Forex vs. Futures Day Trading

With time advancement, there are many investment options available where you invest your money and make profits. An investment method is considered good when there is less risk of money and high return rates, but it isn’t easy to find an investment option. So in this article, you will get to know about two of the best investment methods: forex and futures. Many experienced investors prefer these two investment options.

Forex vs. Futures Day Trading

The difference between forex day traders and futures day traders is that the futures contract is an agreement between a buyer and seller to buy or sell a particular asset at a given price on a specified date. On the other hand, forex is buying, selling a currency against another country’s currency. Spot forex traders, on the other hand, are limited to the currency market alone. However, CFD forex traders can trade various instruments such as currencies, indices, stocks, commodities, etc., as same as futures traders.

Now the big question that comes to everyone’s mind is, which is the better investment option. Well, it depends on a budget of an individual and what type of trader he is.

If you have a low budget, then forex trading is best for you because it requires less investment than futures. If you want to know more, then down below is a detailed explanation of both forexes vs. futures day trading. So without wasting any time, let’s jump into the main deal.

Forex Trading

Forex trading, also known as foreign exchange trading, is the world’s biggest currency market. In simple words, it is a decentralized global market where all the currencies of different countries or you can say all the world’s currency trade. In 1875, foreign exchange trading was started, and it is also considered an important event. The good thing about forex trading is that you can use a demo account if you are new to get more knowledge about it.

The first purpose of a demo account is to provide general information to beginners and better understand the market’s concepts. The second purpose is that if anyone wants to try some new strategies, then demo accounts are beneficial to avoid any loss. The third purpose is that a demo account can help identify a broker’s services before actually trying it.

Though a demo account can give some idea, it is not that effective, and if you want to gain some experience, then micro trading is the perfect option, and it only requires 100$ to sign up and start trading. This is advantageous for forex trading because brokers in futures demand heavy deposits of around 10000$ to start.

Trading futures vs. forex

Pros Of Forex Trading

1- Leverage- Profit chances are high because it provides access to high leverage positions.

2-More Opportunities- Forex trading only closes on Saturdays and Sundays and remains 24/7 open on other weekdays and increases trading opportunities.

3- Liquidity- Liquidity in the forex trading market is high compared to futures, and commission rates are less.

Cons Of Futures Trading

1- Problem for Small Traders- All the big institutions like banks are trading in it, and it becomes tough for small traders to make high profits because they have less information, and it is difficult for them to influence price movements.

2- Volatile- Forex trading is volatile, and people who hope for short term profits may face this, results in making their strategy unprofitable.

Futures Trading

As mentioned above, a futures contract is an agreement between the buyer and seller to trade different assets at a given price in a specified time. The assets that are traded in futures are known as derivatives. The asset can be any commodity like gold, oil, etc. Investors generally use future trades to reduce risk, and it also has a date of expiry. The good thing about this is that there is no chance of any doubt or confusion because both parties discuss everything related to the trade.

Trade currency specification, expiration day, last trading day, delivery month are some important terms. Another important point that everyone should know is that the prices changes every day in the future and all the things related to prices must be discussed daily to avoid any confusion. Everyone knows that the market is uncertain and changes frequently. This is why many investors go with the futures trading option because this is the best platform to avoid the risks and reduce the chances of losses.

Pros Of Futures Trading

1- Management of Risks- One of the best advantages of futures trading is risk management. The interesting thing about futures is that the purpose it came into existence is risk management. It reduces the risk, and the uncertainty of the market won’t affect you.

2- Faster money- Another great advantage of futures is that people who have enough experience and proper knowledge and judgment of the market can make money faster.

3- Efficient- The futures market’s efficiency is high, and in comparison to other options, it is a fair market.

Cons Of Futures Market

1- Leverage Problems- Movements in the market price are sometimes very rapid, and prices in the contract can rise and fall daily. So the leverage that is decided in the contract can create problems.

2-Time Issues- The futures contract has a fixed date of expiry, and the prices become less attractive as the expiry date comes, which may result in the contract’s expiration.


Forex and Futures both have their pros and cons, and if you are planning to invest your money, then it is essential to plan everything and research everything properly. Another thing is that before coming to any platform, make sure to educate yourself and get as much knowledge as you can. Many investors use both platforms, and you must identify your needs before entering any of the platforms.

One thing that you can do to increase the chances of being profitable soon gets an experienced mentor that can share real-life examples and tips, and you also have to be patient because it will take some to understand the market better.



Igor has been a trader since 2007. Currently, Igor works for several prop trading companies. He is an expert in financial niche, long-term trading, and weekly technical levels. The primary field of Igor's research is the application of machine learning in algorithmic trading. Education: Computer Engineering and Ph.D. in machine learning. Igor regularly publishes trading-related videos on the Fxigor Youtube channel. To contact Igor write on:

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