Friday, November 20, 2009

ADVANTAGES OF FOREX VS. FUTURES

Liquidity

The Forex market is the heavyweight of all markets with $1.5 trillion daily transactions, as opposed to the $30 billion daily volume limited liquidity available in the futures market. Stop-loss orders and limit orders are executed without slippage and requoting.

100:1 Leverage

One of the factors that sets the Forex market apart from all other markets is the substantial leverage offered. With US$1,000 per position, the trader holds US$100,000 worth of a currency (a 100:1 leverage, compared to a 15:1 leverage offered by the futures market). FX International Group stands to offer up to 400:1 leverage depending on size of funds and risk level.

Forex Trades 24-Hours A Day

Like the equities market, the futures market offers limited trading hours, whereas the Forex market trades around the globe 24 hours a day, opening Sunday at 5:00PM Eastern Time, and closing on Friday at 4:00PM.

Commission Free Trading

There are no commission charges when trading currencies. With consistently low spreads on the major pairs, trading Forex with FX International Group is less expensive than trading any other market, including the Futures market which normally carries a commission and exchange fee.

Flexibility

Unlike the futures market, where a trader is locked into a position, the spot currency market offers traders the flexibility to respond to news, events, or catastrophes in a matter of seconds in order to profit from changing market conditions or prevent greater losses.

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