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Currency Futures — Pro And Contra Part 2

First of all because liquidity of futures contracts throughout days changes more than a similar indicator on a spot market. Because of it traders currency futures have as a whole the worst conditions on comparison with the competitors in market FOREX. After all wider spread between prices of purchasing and sale of futures in comparison with a spot market automatically select a profit part at speculators.

The second weighty argument against use of currency futures: the spectrum of these tools as which it is possible to recognize objectively liquid is rather limited. Actually, the basic steams, and also the most popular cross-rates are actively traded only. There are a lot of all other tools though don’t differ the liquidity, capable to satisfy requirement which are shown to the given indicator by short-term speculators. Upon, the market of currency derivatives from the point of view of liquidity is now approximately in the same position, as FOREX about ten years ago.

Thus, if to compare possibilities of option markets on futures and a spot market comparison will be at all for benefit of exchange tools. Currency options on FOREX actually more flexible and convenient in use for the decision of any tasks which face currency traders.

The technical analysis of the futures markets more difficult performed by in comparison with studying of schedules of currencies which are traded on a spot. The reason is simple: futures have the limited term of life that forces to address to difficult procedures of making the actual and finished contracts. Accordingly, there is a risk of erroneous representation about the market because of inevitable adjustments of the prices.

The given approach demands use of more expensive software, than the analysis directly on prices FOREX. And yet the fact that these refined programs of a technical expertise will accurately carry out all adjustments, without misleading traders. Therefore frequently the technical analysis of currency futures appears to be conducted more practical, using for this purpose a spot market.

Here also it turns out that if as object of gamble is currencies it is better to trade them directly on FOREX, instead of to use for these purpose tools of the urgent market. However if trade in currencies is considered only as a separate episode in a general flow of transactions with different tools it is better to choose all the same for this purpose the markets of derivatives.

If you want to participate in forex trading must start from learning the basics of currency exchange market to make sure you do not experience problems with this industry.

There is another option – you can hire professional traders to do this job for you – read more about forex investment here. Also make sure to search for the info in a good forex book.


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