Former Chief FX Trader at Citibank - Ask me a question

How long do you typically hold the positions?

 

Hi CuriousGeorge8 - Depends on the TP but definately not over the weekend whilst the geopolitical turmoil is in play

 

Definately?

Chief forex trader at Citi? You don’t say?

 

Hi Nooby_Mcnoob - Remember that Forex is decentralised so using info from a retail broker does not reflect all traders only their clients (or an aggregate if they have collated all retail traders somehow) - also the banks are 90% (or whatever the latest figures are) of the volume

 

cool thread, always been curious:
- what range of annualized % returns would you say bank fx traders in the 50th/90th percentiles produce?
- there have occasionally been reports that some bank traders have somewhat lower returns after moving to the buyside, that internal info on flow helps them during their time on the desk, but diminishes outside the bank - is this true for fx traders in your circle?
- what kind of special training do banks provide to turn their recruits to profitable traders making millions per year? when the statistic is that most of retail loses

 

Brad, you're marketing a service. You need to become a sponsor to do so. You run a CTA, so how did you do in 2018?

 

This post puts anything else you say in doubt. You do realize spot and futures move similarly???? And you said you were a chief forex trader at citi??????

 

What's the typical risk-adjusted return that the banks realize in FX trading? What's a typical Sharpe ratio?

 

Apologies I wasnt specific enough - 'Spot' Forex only

 

I do not trade any of those and my knowledge is very basic vs Equities/Options/Futures.

My concern with non-deliverable forex has always been the decentralization of quotes and counterparty risk. The customer can only see the net bids/offers from banks after spreads on just that system, while a bank that makes these markets on many platforms can see all the order flow and arb against them and hedge in the SPOT and Futures market. Then, your counterparty is the FCM that only need $25mm (last I looked-might have changed) to do this type of leveraged business.

In general, from the traders side, I prefer centralized markets where price discovery is all in a limited number of markets that are tied in some way and the counterparty risk if any is with a large institution like the CME or in the case of SPOT, the bank.