Why Trade Currency Futures vs. Forex?

Compared to the spot forex market, currency futures trading offers significant advantages to traders. From the transparency of a regulated market to the absence of uncertain transaction costs, here are the top 3 reasons why many traders prefer trading currency futures over forex.

Discover the advantages of forex vs forex futures in this 2 video!

Transparent playground and levels

There is no centralized exchange when trading forex, which leads to limited market transparency. Although the foreign exchange market is an electronic market, orders are often processed by a “trading desk”. This includes a broker that handles currency orders. This leads to inherent challenges in ensuring a fair market for all participants.

When futures contracts are traded, the transactions are cleared through a regulated central market such as CME Group That is EUREX . This means that there are no middlemen and transactions are published publicly in real time, including detailed timing and sales information. Futures markets also operate according to the FIFO rule: first in, first out. This ensures a level playing field for all futures traders.

Accurate volume data

Many futures traders rely on volume data when using technical analysis tools, such as Volume Profile, to make strategic decisions. Since futures markets are centralized, volume data is available to all traders. With no centralized exchange when trading forex, volume data is not readily available on all forex exchanges.

starting price

When trading traditional spot currencies, varying spreads make prices uncertain and transaction costs can vary with each trade. When trading through a futures broker, all transaction costs are fixed and upfront. The cost of doing business is known from the outset.

These are just a few of the many benefits of trading currency futures instead of forex.

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