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Hi guys, are there any advantages in trading spot forex over futures. Futures has tighter spread and is more precise in pricing.
The only one I can think of is you can take a huge size in spot (or a smaller size than 1 future contract). But I suppose for most retail traders, futures is liquid enough. I doubt that many here trade more than 10 lots at one go.
Is there any other reason why I should be trading spot instead of futures?
Can you help answer these questions from other members on NexusFi?
The main reason to trade forex is the leverage. If you have a small account you can get a little more bang for your buck. That's what attracts nubies to forex.
If you can afford it, trade futures. A much cleaner market to trade.
Guys, I think there is another advantage of spot forex over futures. But probably the type of traders mainly here in futures.io (formerly BMT) might not find it applicable.
The advantage is the forex pairs available. There are trading strategies that relies on trading a basket of currencies which move in tandem to each other. You will not be about to trade that way using the futures alone.
the magic so to say why big players trade with spot rather than futures is that spot contains higher liquidity, meaning you can gain higher profits at the end of your trading session/s and that so far it is kept as OTC and not controlled, except for the no hedging and the lower leverage requirements in the states
I suppose it is how you like to take the things. It is true that FOREX is not traded on any centralized exchanges like the stock market but this is the beauty of it because of that this market is that liquid and everybody want to tap into it and gain profits. As for the other quote concerning the professionalism of the traders - well there are different types - the market is pretty differentiated to big institutional investments, banks, hedgers, then intermediaries and then retailers. So to say that professional firms will prefer only the stock or the bond or the futures market is it pretty understated.