Why You Should Choose the Forex Market Over Futures

Why You Should Choose the Forex Market Over Futures

The forex market sports a whole lot of advantages over other markets. Aside from being relatively more accommodating than the stock market, the forex market can also beat HQBroker Forex Bonus the futures market for many reasons.

It has a lot of advantages. And you don’t really have to be a top notch economist to know what these advantages are.

The forex market is open 24 hours

Forex trading begins at 5:00 pm EST Sunday in Sydney. Then, at 7:00 pm EST, trading in Tokyo starts. London comes after at 3:00 am EST. New York comes last at 8:00 EST and closes at 4:00 pm EST.

If you haven’t noticed, before New York ends the session, Sydney is already back and up and running again.

The forex market is always open, enabling you to react to favourable or unpleasant news by just trading immediately.

On the futures market side, FX Bonus important news or groundbreaking updates come in from the United Kingdom or Japan while the US futures market is sleeping. This means that the next trading session for the next day could be a very wild one.

The forex market is extremely liquid

Its liquidity is another solid advantage for the forex market. To name figures, more than $5 trillion is traded on a daily basis, putting it at the top of the most liquid and largest market in the whole world.

Why is liquidity important? For one, a very liquid market can absorb huge trading volumes and transaction sizes that’s not found in any other market. This also prevents any entity from temporarily taking control of the whole forex market.

For comparison, the futures market trades only around $30 billion per day.

You have to pay lower or no commissions

Most of the time, brokers ask traders to pay them commission fees. This is particularly due to the advent of electronic communications brokers, which have sprouted like mushrooms for the past few years.

But the prize that you have to pay in forex spot market is very much lower than the fees you will incur when you invest in the futures market. In addition, the competition is so tough among forex brokers and that means you can get the best costs as well as extremely low transaction costs.

The risks are very limited

As part of risk management, you as a trader must have position limits. And this figure is put at a level that is relative to the money that you have in your account.

In the forex spot market, you can lessen your risks since the online functions of the trading platform you use generate a margin call automatically if the trading capital in your account falls below the required margin.

During normal market conditions, all your open positions will be shut or closed right away. And in fast market conditions, your position could be closed beyond your stop loss level.

Meanwhile, in the futures market, your positions can be liquidated at loss that is way bigger than what you previously had in your account. You will shoulder the responsibility of any resulting deficit in the account.

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