What is the Difference between Forex and Futures? (Continued...)

24 Hour Liquidity and No Restrictions on Order Placement
Foreign exchange is one of the few true 24-hour markets. When trading Forex, clients enjoy unparalleled liquidity 24 hours a day. In many Futures markets the overnight access available to traders is simply put, "window dressing". The lack of liquidity and restrictions on what types of orders a client can place make trading and protecting positions a nightmare.

A good example is the Globex market. While the Globex market is only closed for a 15 minute period each day, the liquidity available after the open outcry market is closed in Chicago is normally very low. Spreads are wider and the ability to place larger orders is non-existent. Because of this most volume traders are forced into trading the EFP market overnight. The EFP market is the spot market priced in futures pricing. EFP's however come with additional fees, and are not available from an electronic interface. Electronic access, speed, no fees, and unmatched liquidity 24 hours a day makes Spot FX the choice for the currency trader.

Methodology
Foreign exchange is the prime market in the world. If you look at any market trading through the civilized world everything has a value in money. Money is the root of all pricing. Global finance itself is the distribution and re-distribution of money throughout different channels and different financial derivatives. Trading spot currencies can be done with many different methods and you will find many types of traders. From fundamental traders speculating on mid-to-long term positions based on world wide cash flow analysis and fixed income formulas, to the technical trader watching for breakout patterns in consoldating markets, or the Gann fanatic looking to duplicate the techniques of W.D. Gann, the methods for trading foreign exchange are many. Spot currencies is a great market for the "trader". It is where "big boys" trade, and can provide both large profit potential as well as commensarate risk for the speculator.

Portions of "Forex vs Futures Trading" were brought to you compliments of GFT Forex Trading.