Forex Trading and Exchange Rates:
"Foreign exchange transaction" refers to transactions between different currencies (USD against yen, euro against yen, US dollar against sterling, etc.); "exchange rate" refers to the ratio of different currency prices in foreign exchange transactions. The exchange rates provided by banks and other financial institutions are almost fixed every day. But in fact, in the international foreign exchange market, the exchange rate is constantly changing every second.

Forex Trading Market:
The so-called foreign exchange trading market does not refer to specific places such as exchanges. Foreign exchange trading (FX) is a one-to-one relative transaction between market participants such as banks, securities companies, and foreign exchange intermediaries, mainly through telephones, computers, etc. This includes the trading market between financial institutions such as banks and the trading market between financial institutions, securities companies, etc. for customers (corporate entities, institutional investors, individuals).

24-hour foreign exchange market:
Since foreign exchange transactions (FX) are conducted all over the world, it is a huge market with chain links in terms of time, price, etc. Because of this, foreign exchange transactions can be conducted 24 hours a day, except for days when financial institutions in various countries are closed, weekends (Saturdays and Sundays) and New Year's Day. Trading is most active during the business hours of financial institutions in various countries. The daily market starts from New Zealand, moves to Japan and other Asian countries, the Middle East, Britain and Germany and other European regions, and finally to the United States. Due to the time difference, active trading sessions continue 24 hours a day. Times when trading is particularly active are called "○○ markets." Among them, the New York market, London market and Tokyo market are called the three major markets. Although the foreign exchange market is a 24-hour open market, in principle, there is no trading on the interbank market when financial institutions in various countries are closed, on weekends (Saturdays and Sundays), and New Year's Day, because no financial institutions participate in the interbank market. .

Exchange rate views:
The exchange rate is usually expressed as: 1 US dollar = "100.00-07". This does not mean that the US dollar is trading between 100.00 yen and 100.07 yen, but that the selling price is "100.00 yen" and the buying price is "100.07 yen". The former is called "Bid", the latter is called "Ask", and the method of providing both buying and selling prices is called "2Way", which is the most common exchange rate expression in foreign exchange transactions.

The meaning of high yen/low yen:
Yen high/yen low refers to the fluctuation trend of the yen relative to other currencies. When the yen rises relative to other currencies, it is called a high yen; on the contrary, when the yen falls, it is called a low yen. For example, when a Japanese buys imported goods priced at US$500, if US$1=100 yen, he or she needs to pay 50,000 yen; if US$1=110 yen, he or she needs to pay 55,000 yen. If 1 U.S. dollar rises from 100 yen to 110 yen, it means that the value of the yen has decreased, and the same imported goods worth 500 U.S. dollars have to pay 5,000 yen more to buy. On the contrary, from the relationship between the US dollar and the yen, a lower yen means a higher US dollar. In the above example, because the US dollar has risen, Americans can earn 5,000 more yen for the same US$500 of exported goods.

Causes of exchange rate changes:
According to the textbook, "In the foreign exchange trading market, various market participants conduct transactions according to their own ideas and needs. The resulting balance of supply and demand for foreign exchange causes the exchange rate to fluctuate." But purely from the perspective of the purpose of market participants, the ultimate goal is to "want to make money but not lose money." The basic principle of making money through foreign exchange trading (FX trading) is to "strive for the currencies of strong countries and reduce the currencies of weak countries." The so-called "strong country" refers to a country with stable economy and politics. Market participants buy and quote the currencies of "strong countries" and sell the currencies of "weak countries" based on their judgments on financial interests and the country's economic growth, fiscal soundness, war, terrorist organizations and other geopolitical aspects. .

Swap Interest:
Swap interest is the difference between currency interest rates in different countries after adjustment. In principle, swap interest will be charged when buying a currency with a high interest rate and the settlement date is extended. On the contrary, swap interest will be paid. If the settlement is made on the same day, no swap interest gain or loss will occur. The number of days for calculating swap interest varies depending on national holidays, etc. Basically, when the settlement day is extended from Wednesday to Thursday, 3 days of swap interest will be generated, and 1 day is generally charged for other business days.