Introduction:
Foreign exchange speculation refers to foreign exchange transactions for the purpose of making profits. Speculators take advantage of exchange rate differences to buy at low prices and sell at high prices, thereby earning the price difference.
Features:
1. There is a market but no market
Foreign exchange trading is carried out through a merchant network that does not have a unified operating market. It is not like stock trading. Centralized unified location. However, the foreign exchange trading network is global and has formed an unorganized organization. The market is connected by everyone's recognized methods and advanced information systems. Traders do not have membership in any organization, but must obtain the same Industry trust and recognition. This kind of foreign exchange trading market without a unified venue is called "market without market". The global foreign exchange market averages trillions of dollars in transactions every day. Such a huge amount of money is liquidated and transferred without the control of a centralized place, a central clearing system, or government supervision.
2. Cyclic operations
Due to the different geographical locations of financial centers around the world, the Asian market, the European market, and the American market are connected into a 24-hour continuous operation due to the time difference. Jobs in the global foreign exchange market. The New York market opens at 8:30 a.m. (based on New York time), the Chicago market opens at 9:30 a.m., the San Francisco market opens at 10:30 a.m., the Sydney market opens at 18:30 a.m., the Tokyo market opens at 19:30 a.m., and the Hong Kong and The Singapore market opens, the Frankfurt market opens at 2:30 a.m., and the London market opens at 3:30 a.m. With such 24-hour operation, the foreign exchange market has become a day and night market. The foreign exchange market will only be closed on Saturdays, Sundays and major holidays in various countries. This continuous operation provides investors with an ideal investment place without time and space barriers, and investors can find the best time to trade. For example, if an investor buys Japanese yen in the New York market in the morning and the Japanese yen rises after the Hong Kong market opens in the evening, and the investor sells in the Hong Kong market, no matter where the investor is, he can participate in any market at any time. Buy and sell. Therefore, the foreign exchange market can be said to be a market without time and space barriers.
3. Zero-sum game
In the stock market, if a certain stock or the entire stock market rises or falls, then the value of a certain stock or the value of the entire stock market will also Rise or fall, for example, Japan's Nippon Steel's stock price fell from 800 yen to 400 yen, so the value of all Nippon Steel's stocks was also reduced by half. However, in the foreign exchange market, the change in value represented by the fluctuation of the exchange rate is completely different from the change in the value of the stock. This is because the exchange rate refers to the exchange ratio of the currencies of two countries, and the change in the exchange rate is the decrease in the value of a currency. An increase in the value of another currency. For example, 22 years ago, 1 U.S. dollar was exchanged for 360 yen. Currently, 1 U.S. dollar is exchanged for 120 yen. This shows that the value of the yen has increased while the value of the U.S. dollar has decreased. In terms of the total value, changes will not increase the value. , nor does it reduce value. Therefore, some people describe foreign exchange trading as a "zero-sum game", or more precisely, a transfer of wealth. In recent years, more and more funds have been invested in the foreign exchange market, and the exchange rate volatility has been expanding day by day, which has prompted the scale of wealth transfer to become larger and faster, and the speed has become faster and faster. Calculated based on the global foreign exchange transaction volume of 1.5 trillion US dollars per day, If it rises or falls by 1%, 150 billion funds will need to change to new owners. Although foreign exchange rates vary greatly, no currency will become waste paper. Even if a currency continues to fall, it will always represent a certain value unless the currency is abolished.