Forex vs. Futures – Strong Differences In Performance

What struck me directly there is the clear difference in performance.

The runner-up in forex trading would not even have made it into the TOP 5 in futures trading.

But this striking difference in performance was not only this year, but also in all other years before.

This raises two questions for me:

  • Are there generally the better traders in futures trading?
  • Is forex trading more difficult than futures trading?
  • Are there generally the better traders in futures trading?

Of course you can’t generalize that way, but I would answer this question with a yes.

Because, and we will come back to this in detail in a moment, Forex trading is “harder” than futures trading.

And experienced traders know this and therefore avoid the Forex markets.

Therefore you will always find the more successful traders in the futures area.

This does not mean that there are not also good Forex traders, but especially traders who have experience in proprietary trading, market making, etc., usually trade futures.

Is Forex trading more difficult than futures trading?

The answer is definitely yes.

The Forex market is much larger and more complex than the futures market.

In the case of foreign exchange, there is correlation among themselves, as well as many other external influences that make trading difficult.

There are also too many different market participants and interests.

In addition, this is one of the main reasons why professional traders deal with futures and hardly any with Forex.

Forex is not traded on an exchange, it is an OTC market. Therefore every broker has different charts and prices.

You never know where exactly the truth is at the moment, and especially in trading it is essential to have exact price data available.

You only have to look at the charts of different brokers in the smaller time window and everyone will see that the charts look different.

Furthermore, there is no volume, order book or time & sales. The Forex trader therefore has less information available.

Also, the stops are visible from the selected broker and therefore the incentive to fish these orders is great.

I could already get an insight into some proprietary trading houses and there I have never seen a single Forex Trader.

On the other hand, there are a lot of proprietary trading houses that only trade futures.

The advantages of Forex trading

Despite the many advantages of futures trading, Forex trading also has its advantages.

The entry barriers are extremely low.
There is no minimum margin to start trading.
Therefore Forex trading is also suitable for smaller accounts.

In addition, the risk per trade can also be set exactly to the euro. This is not the case with futures trading.

Also, with forex trading you don’t have to incur additional costs for real-time data.

The complexity of the Forex market also brings its advantages.

One learns to understand the world a little bit better through Forex trading.

Over time, you learn more and more about macroeconomics, international trade and politics.

You get to know something of the world besides trading.

In futures trading this is only limited.

The Forex market and its fallacies

The Forex market is the market with the most traded volume, and this is what makes the Forex market so attractive to many. But especially for people who have a conflict of interest. In no other market is the number of people with a conflict of interest as large as in the Forex market.

By this I mean brokers, sales people and so-called trading coaches.

They all have only one interest. They want to make money, and usually at the expense of the others.

The Forex market is popular among retail traders and at the same time contains so many mistakes.

Many false claims are made, which only benefit those who can profit from them.

A widespread assumption is that performance can only be improved by making more trades.

Since many people in the Forex industry receive volume-based payment, traders are told that a high trading frequency is necessary to achieve better performance.

Day trading in Forex is widespread. However, few traders trade profitably, except for the brokers and those who encourage people to open a new account.

Any instructor who explicitly advertises for a Forex or CFD broker, for example, has a conflict of interest.

An equally widespread assumption in Forex is that it is suitable for continuous trading due to the continuous trading hours.

But this is not true.

As a rule, only those currency pairs for which the respective stock exchange is currently open are suitable for active trading.

Seizing trading opportunities at the right times

If you look at the times with the highest volatility for the individual currency pairs, you will see that the volatility is almost always highest during the opening hours of the respective stock exchanges.

And as a trader, it is all about identifying trading opportunities. These always arise through volatility.

Of course, in the EUR/USD currency pair, for example, there are “trading opportunities” at night, but the better trading opportunities will usually always arise during the day.

And as a trader, it is always a matter of having a statistical advantage.

Therefore, it makes sense to trade the respective currency pairs predominantly only when the volatility is statistically highest. Especially in Forex day trading.

In addition, it is often claimed that institutional traders in Forex also only work with charts.

This is not true. With institutional traders, the trading approach is usually at least 70% fundamental and only 30% chart oriented.

Every large hedge fund that trades Forex usually follows a Global Macro approach.

Swing trading does not necessarily require fundamentals either, but in the longer term the price is driven by fundamental influences and not by chart technique.

Conclusion of my comparison of future versus forex

Forex and futures are interesting markets for traders. Both offer many opportunities.

However, the futures market is much more suitable for day trading, and therefore there are significantly more successful day traders in futures than in forex.

Also, the potential performance in the futures market is usually much higher than in Forex trading.


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