Traditional retail forex involves trading contracts of difference (CFD’s) in the spot market focused on currency exchange.
Problems with forex
Most retail trading platforms offer limited tools for analyzing price action.
If you work as a sales manager for a company and your boss asks you to predict the price computers next year, you would look up your time and sales data and see that the greatest number of sales has taken place at a certain price. You wouldn’t get a candlestick chart out with stochastic, moving average and Fibonacci to predict the future price. So the tools required for helping see time and sales with actual sales data are important.
The foreign currency exchange market is a decentralized market. With no central exchange to document sales transactional data. This is actually a disadvantage for forex not an advantage. Behind the scenes there is a huge portion of activity between banks in addition big corporations use foreign exchange for hedging and purchases and then the tourism industry has people exchanging money every day too. All these transactions are unseen and can have an impact on currency exchange.
Benefits of Futures (Example S&P500)
Futures Trading uses a central exchange recording all the transactions.
Futures trading platforms have professional tools to analyze price action.
Conclusion.
Futures trading is a better choice than forex trading.
Because they think it’s going to be a Whole Big Deal just like learning to trade forex was.
And because they don’t understand that once you can trade forex, it takes about 10 minutes to learn how to trade futures, because there are hardly any differences and the very few there are can be learned in almost no time.
And because they don’t understand the importance and significance of those differences, and the enormous advantages of futures.
then you have to buy live data, for forex are free, and purchase trading program or use something for free. You have to care to settlement if you don’t want to deliver basic index.
With only $100 I would probably start (after proving on demo that I can reliably do it!!) by paying someone like the 5%ers $39 for a no-time-limit evaluation for funding. If I cannot do that safely and eventually qualify, there is no point in losing my $100?
But I will definitely switch to futures (like anyone making a living from trading?) as soon as I can afford to, as my friends did.
No point in paying spreads, having my “broker” against me, and having all the other countless universal spot forex problems that fill trading forums, when they can all so easily be avoided?
Tom Hougaard is a high stakes trader, he trades CFD as he finds it difficult to get filled at the price on futures. See his website for futures vs CFD.
