In recent years, the reason why the foreign exchange market has been favored by more and more people and has become the new darling of international investors is closely related to the characteristics of the foreign exchange market itself. The main features of the foreign exchange market are:
(1) There is no market
The financial industry in western industrial countries basically has two systems, namely, a central operation for centralized trading and a business network without a unified fixed location. Stock trading is bought and sold through an exchange. Like the New York Stock Exchange, the London Stock Exchange, and the Tokyo Stock Exchange, which are the main trading venues for stocks in the United States, the United Kingdom, and Japan, the quotations, trading hours and settlement procedures of centralized financial products have unified regulations. And established the industry association, formulated the industry code. Investors use brokerage companies to buy and sell required commodities. This is "there is a market and a market." Foreign exchange trading is carried out through a network of merchants that do not have a unified operating market, unlike stock trading with a centralized and unified location. However, the network of foreign exchange transactions is global, and an unorganized organization is formed. The market is connected by an agreed method and advanced information system. Traders do not have membership of any organization, but they must obtain the same The trust and recognition of the industry. This kind of foreign exchange trading market without a unified venue is called "there is no market." The global foreign exchange market averages trillions of dollars in transactions every day. Such a huge amount of funds is cleared and transferred in this kind of neither centralized place nor the control of the central clearing system, and without the supervision of the government.
(2) Cycle operation
Due to the different geographic locations of the world’s financial centers, the Asian, European, and American markets have become a global foreign exchange market that operates continuously 24 hours a day due to time differences. The New York market opens at 8:30 in the morning (based on New York time), the Chicago market opens at 9:30, San Francisco opens at 10:30, Sydney opens at 18:30, Tokyo opens at 19:30, and Hong Kong opens at 20:30. Singapore opened, Frankfurt opened at 2:30 in the morning, and the London market opened at 3:30. With such a 24-hour operation, the foreign exchange market has become a day and night market. Only on Saturdays, Sundays and major holidays in various countries will the foreign exchange market be closed. This continuous operation provides investors with an ideal investment place without time and space barriers. Investors can find the best time to trade. For example, if an investor buys yen in the New York market in the morning, the yen rises after the Hong Kong market opens in the evening, and the investor sells in the Hong Kong market, he can participate in any market, at any time, regardless of where he is. Buying and selling. 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, the value of a certain stock or the entire stock market also rises or falls. For example, the stock price of Nippon Steel in Japan falls from 800 yen to 400 Japanese Yen, so that the value of all Nippon Steel’s shares has also been reduced by half. However, in the foreign exchange market, the change in the amount of 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 two currencies, and the change in the exchange rate is also a 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. At present, 1 U.S. dollar was exchanged for 120 temporary yuan. This shows that the value of Japanese yen has risen while the value of U.S. dollar has fallen. In terms of the total value, it changes from time to time and does not increase value , It will not reduce the value. Therefore, some people describe foreign exchange trading as a "zero-sum game", more precisely the transfer of wealth. In recent years, more and more funds have been invested in the foreign exchange market, and the volatility of exchange rates has increased. The scale and speed of wealth transfer have become larger and faster. Calculated by the daily trading volume of 1.5 trillion US dollars in global foreign exchange, A rise or fall of 1% means that 150 billion of funds have to be replaced by new owners. Despite the great changes in foreign exchange rates, any currency will not become waste paper. Even if a currency continues to fall, it will always represent a certain value, unless the abolition of that currency is announced.