The foreign exchange market has many advantages over futures, similar to its advantages over stocks. Of course, everyone chooses for themselves specific conditions for trading in financial instruments, but below we will talk about the peculiarities of the Forex market.
- Round the clock market
- Minimal commission or absence of commissions
- Confidence in the price
The daily turnover in the Forex market exceeds 5 trillion dollars mark, making this trading platform the largest and most liquid market in the world. In comparison with these volumes, the futures market with its turnover of 30 billion seems insignificant.
The limited liquidity of the futures market creates low attractiveness among traders due to not the best trading conditions. In contrast, the foreign exchange market can boast of constant liquidity, which means no slippage and the possibility of eliminating positions with virtually any conditions.
Round the clock market
The Forex market has no physical location, because this is an electronic trading platform. Naturally, the work of the foreign exchange market is supported by a network of banks, on which the trading sessions depend. As a result, due to the change of time zones and the fullness of the financial market, Forex works 24 hours a day, allowing traders from any corner of the world to conduct trading activity at any time of the day. Starts a “tape” of Sydney’s activity on Sunday at 5:00 pm Eastern Standard Time. Then at 7:00 pm the relay is picked up by Tokyo, and at 3:00 in the morning – London, at 8:00 – in New York. Until the New York market closes, Sydney will start work again.
Continuous work allows not only to enter the market at any time, when the trader has a free minute, but also actively respond to world news, without missing an opportunity to earn money. If, say, the news came from one corner of the planet, you can connect to any session and “break the jackpot,” or simply not lose money.
Minimal commission or absence of commissions
Considering that brokers become more and more demanded every year, some of them can ask clients to pay a commission for certain operations. And although most brokerage companies avoid the same things, the commissions that can be requested will be negligible, compared to requirements in the futures market.
Confidence in the price
The essential difference between Forex and the futures or stocks market is that the trader can count on instant execution of the order at a certain price in the currency market. Participants in the futures market may face the problem of specifying the price of the broker, which should be indicated in the contract, but which differs from the final price of the asset.