The differences are:
1. With FX Futures you are trading 1 currency ie: Us Dollar or EuroFX whereas with Forex you are trading pairs (Eur/Usd, Gbp/Usd etc...).
2. Futures markets (like the stockmarket) are very gappy and can have very big bars. This means you have to have far bigger stops and increase the likelyhood of being stopped out.
In contrast the Forex market is very fluid. You don't have gappy price action so stops can be somewhat smaller and the trends are very smooth (apart from when price is in a range).
3. Futures markets can be manipulated. Floor traders can see where your stops are and can/will stophunt you whenever they can by buying or selling a lot of contracts in order to move price. These are people with very big pockets and can move the market on a whim. This is part of the reason for the big bar/gappy scenario.
Probably the number one reason people trade SpotFXis because Forex is very heavily advertised. It's the new 'fad' if you like.
One good way to trade Forex however involves the correlation between Currency Futures and Forex pairs.
For example you might get a warning of the finish of an uptrend early on say the Eur/Usd pair.
The reason is it might be trending nicely but a reversal signal will sgow up on the USDollar chart. Therefore you could position yourself early ahead of a change in trend.
Overall it's been said (and is quite true) that the Forex market offers all of the benefits of other financial markets with none of the drawbacks.
People lose there money for a number of reasons:
- They choose a small start up broker or a dealdesk
- Undercapitalisation
- Blaming bad trades on everyone but themselves (though there are genuine cases but usually always involve dealdesks
- Jumping in too soon before the are consistently profitable on a demo
Hope this helps - Happy Trading!