Many people do not know the difference between spot forex trading and forex futures trading, and although this confusion is understandable, the fact is there are only a few slight differences between the two. Both futures and spot trading give the forex trader the ability to secure a chosen position at some future date and time.

With forex futures the exchange of currency doesn’t occur until the preset date and time that is set in the contract; with spot forex the exchange of currency happens the instant the contract is established (by entering a trade). This is the primary difference between the two methods and essentially makes spot a short-term technique that if used wisely can increase your leverage points, but only at the expense of being very active within a particular market.

The majority of people that utilize futures will not actually follow through with the exchange of currency on the actual date and time that is set up with the initial contract, and the majority of traders who use futures are ultimately speculators who don’t ever have any real intention of making any real trades.

Both spot and futures can give a trader an increased amount of leverage if they are implemented correctly, and while many traders like to think that they are using these techniques the right way, many are using guesswork and gut feelings.

The best way to learn how to use both spot and futures correctly is to study real-time examples in order to see how some of the more skilled traders are actually making money with both methods.

Doing this will ensure that you don’t waste your time implementing each one of these without an overall strategy, and hopefully you will then begin to make more money.