A few weeks back I quit my job as the monkey boy on a Citi USD/JPY option desk...I'm a college dropout and basically bullshitted my way into the position to start with, never was going to be a trader there though. Haven't been able to trade in 2 years because of compliance..and I'm hungry as fuck to trade.
So how do you believe global capital flows is essentially what I'm asking...
Here are two rough drafts, one for global markets and one for equity markets.
1. Correlations between the prices of tradeable instruments are permanently changing, because there are no linear, simple relationships. The markets show a complex, non-linear behaviour.
2. Even if there is a statistically sginificant correlation, it is not easy to determine which of the correlated instruments is leading and which is lagging. Often the correlation is coincidental, which does not help a lot.
Citi practically shuffled their entire FX derivatives business upstate from wallstreet when the share price was getting crushed in the storm then started moving stuff back after the bailout...I loved the crisis because I thought it was just a matter of time before I could bluff my way into USD/JYP institutional FX options trader but after the bailout there was no place to go beyond monkey boy for NYC douchebags remotely. I fucked myself also though because I don't play golf and think its as fun as watching grass grow, literally..
What have you done to throw stones? "day trading" your own cash is straight out banned the moment you are hired at a big bank and sign the dotted line ..
Trying to swing trade through institutional compliance is beyond impossible stop wise. Even trying to average into SPY positions during the crisis was beyond absurd time wise, oh yea and I had to trade through citi's bullshit retail platform...they aren't going to let you give business to the competition..
so basically fuck off son..I didn't post this to get your opinion.
From your posts I respect you Fat Tails...I made this post to try to spark an interesting discussion beyond the same old lame single time series analysis stuff.
If you think what I posted is nonsense then put your knowledge on the line and draw up your own
This is just a rough draft.
This is an insanely complex problem to even vaguely get a glimpse of...odds are neither of us have a clue.
What I hope to spark with this post is we can collude brain power wise here to draw some vague conclusion and then prune down to find something interesting...
CDS/Bonds were not included because of course there is an entire 3rd dimension to what i posted, "volatility"...
This mysterious excitation input to a model that has a feedback input to itself.
Most here are not bond traders so its probably best to ignore that right here...