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FUTURES vs. FOREX

Foreign Exchange is the principal market of the world. With daily volume traded reaching $3 billion a day, the foreign exchange market is not dramatically affected by buying programs that allow it to be easily manipulated. The forex market offers some of the smoothest trends available in any market. This monetary daily volume in forex limits choppy markets, gaps and erratic spikes sometimes experienced in low volume markets, like futures.

24-Hour Market

Unlike most futures exchanges, spot forex markets are virtually a 24-hour marke, beginning at 5:00 est. in Sydney and Singapore on Sunday, and ending with the New York close at 5:00 est. on Friday. With global news affecting the markets, overnight news in Japan and England can cause gaps on the open in futures markets. Although overnight future contracts do exist, they are often thinly traded and difficult to access.

Execution Speed

Exchange traded markets do not offer the rapid execution or price certainty during normal market conditions like spot forex. Even with recent upgrades in electronic trading, futures contract fills are far from certain. Often the price quoted by exchanges is the last traded price, not the price the contract will be filled at.