Forex, Shares, Bonds, Futures and CFDs Differences

Forex, Shares, Bonds, Futures and CFDs Differences

Almost every day new financial products are promoted by banks and brokerages to help investors diversify their investment portfolio. So, if you want to invest, in this article we will discuss the differences between asset classes like shares, forex, bonds, futures, and Contracts For Difference (CFDs).

💹 The financial markets are expanding in the range of products available making it harder for investors to choose with so many options available.

For reasons like these, investment managers and professional traders may employ automated trading systems such as using Artificial Intelligence (AI) 🤖 as we do with our Wiseinvest automated AI trading and AI forex signals system.

What you will learn ahead 🎓

  • Understanding the forex trading history
  • Real assets vs financial assets
  • The difference between forex and shares
  • Why bonds are not the same as forex
  • Futures markets compared to forex
  • Off-exchange traded and CFDs
  • How to use AI to invest and take advantage of the market
  • What are the best forex brokers to trade?

📚 Having financial skills can bring success in your professional and personal life. We always recommend learning more about finance and trading.

🎯 Our mission is to help you invest efficiently and improve your outcomes. Get valuable trading ideas from leading finance experts on the trading Academy and our free forex Telegram channel.

💹 When investing in forex, we suggest you consider long term results.

When forex trading began. The history of money matters! 🗿

Accord to Wikipedia, currency came into existence in ancient Mesopotamia, in the form of a receipt that represented a stored commodity such as grains.

This use of receipts backed by grains is comparable to how the US Dollar 💵 used to be backed by Gold, and then Silver.

Eventually, in ancient times metals were used instead of paper receipts, and precious metals like gold and silver coins became real assets and a form of money.

The issuer of metal currencies also retained the right to collect taxes for a specific region from owners of the currency. In addition to collecting taxes from sovereign currencies, monetary policy was implemented by auctioning currency at a value that approximated the tax available in that region.

Fast forward to more modern times and exchanges such as national stock markets have existed for hundreds of years already, with the Amsterdam stock exchange first founded in 1602.

Real assets versus Financial assets 🧐

It’s important to note that a paper receipt in ancient Egypt is considered a financial asset, while the underlying grain held as collateral for the currency is the Real asset.

Thus, in today’s investment environment, many stocks, bonds, CFDs, and forex trading represent financial assets, whereas buying property or a new business can be considered an investment in real assets.

Furthermore, when products are created based on the value of financial assets, they are usually classified as derivatives, which can add to the level of product complexity.

Unlike stocks or derivatives, the forex market today is the largest globally, with nearly $6 trillion in average daily volume, according to April 2019 data from the Bank for International Settlements (BIS).

💡 😉 Would you like to learn more about forex trading? In this article, we cover all about the forex.

Forex is a highly-efficient market and technology helped to improve transparency, market integrity, and the safety of participants. Wiseinvest chooses forex trading as the main asset class as it also helps us in the decision-making process used in Wise automated AI trading.

The difference between forex and shares 🧐

Another very important financial product shares, which is a financial asset that represents the equity in some underlying real assets. The first-ever publicly-traded stock was the shares of the United East India Company (Dutch: Vereenigde Oostindische Compagnie; VOC) established in 1602.

Shares are quite different from other products, such as forex. Firstly because shares represent equity in a company, whereas forex represents the currency of an entire country.

Secondly, shares are strictly traded on specific localized exchanges, whereas forex is decentralized. Shares may be more regulated, whereas forex has varying levels of regulation in different parts of the world.

📌 Some benefits of shares are the right to receiving dividends every time the company makes a profit, for companies that declare to pay dividends. Comparably, holding cash currency in a bank account can earn interest, and rates varying in different parts of the world.

Also, holding shares can convey rights to an investor, such as the ability to vote or earn a board position, depending on the percentage of shares they own.

Lastly, shares are a primary market, where you buy the assets themselves, and not the right to buy or sell an asset, such as in the case of the options markets.

Why bonds are not the same as forex

Another type of financial asset is bonds, which can be corporate bonds or government-issued 🏛.

Bonds are a form of debt instrument, as the investor lending their money to the bond issuer, in return for a fixed rate on their principal, and for their principal plus interest to be redeemed when the bond matures.

Some investors prefer to earn a fixed rate of return over a specific time-frame, which is where investing in bonds can have its place in a trading portfolio.

Bonds can vary in levels of risk from ultra-safe all the way to junk bond status. Also, some bonds come with other restrictions such as limited liquidity making it difficult to exit a position early, compared to US treasuries, which are highly liquid and a safe market for bond investing.

However, trading US treasury bonds is not the same as trading the USD 💵 currency in a forex pair.

Futures markets compared to forex

The futures markets were created to transfer risk away from commodity producers and those who have a need to use a commodity but do not wish to have risk associated with its potential future price change.

In an attempt to avoid price uncertainty of the future, the owner of a commodity 🛢 can hedge away the risk by transferring it to a speculator who acquires a futures contract from the hedger.

In other words, if a farm produced 100,000 bushels of corn at a total cost of $3.72 but was concerned that a price decline would cause them a loss before they can sell it next month, the farmer could buy a short futures contract which would profit in the event of a price decline in corn.

💡 The example just given is a form of hedging, as any profit made on the futures contract would be offset by a loss on the corn held in storage. The counterpart on the opposite side of the trade is a speculator, hoping the price of corn increases.

While futures originated to be used to hedge positions in agriculture, there are futures contracts today available across a wide range of products, from precious metals and energy to new digital currencies.

Exchange-traded futures contracts have a predefined exercise price and a specific quantity of an asset at a future date, and their outcome depends on the spot price in the future. Unlike forex, the futures market is much smaller and doesn’t offer the flexibility that off-exchange forex trading provides.

Off-exchange traded and CFDs

Financial products that are based on the price of other financial assets are known as derivatives.

Like forex, which is traded over-the-counter in the off-exchange market, there is a type of trading instrument known as a CFD (contract for difference), which allows you to speculate on the price of some underlying asset, without having to buy it directly.

CFDs simply track the underlying price of a particular asset and are offered by online brokers.

💡 For example, a trader may wish to have exposure to the price of shares of Microsoft, but without having to own Microsoft shares directly.

This is where CFDs are popular for traders, as it allows them to enter and exit the market quickly, and not have to deal with voting rights and other obligations associated with owning shares.

Besides, CFD trading can be done on other asset classes, such as the bond market, commodities, futures, and even forex.

And like forex, CFDs are usually traded from a margin account, which means traders can access various degrees of leverage, which can equally increase both potential profits and potential risks.

To keep up with so many kinds of investments you need time and the right educational information available. Follow the Wiseinvest forex Academy to stay updated, and subscribe to our premium signals to receive real-time trading opportunities via email.

Wise AI Trading and AI forex signals can complement your investment strategy. Subscribe today and compare the results with other investment opportunities.

We believe the best way to increase returns when trading forex is by following trading signals created with proper risk management. That’s why we created Wise forex signals, so you only need to check your email inbox and copy-paste the signals into your forex brokerage account.

The best way to trade forex

There are two ways to invest with our AI in forex:

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

automated trading with ai bot

By trading forex automated with AI, you will save time and improve your performance without monitoring the market and managing trading platforms.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account every time that our AI system identifies a new worthy trading opportunity. You can monitor the AI trading performance in real-time directly on our dashboard.

Automated AI trading benefits ✅

  • Setup in 3 minutes.
  • Totally hands-off, from anywhere.
  • Invest from just $100.
  • APY of 40% over the past 13 years*.
  • Lightning-fast execution & no slippage.
  • No commissions, no management fees.
  • Portfolio with 40 different automatic strategies.
  • No MT4/MT5 or other platforms required.
  • Test with a risk-free practice account.
  • Trading results directly on our dashboard.

Don’t you have a broker account yet? Our AI is integrated to trade automated with FXCM. Click here to open an account with FXCM. It is one of the best forex brokers in the world.

2. Manually with AI forex signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5, and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, to match the performance of the signal as close as possible.

Each AI forex signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

Check out how to trade with our AI forex signals.

  1. Subscribe to a Wise-Plan.
  2. Open a Brokerage account. Check this article about the best forex Brokers.
  3. Set an amount and a position size on our Wiseinvest dashboard.
  4. Our AI will send you real-time trading alerts by email and Telegram.
  5. Copy the signals and paste them into your Brokerage account.

All forex signals are sent every time that our AI trading system identifies a new trading opportunity. Our trading strategies are developed on a variety of time frames such as 4 and 8 hours.

Wiseinvest AI forex signals are Market Orders and you do not need the entry price. You can copy each signal while it is available on our dashboard. We do this way to assure that traders will just place signals while they are good to be traded.

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate pips and change the leverage in your forex broker account. Learn more about leverage in forex trading by clicking here.

What is the AI performance in forex trading?

The Win Rate of our AI moves as shown by the period and can reach up to 95%. The introduction relies upon the capable wild estimation metric, which infers that our model is valuable at whatever point the Win Rate is more noticeable than 60%. All methods of our AI trading system search for stable returns and sufficient results to achieve an ordinary return of 40% consistently (APY), without the usage of high impacts.

We appreciate that what is significant in forex trading is the definitive result. Thusly, the money related master needs to consider that Win Rate isn’t commonly the best estimation to measure execution in forex, as other signals providers uncover. For instance, out of 100 trades, solitary 1 trade may be an adequate disaster to make the 99 trades not gainful. For this circumstance, the Win Rate would be 99%, yet the convincing result would be unfeasible (negative).

We revolve around the appearance of 40% of APY and not just on Win Rate.

It is essential to see that forex brokers may charge spreads, commissions, and overnight costs in your trading account, and these components can impact the AI execution. You can check our forex trading history to see more about AI trading execution by clicking here.

How much do I need to trade forex with AI?

You can start in forex trading with free AI forex signals or AI trading record and make a store from just $100 in the broker. It is moreover possible to test using a danger-free practice account with our AI trading structure. Regardless, to do a capable peril, the board in authentic records, we suggest you start from at least $100. Notice that some forex traders require assorted beginning stores to trade forex.

What is the trading strategy of our AI?

Our AI methodology is the blend of different AI trading structures, with more than 100 features, that portray 40 particular procedures which simultaneously consider: Quotes of the 28 forex pairs, Supports, and Resistances in different timeframes, Trends and Counter-designs, Cross-markers, Index of each pair, Economic Calendar, Investors Sentiment.

Our AI looks at those fundamental, technical, and sentiment factors that impact forex trading, and all models are surveyed constantly using different burdens. In the wake of completing the examination, the choice of the signal transmission procedure is made considering the improved likelihood of flashing advantage and the total open for theory.

Using technical analysis, our count considers not simply the instances of various examples, including sponsorship and deterrent levels and cross-pointers, yet our AI is moreover prepared to make its own progressing record for each cash pair, that is used to recognize what is the best course and target.

Practically identical to fundamental analysis in forex, the AI makes an association inside the budgetary calendar to find news data that can impact express money sets.


  • There are lots of different kinds of financial products, to choose wisely you need to know what your objectives are and follow relevant content.
  • With the right trading tools and technology, you can find trading opportunities across various markets, through subscriptions such as Wise AI trading system optimized for select forex pairs.

If you do not have time to research so many financial products, follow Wiseinvest Portal to stay up to date with the latest market opportunities.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. FXCM warns that 74.74% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.