2019-07-04

A game in forex market

In the foreign exchange market, the change in the amount of value represented by the fluctuations in the exchange rate and the change in the value of the stock are completely different. This is because the exchange rate is the exchange ratio of the two currencies, and the change in the exchange rate is the reduction of the value of the currency. And the increase in the value of another currency.


For example, more than 20 years ago, one dollar was convertible to 360 yen. At present, one dollar can only be exchanged for 114 yen, which indicates that the value of the yen has risen and the value of the dollar has declined.


In terms of total value, it will change, it will not increase value, and it will not reduce value.


Therefore, some people describe the foreign exchange is "zero-sum game", or rather the transfer of wealth. In recent years, more and more funds have been invested in the foreign exchange market, and the volatility of the exchange rate has been expanding. The scale of wealth transfer has become larger and faster, and the speed has become faster and faster.


Calculated by the amount of global foreign exchange of 3 trillion US dollars per day, up or down 10%, that is, 30 billion yuan of funds to be replaced by new owners.


Although the foreign exchange rate varies greatly, any currency will not become waste paper. Even if a certain currency keeps falling, it will always represent the determined value unless it is declared abolished. Note: Zero-sume-game, the concept of game theory, means that in both sides of the game, the benefit of the party must mean that the party suffers. (Foreign Exchange Weekly)


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