Benefits of Forex Trading Market

The currency exchange market has many factors that make it distinctive. Currency exchange has been described as almost pure competition exists on financial market, though the global banks and financial institutions attempt to have a power over it and influence it. However what makes it so unique, and why you should believe that you can make more money on the foreign exchange market than other types of asset trading such as stock trading? Why do automated forex trading methods like Forex Megadroid reported to have built lot of money to many people? We are going to find out.

Trading Volume
The total cash traded on the FX trading market each day is immense. The typical daily turnover all over the world is approximately US$ Four trillion, according to a survey by International Settlements Bank in 2007. The leading Fx trading center is in London UK, followed by New York and Tokyo, Japan. However, the US dollar is the most traded currency in the world foreign exchange market.

Liquidity
The liquidity of a product is its ability to covert to money without diminishing its value. Money is already money, so it is more liquid than any other asset. That means currencyit is very easy to trade.

World Wide Market
Forex is not limited to one location but around the globe. This means that, although it is affected by national events in the biggest financial powers, the effects are balanced out. Dollar does not have absolute value: a currency’s value can only be calculated comparing with another currency. Hence if one currency falls in value, another will rise.

Compare this with the stock exchange where it is possible for the value of every company’s stock to drop at the same time. All you can do in a major stock market crash is to withdraw your investment. But in forex, you can switch from the falling currency to the rising currency and still make money.

Round the Clock Market
Foreign exchange can be traded in any part of the world 24 hours a day, five days a week. The forex trading market opens in Sydney, Australia, where it is Monday morning, and closes at USA in New York, where it is Friday afternoon. So whatever time of day or night you want to trade, you will have the opportunity, unless your only free time is on weekends.

Market Leverage
What you mean by Leverage? Leverage is where a small amount of something can be used to control a bigger amount. In forex trading, leverage is linked to the method of trading on margin. You supply a small amount in your brokerage account and your broker lends you the remaining, so that you do not have to spend the full value of your position. Example, you could invest $500 to control US$5000.

Moreover you also have the ability to trade in different forex pairs in the market. Forex trading offers more leverage than stock or futures trading. You might be able to manage up to two hundred times your investment, depending on the your broker. The more the leverage, higher is your chance of bigger profits, but of course, there is also the risk of bigger losses. If you are just starting out you should not opt for the maximum leverage on the FX trading market.