Are you looking for a way to diversify your portfolio and increase your returns? If so, you may be thinking about the futures market and the Forex market. The Forex market has several advantages over traditional stocks and futures. What are a few advantages of going with the Forex market instead of futures?
Open 24 Hours Per Day
First, the Forex market is open 24 hours per day. You do not have to worry about waiting for an opening bell, as you would with the futures market. There are exchanges all over the world that give you access to the Forex market, so you can customize your trading to meet your own schedules.
Even though there is a chance that a broker somewhere might ask you to pay a commission in the Forex market, this is still rare. Because there is so much competition among Forex brokers, you should not have to worry about paying commissions. If you shop around, you should be able to find the best quotes possible, helping you save money on your transaction costs. This is much better than the futures market, where you might have to pay a commission on every trade you make, driving up your costs.
When you trade on the Forex market, you have access to the most liquid exchange in the world. The market can easily absorb transaction sizes and volumes that dwarf any other part of the market. The futures market simply cannot compete with the Forex market, making the Forex market significantly more liquid. You never have to worry about your orders slipping.
Because the Forex market is so large, you have a lot of certainty regarding your price. You do not have to worry about the price changing on you at the last second because trades are executed so quickly. In contrast, you will not be able to access instant trade execution if you decide to trade on the futures market. Even though electronic trading has gotten faster, your prices are still far from certain. Usually, the prices represent the quote on the last trade, not the quote at which your trade is going to be fulfilled. If you would like to access a greater degree of certainty on your price, then you need to go with the Forex market.
You can Limit Your Risk on the Forex Market
Finally, you need to have position limits in the Forex market, which forces you to limit your risk. This is usually set relative to the money you have in your account. This can protect you from losing everything in your account. In the futures market, you do not have this type of protection, which could magnify your level of risk. If you want to be in control of your risk, then the Forex market is the answer.