welcome my friend to this video on spotforex vs futures currencies spots forex trading spot forex markets and acomparison between the two some pluses and minuses each have their ownadvantages and disadvantages we'll walk through those with you today and you canmake your decision as to what's best for you
but I find that there are some ofthese things that a lot of people don't think about or maybe know about and youneed to before you make a decision so let's go through some of those first ofall let me give a side note you can also trade currencies with
exchange-tradedfunds and exchange-traded notes the problem that I find with a lot of themis that the price action is a bit different and they have a lot of gaps inbetween the bars those are not technical gaps it's just the way that the marketstrade so not real crazy about exchange-traded
funds and notes even thereally high volume one surprisingly that I've seen for currencies so I look atthe spot Forex on the left and then we've got the futures on the right we'lllook at the Euro today since that is such a high-volume market and I also putthe MACD down
there in the bottom just so you can compare how the indicatorswould look as well as price action now as you can see I'm gonna just I've gotmy global crosshairs on here so we'll just scroll over by a bar by bar realquick and you can see oh by the
way yeah this is a daily chart will look at someinternet stuff too but as you can see pretty much the same right now notexactly but very much the same from bar to bar to bar to bar bar to bar bar nottoo much difference there indicator looking pretty much
the same we'llscroll forward here aways again go forward here so you can see in advanceand so I like for example this bar right here you don't get a spike top reversalbar what we call there but it's you know green and one red on the other not a bigdifference
the overall price action is pretty much the same with very minordifferences now that it's not always true but it is true mostof the time so let's go down to a five-minute bar now we're looking at the5-minute on-the-spot Forks on the left and the futures on the right and
as youcan see they are a bit different in here they are a bit different so there aretimes when they will be different and the act of treating times are prettyclose to the same so you can treat either one of these 24 hours a day sowhat are some of
the big differences all right well first of all even though theyhave generally the same price movement but they will be have a little differentboth create 24/7 that's number two now so those are similarities but one of thebig differences is number three where the futures are treated on a
centralexchange and the spot Forks is not and that does make a difference in otherwords people will tell you oh well the spot Forks has all this amazing volumeincredible volume that is true but you don't have access to all that volumebecause you are not treating all throughout all of
the exchanges aroundthe world and through all the banks so therefore you have the volume or theliquidity that's made available to you by your broker so make sure youunderstand that and that should be part of your consideration and choosing aforex broker as well a spot forex broker number two
is that in general althoughthis has improved the spot forex regulatory standards in broker standardshave not been nearly as good as that as for the futures market now fortunatelywe've seen a lot of changes in that so that's been good but even here as oflate we've seen a few problems
with that so keep that in mind as well theleverage is better with the spot forex market than it is with the futuresmarket in general although that can vary so one of the things that that meanswell that's a double-edged sword right the leverage can be a good thing can
bea bad thing basically the more leverage you have the more money you canpotentially make we with a smaller account but on the flipside of that of course the more money you can lose with a smaller size accountas well and that's a problem so you've got to really take
that intoconsideration especially for beginning traders however I will say that one ofthe advantages of the spot forex market especially for beginners is that you areable to trade mini Lots or micro Lots and what that allows you to do is totrade with a smaller trading account so and it's
a good way after you've beenlearning trading and you've been paper trading simulate trading demo tradingwhatever you've been doing after you've got it down good you think your methodsworking you've proven it to yourself in practice and you're ready to starttrading with real money well if you create the futures
market then you haveto commit more money than you would in the spot forex market with a micro lotor a mini lot so kind of cool that you can trade the spot forex market withless money to help you ease in to the psychology of having to trade with realmoney
and I think that's one of the advantages there one of the things thata lot of people don't tell you is that at least here in the United States isthat there may be tax benefits to treating the futures market over againstequities that would include exchange-traded funds or the spot
forexmarket so I am NOT a tax professional I'm not giving you the tax advice onthat I'm just saying that that's a possibility and to talk to your CPA or atax professional about that because that can potentially make a big difference atthe end of the year as to how
much money you actually end up putting in yourpocket so if you found value in this video if you learned something new orsomething thought-provoking please feel free to go ahead and share this video byclicking on the share button below that's really the best thing you can doto encourage me
to continue to create more free tutorials for you alsosubscribe to the YouTube channel so that you can get notified every time Irelease a new trading video click the thumbs up icon and leave a comment Ilove your comments by the way I really enjoy those as a special offer
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