Forex vs Equities and Futures


In the Forex market, it’s common to have greater leverage than the equities, futures or options market. Traders can utilize a high leverage (up to 200:1) without risking a margin call situation. Leverage is a double-edged sword. Without proper risk management this high degree of leverage can lead to large losses as well as gains.

24-Hour Market

The Forex market is a seamless 24-hour market. As a trader, this allows you to react to favorable/unfavorable events by trading immediately. It also gives traders the added flexibility of determining their trading day.

Ability to Profit in Up or Down Market

Unlike the equity market, there is no restriction on short selling. Profit potential exists in the currency market regardless of whether a trader is long or short, or which way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means a trader has an equal potential to profit in a rising, or falling market.

Superior liquidity

With a daily trading volume that is 50x larger than the New York Stock Exchange, there are always broker/dealers willing to buy or sell currencies in the FX markets. The liquidity of this market, especially that of the major currencies, helps ensure price stability. Traders can almost always open or close a position at a fair market price.