Liquidity
Every day several trillions of dollars are moved in operations in the Forex market, making it the most liquid financial market in the world. This market can absorb such quantities of volume and transactions that make the capabilities of any other market appear dwarfed. The forex market always maintains its liquidity, important positions can be liquidated and stopped with executed orders without decreases, except that the market is, of course, in very volatile conditions.
| Advantage | Forex | Futures |
|---|---|---|
| 24 hrs to work | Yes | No |
| Operation without commissions | Yes | No |
| Leverage greater than 1: 400 | Yes | No |
| Safe price | Yes | No |
| Guaranteed risk limit | Yes | No |
24 hour market
At 2.15pm EST on Sundays, traders start trading in the markets of Sydney and Singapore. At 7pm ETS, open the Tokyo market, followed by London market at 2am EST. Before the New York market opens, the markets of Sydney and Singapore are already open again, it is then similar to a 24-hour market!
As a Forex trader, this allows you to know the news, whether favorable or unfavorable, immediately. If there is important news from England or Japan, while the US market is still closed, the next day there may be a major shift in it. (During the night, the markets that work on future currency contracts exist, but the traders do not have much liquidity and for the retail investor it is difficult to access them)
Free commission operations
Do you know what is good about trading currencies? That you do not have to pay commissions! Because you work directly with the market via the Internet, the costs of intermediaries are eliminated. Yes there is an initial cost in any operation you open, but this cost is reflected in the differential between the purchase and sale price (called the spread), and is also present in futures trading. Online brokers offset their services by this difference between the purchase and sale price and not by means of commissions (except in some cases of ECN type brokers in which they offer a very low differential applying a volume commission).
Safe price
When trading in Forex, there is a quick execution of the orders and the price is maintained as long as the market is under normal conditions. On the contrary, other markets do not offer a safe price or instantaneous execution of an operation. Despite the advantage of electronic transactions and the guaranteed speed of executing an order, prices in other markets are far from being the same. The prices charged by the brokers represent the last trade, not necessarily the price for which the contract will be executed.
Guaranteed risk limit
Traders may open positions by setting a loss limit in order to better manage the level of risk. In addition, the total risk is relative to the amount of money in each trader's account. The risk is minimized in the Forex market because the capabilities of operating in an online trading platform automatically generate a warning if the required margin exceeds the capital that the trader has in his account. All open positions close immediately, regardless of the size or nature of the positions held in the account. In other markets, the position is settled as a loss and the person is responsible for any remaining debt in the account. That's not good!
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