The futures market lies in the agricultural markets of the 19th century. Farmers began setting up contracts to deliver goods, and this was done to stabilize the supply and demand during off seasons. Over time, the futures market has evolved to cover much more than just agricultural products. It is a global market of all sorts of commodities which includes manufactured goods and treasury bonds. A futures contract states exactly what price will be paid for a product on a specific date. When trading begins, the trader is selling the contract for goods, and not the actual goods.

In a futures contract there is a buyer and a seller. The buyer takes the long position in the market, while the seller takes the short position. The specifics of the contract are the buying price, the quantity, and the actual delivery date. With the futures market, the speculators hope to buy the contracts for goods at a profit from the daily fluctuations for the price of goods within the market.

The forex market has several advantages over the futures market. The forex is a more liquid market, and it is much larger than the futures market with many more trades each day. Forex stop orders can be executed more easily and their is less slippage with the trade. The foreign exchange market is open 24 hours a day while the futures market is only open for about 7 hours per day.

The foreign exchange market is commission free with brokers only making money off of the spread on the market. With the futures market, traders must pay a commission to a broker on each futures transaction that they enter into. All of the forex transactions are executed instantly, because of the very high volume of trading. This minimizes any slippage in the market and give you a better chance of buying the various currencies at the actual rates that you were quoted.

Their is a market gap and slippage in the futures market which can result in a debt to the trader. The forex market is less risky because they have many safeguards that protect their traders.