1. The purpose of foreign exchange trading is to meet the needs of commodities and other transactions, and to pursue the preservation of currency rather than profit from exchange rate changes.

2. Participants in the foreign exchange market mainly include central banks, commercial banks, non-bank financial institutions, brokerage companies, self-dealers and large multinational enterprises. They trade frequently and the transaction amount is huge, each transaction is in the millions of dollars, even exceeding10 million dollars. Participants in foreign exchange transactions can be divided into investors and speculators according to their trading purposes. In China, designated foreign exchange banks refer to banks that handle foreign exchange settlement and sale, such as China Bank, China Industrial and Commercial Bank, China Construction Bank, China Agricultural Bank and other 65,438+06 banks and branches established by foreign banks in China. Designated foreign exchange banks mainly participate in the business activities of the foreign exchange market in three aspects:

1) foreign exchange trading on behalf of customers;

2) conducting foreign exchange transactions between banks to adjust their foreign exchange positions;

3) As a "market maker", it plays the role of organizing and creating the foreign exchange market, taking advantage of the fluctuation of the foreign exchange market to make profits.

Risks of foreign exchange transactions:

1) capital risk: the most important issue for investors in the investment process is capital security, but there are still some imperfect rules and regulations in foreign exchange transactions, which may pose a threat to investors' funds;

2) Market risk: The foreign exchange market has no fluctuation range limit and operates 24 hours a day. Moreover, there are many reasons that can affect the foreign exchange trend, which makes it more difficult to judge the foreign exchange trend. Therefore, unexpected exchange rate fluctuations may occur, causing heavy losses to investors;

3) High leverage risk: the use of high capital leverage in foreign exchange transactions will increase the investor's loss ceiling. In the case of high leverage, even if the reverse change of foreign exchange transactions is small, it will cause great losses to investors;

4) Network risk: Due to the openness and instability of the Internet, there may be errors in the trading system, which will cause investors to fail to trade normally, thus causing unpredictable losses to traders.