It is important for you to know the differences between forex and futures. Why? Because both are
very trending in the financial sector, they can attract the attention of traders. Both are investment products that you can choose from.
If forex trades currencies, futures are trading commodities in the future. Of course, the two traded for different things. However, which one is superior? Check out the article below to find out the differences and advantages of each.
4 Differences Between Forex and Futures
The differences between forex and futures is not only in
what products are traded, but also in terms of liquidity, operations, conditions, and risks. So, they cannot be equated with trading. Although both offer their own advantages, you need to be aware of which type is most suitable for you.
Whether currency or commodity. Therefore, check out the advantages below. Make sure you don't get confused between the two.
1. Traded Assets
If you want to see the difference between forex and futures, the most obvious is from the assets traded. This is very real because if they are the same, then why are the products different?
The commodities market itself includes the buying and selling of manufactured goods, financial and currency bonds, and agricultural products. Usually, the products include: petroleum, corn, gold, and so on.
While on the other side, it focuses on buying and selling foreign exchange or traded currencies. Therefore, this instrument often compares prices per time and is dynamic.
2. Time Flexibility
The second difference between forex and futures lies in the time of operation or the time of the transaction. In plain view, trading will pamper traders more because of its flexibility.
The currency market has the advantage of being very liquid and stop orders can be executed more easily than in other markets. It is always open 5 days (Monday-Friday) a week, 24 hours a day.
While trading in commodities is carried out from morning to evening, when the Indonesian market opens at 09.00 - 16.15 WIB. These hours then require the trader's readiness to be on during business days and hours.
3. Minimum or commission free
The difference between forex and futures is known to lie also from the commission or brokerage fees charged. Generally, each instrument charges a broker or platform fee. Actually, this commission fee will still look small when compared to the value of the trade you make.
However, additional costs are still costs that must be paid. The market offers the best price quotes with lower transaction fees. This is because trends and occupancy in the trading world are more active than commodities.
This puts futures slightly less competitively. Not that the price of the broker is expensive, but not as competitive as the trading market.
4. Price Certainty
Forex is better known as an arena that is flexible and easy to reach, especially from the price offered. Prices are quoted with certainty under normal market conditions.
While the commodities market, this product cannot offer a definite or instant price. The execution seems to be slowing down compared to the currency market which offers fixed prices.
Therefore, this difference between forex and futures can influence a trader's decision. Moreover, it affects the profit and loss.
Many of you must be confused when you see the difference. At first glance it looks the same, but the actual form is very different. From the assets offered to the operating mechanism can definitely affect your value.
Otherwise, instead of searching and learning day by day, you can use Didimax forex broker as the best forex broker in Indonesia. Best broker can help you to avoid mistakes in understanding the differences between forex and futures.