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andibello
Currencies and bitcoins are the ideal playground for the quantitative analyst. Unlike stocks, bonds, or their derivatives, they are quite immune to fundamental factors (Lyons, 2001), at least on the shorter time
scales This is not to say that, for example, a Fed interest rate decision would not a ect exchange rates (of course it would!), but that such fundamental events cannot be used as predictive factors. They are contemporaneous factors that can only be used to explain exchange rates or bitcoins movement after the fact. Since as traders we are mostly interested in predictions only, we might as well look for the best technical analysis techniques instead.
When I mention technical analysis, you may immediately think of the Bollinger band, RSI, or stochastic indicators, and the like. But I use this term in a very broad sense. I just mean predictive techniques that only require prices and volumes as input. from Machine Trading (Ernest Chan 2017)
Currencies and bitcoins are the ideal playground for the quantitative analyst. Unlike stocks, bonds, or their derivatives, they are quite immune to fundamental factors (Lyons, 2001), at least on the shorter time
scales This is not to say that, for example, a Fed interest rate decision would not a ect exchange rates (of course it would!), but that such fundamental events cannot be used as predictive factors. They are contemporaneous factors that can only be used to explain exchange rates or bitcoins movement after the fact. Since as traders we are mostly interested in predictions only, we might as well look for the best technical analysis techniques instead.
When I mention technical analysis, you may immediately think of the Bollinger band, RSI, or stochastic indicators, and the like. But I use this term in a very broad sense. I just mean predictive techniques that only require prices and volumes as input. from Machine Trading (Ernest Chan 2017)
Jan 05 2018 at 12:36
andibello
Trump’s promise to elevate the hateful and institute their version of a white Christian nation where minorities, women, secularists, and liberals know their place resonates among the “hate group” that senses their way of life was stolen and must be taken back. Since the 2008 general election this has been the overriding narrative driving conservative populism and the religious right, anti-women, anti-gay and anti-minority movement.
By politicsusa
Trump’s promise to elevate the hateful and institute their version of a white Christian nation where minorities, women, secularists, and liberals know their place resonates among the “hate group” that senses their way of life was stolen and must be taken back. Since the 2008 general election this has been the overriding narrative driving conservative populism and the religious right, anti-women, anti-gay and anti-minority movement.
By politicsusa
Apr 03 2016 at 06:47
andibello
1. Information: microstructure models recognize that some informa- tion relevant to exchange rates is not publicly available.
2. Players: microstructure models recognize that market participants differ in ways that affect prices.
3. Institutions: microstructure models recognize that trading mechanisms differ in ways that affect prices.
Richard Lyons
The.Microstructure.Approach.to.Exchange.Rates
1. Information: microstructure models recognize that some informa- tion relevant to exchange rates is not publicly available.
2. Players: microstructure models recognize that market participants differ in ways that affect prices.
3. Institutions: microstructure models recognize that trading mechanisms differ in ways that affect prices.
Richard Lyons
The.Microstructure.Approach.to.Exchange.Rates
Mar 29 2016 at 06:09
andibello
When one moves from a macro approach to a micro approach, two variables that play no role in the macro approach take center stage. These variables are hallmarks of the micro approach, and as hallmarks, they help to define microstructure. These variables are
1. order flow
2. spreads (bid-ask).
Richard Lyons
The.Microstructure.Approach.to.Exchange.Rates
When one moves from a macro approach to a micro approach, two variables that play no role in the macro approach take center stage. These variables are hallmarks of the micro approach, and as hallmarks, they help to define microstructure. These variables are
1. order flow
2. spreads (bid-ask).
Richard Lyons
The.Microstructure.Approach.to.Exchange.Rates
Mar 29 2016 at 06:09
andibello
Variations in current and expected future real interest differentials have played a very minor role as the proximate determinant of the changes in real exchange rates for major currencies over short- and medium-term horizons in the post-Bretton Woods era. Instead, exchange-rate dark matter has been the dominate driver of real depreciation rates through its affects on expected excess returns and/or the expected long-run real exchange rate.
The risk shocks can account for the role of dark matter in real exchange-rate dynamics, but also that these same shocks have significant macroeconomic implications. This analysis suggests that exchange rates appear disconnected from traditional fundamentals because they are particularly susceptible to risk shocks that play an important role in international macroeconomics.
Martin D. D. Evans
Exchange Rate Dark Matter
Variations in current and expected future real interest differentials have played a very minor role as the proximate determinant of the changes in real exchange rates for major currencies over short- and medium-term horizons in the post-Bretton Woods era. Instead, exchange-rate dark matter has been the dominate driver of real depreciation rates through its affects on expected excess returns and/or the expected long-run real exchange rate.
The risk shocks can account for the role of dark matter in real exchange-rate dynamics, but also that these same shocks have significant macroeconomic implications. This analysis suggests that exchange rates appear disconnected from traditional fundamentals because they are particularly susceptible to risk shocks that play an important role in international macroeconomics.
Martin D. D. Evans
Exchange Rate Dark Matter
Mar 26 2016 at 20:57
andibello
The new understanding would require altering pricing models for foreign-exchange markets, recasting assumptions about correlations among different asset classes, being more open to the possibility of sudden market jumps and air pockets, and factoring in a larger liquidity risk premium
By
Mohamed A. El-Erian
The new understanding would require altering pricing models for foreign-exchange markets, recasting assumptions about correlations among different asset classes, being more open to the possibility of sudden market jumps and air pockets, and factoring in a larger liquidity risk premium
By
Mohamed A. El-Erian
Mar 25 2016 at 10:51
andibello
if negative interest rates go beyond perceived thresholds of reasonableness and sustainability, the operating modalities of certain markets could change. This dynamic may be playing out in the recent puzzling behavior of foreign-exchange markets after both the Bank of Japan and the ECB adopted and reinforced their negative rates policy.
Rather than depreciate, both the yen and the euro have appreciated. Although some of these counterintuitive moves reflect a somewhat more dovish Federal Reserve, which has mitigated expectations of highly divergent interest rates among the world's central banks, there could well be something bigger in play: Specifically, the dilution of interest-rate differentials as the main driver of currency values, particularly as greater attention is paid to stock effects, including the ability of citizens to repatriate capital from abroad. This is an especial concern for Japan.
By
Mohamed A. El-Erian
if negative interest rates go beyond perceived thresholds of reasonableness and sustainability, the operating modalities of certain markets could change. This dynamic may be playing out in the recent puzzling behavior of foreign-exchange markets after both the Bank of Japan and the ECB adopted and reinforced their negative rates policy.
Rather than depreciate, both the yen and the euro have appreciated. Although some of these counterintuitive moves reflect a somewhat more dovish Federal Reserve, which has mitigated expectations of highly divergent interest rates among the world's central banks, there could well be something bigger in play: Specifically, the dilution of interest-rate differentials as the main driver of currency values, particularly as greater attention is paid to stock effects, including the ability of citizens to repatriate capital from abroad. This is an especial concern for Japan.
By
Mohamed A. El-Erian
Mar 25 2016 at 10:51
andibello
Revenge dynamics
Revenge is essentially a cycle of regaining power. The revenger feels that they have been wronged and therefore some sort of power has been taken from them. Power could be taken from them financially if money is stolen, or sexually if they have been cheated on. Whatever it may be, power was lost in some form or another. This loss of power is the driving force behind revenge.
The revenge dynamics is a cycle of regaining power.
By Wikipedia, Revenge
Revenge dynamics
Revenge is essentially a cycle of regaining power. The revenger feels that they have been wronged and therefore some sort of power has been taken from them. Power could be taken from them financially if money is stolen, or sexually if they have been cheated on. Whatever it may be, power was lost in some form or another. This loss of power is the driving force behind revenge.
The revenge dynamics is a cycle of regaining power.
By Wikipedia, Revenge
Feb 29 2016 at 07:28
andibello
The market is an organized medium that expresses human behavior in different price areas at a given point of time always presenting an opportunity to anyone. By Peter Steidlmayer. "The Steidlmayer Theory of the Markets"
The market is an organized medium that expresses human behavior in different price areas at a given point of time always presenting an opportunity to anyone. By Peter Steidlmayer. "The Steidlmayer Theory of the Markets"
Feb 14 2016 at 07:39
andibello
In poker you can know the cards, the game, the math and the probabilities but that doesn’t make you a good poker player. A good poker player must be able to make good decisions under pressure by analyzing multiple factors at once: odds, math, prospects and the other people at the table. To be a great poker player you have to know the right time to bluff, understand when someone else is bluffing and know when you need to call.
These are the same skills you need to be successful at trading. As a trader, you need to be able to make fast decisions based on multiple economic factors, odds, math, stress and people. As in poker, you can understand the math, the odds and the models but you need to be able to use your intuition to read between the lines and understand if this is a good trade or not. By Josh Emberson, How Poker Prepared Me for a Job in Trading
In poker you can know the cards, the game, the math and the probabilities but that doesn’t make you a good poker player. A good poker player must be able to make good decisions under pressure by analyzing multiple factors at once: odds, math, prospects and the other people at the table. To be a great poker player you have to know the right time to bluff, understand when someone else is bluffing and know when you need to call.
These are the same skills you need to be successful at trading. As a trader, you need to be able to make fast decisions based on multiple economic factors, odds, math, stress and people. As in poker, you can understand the math, the odds and the models but you need to be able to use your intuition to read between the lines and understand if this is a good trade or not. By Josh Emberson, How Poker Prepared Me for a Job in Trading
Jan 24 2016 at 07:54
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