A closer look at the statistics coming out of the markets indicates that many people are opting to trade forex in preference to trading futures. Why could this be?
One of the reasons why more people are opting to trade forex online – rather than trade futures is the appreciation of the fact that the (online) forex market is always open for 24 hours a day on all days of the week (except on Saturdays and Sundays) whereas the futures market is usually only open for 7 hours, the same days. Now the fact that the forex trade market remains open for so long means that the person getting into it has more hours to keep an eye on the fluctuations, and possibly making a big killing in the process, while the probability to do the same is reduced in the case of a trade in futures, who only has 7 hours to do the same in any given day. The 24 hour nature of the forex market also makes it suitable to continue with one’s day job alongside their forex trade (as one can trade in the after-work hours) whereas the 7-hour nature of the futures market makes it virtually closed to people who can only manage to trade after their day jobs.
Another reason making people opt to trade forex online rather than futures is that generally no commissions are required to be paid to trade forex online, whereas trading in futures online calls for huge commission to be paid to the brokers before one can get trading.
And the fact that the concept of forex trade is so much easier to understand than the concept of futures is another fact that makes it so much more attractive to trade forex online, rather than trade futures. Many of us can relate with the idea of buying foreign currency at a lower price, holding it for some time, and later selling it at a higher price which is the basic concept of forex trading – but no so many of us can relate with the idea of buying contracts for future deliverables, watching market fluctuations and then selling the same contracts (not the deliverables) at a higher price, which is the basic concept of the futures trade. In any case, the forex trade is something that is taught in most school arithmetic classes (about forex rates), but many of us are yet to hear of a school system where the futures trade is taught to (non-business) students in their basic courses of study. Matters are not made any easier by the fact that the whole concept of futures trade sounds a bit phony to the layman, who might be afraid of being swindled off their hard-earned bucks.
Then there is also the fact that there are so many forex education resources in public circulation, and so few of futures trade education resources in circulation, which is another possible explanation as to why so many more people are getting into the forex trade rather than the futures trade. Thanks to this disparity in information spread, chances are that if you stop a layman on the street and ask him what forex trade is, they will have at least some sort of an answer for you, but if you ask them what the futures trade is, the same layman is not likely to have any form of answer for you.