conditions. It must be said that the FOREX is more than 45 times bigger than all the combined futures markets.

The FOREX is a 24-hour market. This is precisely the major disadvantage of the futures market. The FOREX is a 24-hour nonstop market, but the futures market is open only for 7 hours.

Therefore, FOREX traders have the ability to react to news that arises elsewhere, whereas futures traders have to wait for the opening of the daily meeting.

No commissions are involved.

In the FOREX, the broker earns money from the spreads that the broker provides. The intermediary is eliminated, and the transactions are being done online through the

platform provided by the broker or by telephone. Logically,the broker assumes the spread, which is the difference between the bid and ask prices. In the futures market, on the other hand,a certain commission has to be paid to the broker. Some brokers in the FOREX are starting to charge commissions so that they can provide the tightest spreads possible. It really is a preference, but the bottom line is that the broker will make money somehow.

After all, that is why they are in the business.The price is known, and the execution is instantaneous.

In a FOREX transaction, the price that the trader sees at the moment is the price that he or she will get; orders are executed instantaneously under normal market conditions. On the other hand, in the futures market, the order is not executed immediately. Sometimes the price does not reflect the current market price, but the price of the final purchase price will not necessarily be the one at which the trader is buying.

There is a guarantee of limited risk. In the FOREX, traders can limit their risk of losses. The risk is minimized by the platform, which automatically generates a margin call if the margin required exceeds the available capital in your account. Futures losses are always a possibility; a position can be closed with losses, and therefore, you may have a deficit in your account and incur a debt.Keep in mind that there is always a potential to lose money trading.

All the futures commission merchants (FCMs) will provide you with disclaimers, which they are required by law to provide. I have been trading in the FOREX for many years, and I have never had or seen a negative account in the spot FOREX owing to a margin call.

The main advantages of the FOREX versus futures include the following:-

 To know more You can always go to Currency Futures Trading Basics How do forex futures trading prices relate to those in the cash forex market?

FOREX VERSUS FUTURES0

the source by :  JAMES DICKS

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