Trading forex futures

Forex futures are standardized futures contracts to buy or sell currency at a set date, time, and contract size. These contracts are traded at one of the numerous futures exchanges around the world.

Clear, competitive pricing and superior trade executions Sophisticated trading platforms, designed for active currency traders Market leader with proven record of financial strength and security. Forex, much like most futures contracts, can be traded in an open out-cry system via live traders on a pit floor or entirely through electronic means with a computer and access to the Internet. The trader must understand the principle determinants of business cycles within a country, and be able to analyze economic indicators , including though not limited to , yield curves , GDP , CPI , housing, employment and consumer confidence data. Trading and Speculating As with the equities market, the types of trading method is dependent upon the unique preferences of the individual when it comes to both techniques and time frames. Now meet the winners who trade the forex market.

Why traders choose FOREX.com

Here we break down the differences of futures vs. forex currency trading. The Forex. The term “forex” is an abbreviation for “foreign exchange marketplace.” An exclusively digital over-the-counter (OTC) venue, the forex facilitates the trade of currencies throughout the world. In .

Currently, open-outcry is being phased out in Europe and replaced with electronic trading. As mentioned earlier, in terms of the sheer number of derivatives contracts traded, the CME group leads the pack with 3. The Intercontinental Exchange and Eurex follow behind at 2 nd and 3 rd places, respectively, at Each futures contract has been standardized by the exchange, and has certain characteristics that may differentiate it from another contract.

Of utmost interest to traders, however, would be the minimum price fluctuation, also known as the tick. A tick is unique to each contract, and it is imperative that the trader understands its properties.

That means if the Canadian dollar appreciates from. E-minis are ideal for new traders of their increased liquidity and accessibility due to the lower margin requirements. The contracts trade 23 hours a day, Monday to Friday, around the world. Forex futures are used extensively for both hedging and speculating activity. Let's briefly examine an example of using FX futures to mitigate currency risk. As with the equities market, the types of trading method is dependent upon the unique preferences of the individual when it comes to both techniques and time frames.

Day traders generally never hold positions overnight and can be in and out of a trade within a matter of minutes seeking to jump on an intraday swing. To read more see Analyzing Chart Patterns: Many, if not all the aspects of technical analysis for equities can be interchangeable with the futures market, and thus, trading between the two asset classes can be an easy transition for day traders.

Swing traders are traders who hold positions overnight, for up to a month in length. They generally employ technical analysis spanning a longer time frame hourly to daily charts , as well as short-term macroeconomic factors.

Finally, there are the position traders who hold onto a position for multiple weeks to multiple years. For these individuals, technical analysis may take a back seat to macroeconomic factors.

Position traders are not concerned with the day-to-day fluctuations on the contract prices, but are interested in the picture as a whole. As such, they may employ wider stop-losses and differing risk management principles than the swing or day trader. Note however, these are generalized definitions and the differentiating characteristics of traders are not black and white. At times, day traders may employ fundamental analysis, such as when Federal Open Market Committee data is released.

By the same token, position traders may employ technical analysis tools to set up entries, exits, and trailing stop losses. Furthermore, the time-frames utilized by traders are also quite subjective, and a day trader may hold a position overnight, while a swing trader may hold a position for many months at a time.

Much like in the equities markets, the type of trading style is entirely subjective and varies from individual to individual. Similar to the equities market, traders of FX futures employ both technical and fundamental analysis. Technical analysis by nature, examines price and volume data, and subsequently, similar methodologies are prevalent across both the equities and the futures markets.

The competition among spot forex brokers is so fierce that you will most likely get the best quotes and very low transaction costs.

When trading forex, you get rapid execution and price certainty under normal market conditions. In contrast, the futures and equities markets do not offer price certainty or instant trade execution.

Even with the advent of electronic trading and limited guarantees of execution speed, the prices for fills for futures and equities on market orders are far from certain. The prices quoted by brokers often represent the LAST trade, not necessarily the price for which the contract will be filled. Traders must have position limits for the purpose of risk management.

Risk is minimized in the spot forex market because the online capabilities of the trading platform will automatically generate a margin call if the required margin amount exceeds the available trading capital in your account.

During normal market conditions, all open positions will be closed immediately during fast market conditions, your position could be closed beyond your stop loss level. In the futures market, your position may be liquidated at a loss bigger than what you had in your account, and you will be liable for any resulting deficit in the account. Judging by the Forex vs.





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