2006-12-25 04:52:00 · 9 answers · asked by michaelpc12 2 in Business & Finance ➔ Investing
Generally the risk level of the two is about the same as they are based on the same asset, i.e. currency. However, there are some differences that may make one slightly preferable than the other. It depends on your trading strategy, your risk management strategy and your account level.
(ps. I will refer to the two as trading forex cash and trading forex futures)
1. With trading forex cash you can start out with very small amount (as little as $1 with oanda). Great if you are a beginner looking to try out. Forex commodity contracts generally come at around USD100,000 per unit. (see cme.com for detail specs on fx futures).
2. When you trade forex cash, you are trading with your dealer as the counterparty. They tell you their prices which may or may not be the prevailing market prices. With trading forex futures, you are trading in an exchange, so there is price integrity. You are getting the price that everyone sees.
3. Most forex cash dealers guarantee execution on their quoted price up to certain amount (usually 10-25 mm). Sometimes they waive this guarantee in a fast moving market (e.g. big news release).
There is no such guarantee with the forex futures market, so there may be times when you are not able to get execution of your trade due to lack of liquidity. In general though the forex futures market is very liquid.
4. Forex futures have expiration dates, so if you are trading with long-term horizon, you are going to need to roll-over everytime the futures expire. No such need with forex cash as the dealers usually take care to roll over your trade daily.
2006-12-25 15:28:22 · answer #1 · answered by minli98 1 · 0⤊ 0⤋
No. Currencies upward thrust and fall at unpredictable rates daily. Even shares are a greater predictable investment than the forex industry. till you're waiting to do it for a residing, and additionally you could make investments money you do no longer prefer, it quite is maximum suitable to leave forex figuring out to purchase and merchandising to the pros.
2016-12-18 18:53:55 · answer #2 · answered by Anonymous · 0⤊ 0⤋
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2014-09-15 08:43:30 · answer #3 · answered by Raducanu 2 · 0⤊ 0⤋
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2015-01-25 00:52:15 · answer #4 · answered by Anonymous · 0⤊ 0⤋
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2006-12-25 13:59:42 · answer #5 · answered by sil 3 · 0⤊ 0⤋
here are some of the benefits of using the forex
http://online-forex-trading-guide.blogspot.com/
2006-12-28 06:41:27 · answer #6 · answered by Jake K 2 · 0⤊ 0⤋