Forex Trading versus Futures Trading

FuturesVSForexThose that trade the financial markets find themselves with many choices. There are many instruments out there – stocks, bonds, futures, and forex.  These products and their derivatives are each unique in their own way.

The futures market, which also includes the commodities markets, is probably best known for its financial futures. The E-Mini S&P future has become one of the most popular products to trade. The E-mini S&P offers decent volatility with good liquidity and allows traders to enter and exit the market in a timely fashion.

Other futures markets include natural gas, wheat, and corn. These markets, while being major products, are not as liquid and are driven by forces like weather. These markets are also primarily traded by corporates, farmers, and hedgers.

The Forex market is the largest market in the world. Trading at over $5 trillion a day, it eclipses all of the other markets combined. The Forex Trading market is truly a global market as it incorporates multiple currency pairs that are affected by events in different countries. Being a 24 hour market, the Forex market prevents position risk where futures traders and equities traders that hold positions are unable to exit them when those markets are closed.

Without a great deal of capital, a Forex trader can create an account with a Forex broker and develop many types of trading systems with low cost transactions. He or she can experience the flexible trading advantages that major hedge funds and other trading operations use. Global event’s present many opportunities for Forex traders. These events can happen any time and being able to trade 24 hours can help keep you in the game.

Overall, Forex trading has a distinct advantage over futures trading in that futures brokers require a great deal of capital for one to have an account set up.


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Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.