Perhaps one of the most popular methods of trading currency over the past few years has been spot Forex trading and its ability to give traders increased leverage and flexibility when taking their currency positions. Many critics have argued that spot Forex trading is very difficult to implement as a viable long-term strategy and is only a technique that is used by short-term speculators and Forex gamblers. The truth is that spot Forex can still be a part of a larger and more comprehensive trading strategy as long as the currency trader knows how to use the technique properly. Many traders who only use spot on an intermittent basis can never get a good feel for how the actual movements in the foreign exchange market are contingent on competing forces.

These traders often do not put the time in to research and analyze such forces and rather just simply rely on the leverage that spot affords them to take certain positions and then hope for the best. This can work, but the best use of spot is as a part of a larger strategy that has been proven to work for other traders in the past, and while you can experiment with spot, it can be difficult to see any kind of steady returns due to the amount of volatility that is present on the foreign exchange market.

Many people either get confused or are unsure of whether to use spot Forex trading or Forex futures as part of their overall strategy. This is a common occurrence because the two are very similar and they both can actually provide parallel results if they are used by taking comparable positions. The main difference between spot and futures is that with futures the actual trade of currency will only take place at the preset date and time that is in the future. This usually results in no exchange of actual currency, as the majority of traders who utilize futures are simply speculators who will not follow-through on the specific exchange date.

With spot Forex the exchange happens when the actual contract is created at the point of trade even though a date and time is setup the same way as it is with futures. With spot the trading positions that are created with the establishment of the contract are not often held onto longer than about a day. This has made spot Forex trading a short-term technique that can be more widely used as part of a larger strategy if the trader sets it up that way. This is how the majority of spot traders use the technique to make a regular profit, and only using it irregularly is not what some of the most successful spot Forex traders do. It is ok to experiment a bit at first to see if you like the way spot works and especially if you've been trading futures for a long time. If you have had success with spot then you should not hesitate to make it a part of your larger strategy as this will increase your chances at making a regular profit with your currency trading business.

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