In the foreign exchange market, there is a traditional forward foreign exchange trading method, which is similar to forex futures trading in many aspects and is often mistaken for futures trading. It is necessary to make a simple distinction between them here. The so-called forward foreign exchange transaction refers to the transaction method in which both parties agree to settle a certain amount of foreign exchange at the exchange rate determined at the time of transaction at a certain date in the future. Forward foreign exchange transactions are generally made by banks and other financial institutions by telephone or fax. The number, duration and price of transactions are freely agreed, which is more flexible than foreign exchange futures. When hedging, forward trading is more targeted and can often hedge all risks. The price of forward trading does not have the openness, fairness and impartiality of futures prices. Forward trading has no intermediary between exchanges and clearing houses, and its liquidity is much lower than that of futures trading, so it faces the risk of default of its opponents.

The difference between forward foreign exchange transactions and spot foreign exchange transactions lies in the different delivery dates. All foreign exchange transactions with a delivery date of two business days after the transaction are forward foreign exchange transactions.