Forex vs. Futures

The forex market also has bigger advantages over the futures market as well, and is very much bigger in size.

In Terms Of Liquidity,

The forex market trades over $3.8 trillion daily, while in the futures market, only trade as little as about $30 billion is per day.
You can’t compare mice to an elephant. This is outrageous!
Forex is the largest and most liquid market all over the globe. It can absorb trading volume, and transaction sizes, that makes it render other markets invisible per say, though they exist. The futures market has relatively limited liquidity.

In Terms Of 24-Hour Market

The Forex market is all round the clock, 24-hours, Sunday to Friday, Non-stop,
As a trader, this allows you to react to favorable or unfavorable news by trading immediately.
You can take advantage of important news release to capitalize on the futures market.
For example, if there is an important data release that comes in from the UK while the U.S. futures market is closed, the opening of the next market day could drive the price so great because the overnight markets in futures currency contracts still exist, but they are scarcely traded. This is because they are not very liquid, and are very inaccessible for the average investor.

In Terms Of commissions

The advent of internet has made it very possible for Electronic Communications Brokers to become popular and prevalent over the past couple of years.
Brokers in the forex market may require you to pay little commissions, which are peanuts compared to what traders pay in the futures market. Again, there is great competition among brokers in the fx spot market and you can easily get the best quotes at very low transaction costs, in the form of Spread.

In Terms Of Price Certainty

In the forex market, the price with which you enter a trade is certain under normal condition, and you can get instant execution of orders. In this case, what you see, is what you get (WYSIWYG).
On the other hand, you cannot get the certainty of price and instant execution of trade in the futures and equities market. The prices quoted by brokers may be that of the last trade. And it is not the price with which the contract will be filled for you. They often give you wrong quotes.

In Terms Of Limited Risk

There is room for traders to minimize risk in the foreign exchange market. This is set in the form of Lot Size depending on individual capital. The platform can even generate a Margin Call should your required Margin exceeds the available capital in your trading account.
Therefore, traders position are limit to minimize the risk of losing all their funds. Any open position in this case may close automatically under normal condition. But during any important economic release, it could close beyond your set stop.
Ok buddy, let’s see Mr Futures in this respect.
In the futures market, positions are liquidated at a huge loss than what you had in your account. You will also bear the deficit accrued in the account. 

From the table above, the Forex market looks great when compared to the Futures market.
Forex is awesome! Isn’t it?
 

Forex Versus Stocks

There are so many options to trade in the stock market, which may get you confused as to which one to trade. For example, there are over 4,500 stocks listed on the New York Stock Exchange (NYSE). We also have more than 3,500 stocks listed on the NASDAQ. We’ve not talked about the rest,
The question is; which one will you trade? Do you have the whole lot of time to stay on top of so many companies?
But in currency trading, there are dozens of currencies traded, but the majority of market players trade only the four major pairs. I think four is very easier to keep an eye on than thousands of stocks.
That's just one of the many advantages of the forex market over the stock markets.
Let’s take a look at other advantages of forex over stocks.

In Terms Of Hour Of Trade,

The forex market undoubtedly a 24-hour market. Most brokers are open from Sunday at 4:00 pm EST to Friday at 4:00 pm EST, with steady customer service. You can trade during the U.S., Asian, and European market hours without restrictions.

In Terms Of Commission Paid

Most forex brokers charge no commission or additional transactions fees to trade currencies. The forex market also have tight, consistent spread which makes trading cost more lower than those of any other market including the stock market. Most brokers are compensated for their services through the spread.

In terms Of Execution of Market Orders

In forex, your trades are instantly executed under normal market conditions and the price shown when you execute your market order is the price you get. You're able to execute directly off real-time streaming prices too.
Brokers only guarantee stop, limit, and entry orders under normal market conditions. But when there is an economic release, order execution may experience some delays.
The stock market are not filled instantly, you are at the expense of your broker.
In Terms Of Short-Selling Without An Uptick.
Unlike the equity market, there is no restriction on short selling in the currency market. There is always an opportunity to trade whether a trader is long or short, or whichever way the market is moving. You always have equal access to trade in a rising or falling market.

In Terms Of Middlemen Requirement

The stock is a centralized exchange and therefore has room for middlemen. A third party is always involved and this party located in between the trader and the buyer or seller of the stock will cost them money. The cost can be either in time or in fees.
But in forex trading, it is a decentralized market, which means quotes can vary from different currency dealers. You can get the best deal out there because it is Competitive. Forex traders get quicker access and cheaper costs from ever ready brokers.
                 

In Terms Of Market Control Through Buy/Sell Program.

The stock market is very susceptible to large fund buying and selling.
In forex, the massive size of the market gives no power to any one fund or bank to control a particular currency.
Banks, hedge funds, governments, retail currency conversion houses, and individuals are just some of the participants in the spot currency markets where the liquidity can never be controlled.

In Terms Of Analysts And Brokers Influence The Market

In stock, brokers could form an alliance with analyst to relate opposite information about certain assets. The news could mislead investors to buy while the stock is heading down south.
In foreign exchange, as the prime market that generates billions of revenue for the world's banks and is a necessity of the global markets, Analysts have very little effect on exchange rates; they just analyze the forex market.
In Summary, take a look at the table below;

It is evident that Forex has greater advantages over Stocks.
Let’s also compare Mr.FX with the Futures market.
 

Advantages of Forex

There are numerous benefits of trading forex. We will outline few of them right here and now:

You Pay No commission

Forex Market requires no clearing fees, no exchange fees, no government fees, and no brokerage fees. Most retail brokers are compensated for their services through something spread.

There Is No Need For middlemen

Spot currency trading totally eliminates the activity of middlemen. You have direct access to trade with the market responsible for the pricing on any currency pair.
So, why the middleman? It’s of no use lol!

The Lot Size Are Not fixed

In the futures markets, the contract sizes are determined by the exchanges. For silver futures, the standard-size contract 5,000 ounces.
But in the spot forex, you determine your own lot, or position size. This allows you to participate even with little accounts of mere $25.

There Is Low transaction costs

The retail transaction cost (Spread= difference between bid/ask price) is relatively less than 0.1% under normal market conditions. At larger dealers, the spread could be as low as 0.07%. This strictly depends on your leverage. We will talk more on this giant killer called leverage later.

It Is A 24-hour Market

The market is open from Monday morning opening in Australia to the afternoon close in New York. The forex market never shut down.
This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade: morning, noon, night, during breakfast, or in your sleep.

No One Can Corner The Market

The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank of the world, if there is any) could control the market price.
I’ve heard people push the blame of their bad trades to their broker, claiming they cornered the market.
I don’t believe this but BAD brokers could manipulate the feed and gives you wrong price (passed price). That’s why you must do your proper research before making your choice of broker.

You Have Your Hands With Leverage

In forex trading, a small deposit can control a much larger total contract value. Leverage gives the trader the ability to make good profits, and at the same time keep risk capital to a minimum.
For example, a forex broker may offer 50:1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $2,500 worth of currencies.
Calculated as Deposit x Leverage= Amount controlled.
In this case, $50x50 = $2500
Similarly, with $500 dollars, one could trade with $25,000 dollars and so on. Do the calculation yourself if we are right.
While this offer looks attractive, always remember that leverage is a giant killer in forex. Leverage can lead to huge losses as well as profit without proper risk management.
Don’t pursue the luring gift of great leverage by brokers. Learn to manage your risk properly.

The Market Has High Liquidity.

You can enter a trade (buy or sell) right away just at a click of a button under normal market condition, as there are usually other traders willing to take the opposite side of your trade too. This makes the spot market highly liquid because market is huge and has millions of participants.
Nothing can hold you back on a trade. You can even chose to set your trades to run automatically. In this case, your position closes when your profit target is hit (limit order) OR your trade get closed when price goes against you (stop loss order).
You see! Forex is great!!

There Is Low Barriers to Entry

Getting started in foreign exchange would never demand huge capital. When you compared forex to stocks, options or futures, the amount of investment required is so minute. Brokers offer "micro" and “mini” trading accounts, some with a minimum account deposit of $25 0r even $10.
This makes trading forex more accessible to the average individuals who have a very small start-up capital to trade.
I still reject the idea of starting with the bare minimum.

You Can Get Freebies Everywhere

Most online forex brokers offer "demo" accounts for you to practice trading and build your skills, including live forex news and charting services.
All this comes to you in handy for freee!!!!!!!!
Demo accounts are great resources for those who cannot afford the starting capital at the moment and would like to test their trading skills with the demo before opening a live trading account and start bearing the risk.
Please DEMO TRADE for at least 3 months before trying out with your real money. It’s very important.
We have talked about stocks and futures in a nut shell. But for the purpose of being at ForexTowers.Com (to study forex Trading), let’s try to compare the duos with our subject matter.