Advantages of Forex vs. Futures

24-Hour Trading Liquidity

Since the Forex market, in a sense, follows the sun around the globe, it rarely experiences periods of illiquidity. Any trader in any time zone can trade Forex at any time during the day or night. You no longer have to wait for the market to open when news has already hit the streets or have to stop trading because the CME, CBOT or other American futures pits have closed for the day. This gives the Forex trader added flexibility and continuous market opportunities that just aren't available in Futures.

There are three main economic zones that are linked throughout the world. For instance, when the Pacific Rim markets such as Japan and Singapore begin to slow, the European markets of England, Switzerland and Germany begin. These Forex markets are followed by the North American markets of the United States, Canada and Mexico. As the North American markets begin to slow down for the evening, the Pacific Rim starts their trading day again. This example shows that you are no longer limited to trading using a comparatively short, trading day offered by U.S. markets only.

Foreign Exchange is one of the few true 24-hour markets. When trading Forex, clients enjoy unparalleled liquidity 24 hours a day. In many Futures markets, however, the overnight access available to traders is simply window dressing. The lack of liquidity and restrictions on what types of orders a client can place make trading and protecting positions ineffective.

A good example is the Globex market. While the Globex market is only closed for a 15-minute period each day, the liquidity available after the open outcry market is closed in Chicago is normally very low. Spreads are wider and the ability to place larger orders is non-existent. As a result, most volume traders are forced into trading the exchange for physical market overnight. The EFP market is the Spot market priced in Futures pricing. EFP's, however, come with additional fees and are not available from an electronic interface. Electronic access, speed, commission-free trading, unmatched liquidity, and 24-hour-a-day access makes spot Forex the choice for the foreign currency trader.

Execution Speed and Quality

As a result of the unsurpassed liquidity in the spot FX market, the execution speed and quality is far superior to that of the Futures markets, and other markets as well. Every Futures trader has experienced periods of inconsistent execution and price uncertainty – for example when even a market order was subject to a 30-minute fill delay. Despite electronic platforms and limited guarantees on execution in the Futures market, execution price and time is far from certain. In contrast, when trading with FX Universal, the price you see on the trading platform is a real-time streaming executable rate. What-you-see-is-what-you-get. Instantaneous execution with the tightest spreads in the industry is only a single-click away. You can easily get out of a position for profit taking as easily as you can get in on all your market, stop, limit, and entry orders.

Highly Trending markets

The Forex market offers some of the smoothest trends available in any market. No other market can come close to the amount of monetary volume and participation as the Forex market. In turn, this creates a haven for traders not having to deal with gaps and price movements, erratic spikes and other choppy market conditions more commonly experienced in the lower volume markets, like Futures or Options.

No Commissions or Hidden Fees

Though some speculators are unaware, all financial markets have a spread (the difference between the bid and ask price). In the Futures market you are not only paying the spread, but you are also paying commission charges, clearing and exchange fees on top of the spread. Ticker prices in the Futures market typically signify the last traded price, not the spread. FX Universal offers you commission-free trading on tradable prices. This allows you to make quick decisions on your Forex trades without having to account for fees that may affect your profit/loss or slippage between the price you have just seen on the ticker and the price upon which the order will be filled.

Better Leverage

One of the main advantages for traders trading Spot currencies with FX Universal is the leverage capability afforded to them. With margin policies as lenient as .5%, a trader is able to leverage up to 200:1. That is, a trader can control a $100,000 position for only $50. Keep in mind however, leverage is a double-edged sword and you should try to avoid overleveraging, as it magnifies both profits and losses.

No Slippage Policy

Slippage is often a concern by customers, and it should be, because there are companies in the retail and institutional sector that specialize in precise slippage on stop orders to expand their revenues from clients. FX Universal guarantees filling of customer orders at their respective stop price, unless extreme market movements dictate otherwise.