Global Currencies

5. Futures Against Forex

Benefits of Forex Vs. Futures	Forex	Futures
Up to 200:1 Leverage**	Yes	No
Price Certainty †	Yes	No
24-Hour Trading	Yes	Restricted
Commission-Free ‡	Yes	No

More liquidity

The forex market, the largest and most active market in the world, conducts business of about 2 trillion dollars a day worldwide. A total 46 times greater than all of the futures markets combined. worldwide conducts business of about 2 trillion dollars a day which might sum up to be 46 times more than that of all the businesses of the overall futures market. The daily futures volume recorded on the Chicago Mercantile Exchange is about 2 to 3 % of the volume generated in the daily forex trade, making the volume of the forex market stand a significant portion of global capital markets activity. Having such great liquidity is a distinct advantage that forex has over futures.

Rates and execution

Certainty in rates and instant implementation of orders is what you get when you trade forex (under normal conditions), whereas this is not necessarily the case in the futures market†. Technology has not advanced the futures market to the point where efficient execution is possible due to the uncertainty in price fills in market orders and the unstable speed. With Global Currencies a trader can interact with lives quotes on charts with trades filled without delay. No matter how unpredictable or dynamic the market tends to be there is no change in the quotes you see and the execution price.

Greater leverage

Traders must take into account that leverage can work for or against the trader, and that increasing leverage increases both prospective gains and losses on any given trade**. The forex market lets a trader place trades with larger leverage than in most futures contracts. And, as a bonus, degree of leverage used while trading is specified by the client. Global Currencies offers you a leverage of up to 200:1. In futures the margin rates for day traders and overnight positions are different depending on the volume of the deal whereas there is no change in margin rates for forex trading.

Commission free

While trading with Global Currencies you don’t have to worry about any kind of commission as we are compensated by the spread between the bid and ask prices‡. The fee futures traders have to pay can weigh down their profits considerably. At Global Currencies we also have the facility of opening an account with a low initial deposit amount of $200. We also offer a test account (without any actual investment) for those who are new to this business and want to practice before starting the actual trade.

Access to forex

Unlike any other market including futures, the forex market continues trading 24 hrs a day starting from Monday at 5 pm EST to Friday 5 pm EST meaning you can trade at any time of the day or night. Also, unlike forex, the futures market has overnight contracts which can only be traded sparingly, are tricky to access, and the liquidity is also minimal whereas forex trading can take place at any time. Furthermore, the trading software platform, MetaTrader 4, also has designed custom alerts to keep you updated about any move the forex market makes at any time. We also have an automated trading system that will buy or sell at your specified rate (if the market moves towards that direction), hence executing your order rapidly. If you are interested in downloading the software MetaTrader 4 for free, please sign in for our practice account. We can also open up mini accounts with as low as $2000 investment.

**Without proper risk management, this high degree of leverage can lead to large losses and well as gains

Risk Warning

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.

There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair.

More over, the leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses. To manage exposure, employ risk-reducing strategies such as 'stop-loss' or 'limit' orders.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Forex.com/UK acts as the clearing agent and counterparty to customers introduced by "Global Currencies" for an IB margined forex transactions. FOREX.com is a trading name of GAIN Capital - FOREX.com UK Limited and is authorised and regulated by the Financial Services Authority. FSA No. 190864.