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Brown Brothers Sketches The Evolution Of The FX Market
Since FX trading is rapidly eclipsing stocks as the main market of choice for retail investors, it is useful to chart how the foreign exchange market has developed over time. Below, we present a recent comprehensive summary on the evolution of the foreign exchange market written by Brown Brothers' global head of currency strategy Marc Chandler.... Cause in today's centrally planned world, you either have 5,000x leverage on every trade, or you are too little to be bailedout.
Thoughts on the Evolution of the Foreign Exchange Market (pdf)
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So how long until High Frequency Trading destroys this market too?
How long? I don`t know, but there is plenty of FX HFT going on already. There are a lot of black boxes also scalping the crosses. I understand more than one ME CB is running such a magic box.
BIS and Brown Brothers (where's the Harried Man?). Wow!
Talk about the thief teaching the judge how to dispense justice. I understand that Marc Chandler must be working in good faith, but these two stellar pillars or Pillage should be ignored.
As should the FX "Market". A market is full of Marks, not Deutsche, and we know how marks end up. At the bottom of the river with margin blocks around their ankles.
ORI
http://aadivaahan.wordpress.com/2011/01/21/accidental-lives/
I wonder what proportion xccy basis swaps plays in the turnover ? Considering the structural imbalances at non US banks - this must be a key driver.
We should probably refer to them as retail.speculators versus retail investors, unless it is part of a hedging strategy or a way to diversify your cash portfolio component. I have no issue with speculation but before people get in the markets there is a lot they need to know including.the.difference between speculation and investment.
There is not much difference really - an 'investor' is speculating too, that a particular instrument will increase in value.
I'm sorry, but anything that is remotely connected to Averell Harriman, even in name only, is going into my circular file unread.
A recruitment consultant suggested to me last week that only 2 models will work in FX moving forward; HFT or position trading. Despite there being a couple of decent swings on, for example, the Euro since Jan 5th, the market *feels* weird. Retail traders cannot engage in HFT therefore they may as well trade off the daily or weekly charts, anything else could be a waste of time if HFT takes over.
IMVHO, they should be doing that regardless.
Can someone offer insight into HFT in the FX market? As I understand HFT requires a central exchange to take advantage of colocation, as the FX market has no central exchange how does this work?
I suppose they try and arb spreads and liquidity from different interbank sources. I also assume that most of FX HFT is based around helping to get huge orders filled...HFT doesn’t necessarily mean 1000000 quotes a second.