no, I actually agree with your points here. Washing out the dirt int he trench can only be good for the industry. There was definitely an imbalance of talent between financial "professionals" and the waiting industry and I am glad market forces are helping to adjust back a bit. But does it have to be capped at 125k (Deutsche). In all seriousness this is a wake-up call for the last soul on the sell-side (profitable), if those bells don't ring clear then I dont know what else. This is all getting too socialist for me, but hey, as you said, in all honesty this is probably nothing more than the big fat pendulum that is currently swinging back, thats how I see it. Years of exuberance, followed by hubris, followed by scams and market violations, followed by outcry, followed by regulations, followed by quasi-socialist markets, followed by "we gotta stop this, life is not fun anymore", and back ...;-)
Sounds like it's become a tough game for the "trend-following herd." There's always a place for shorter-term Support/Resistance trading, in my view. Great article - thanks for posting. -Chi
What? He can't catch it unless it moves 500 points or around 15% and then it's too late? Sure life is tough when you thought making money was placing a trade and then watching it move forever in one direction. One day AAPL will no longer trend and then what? He's been watching too much MTV and not enough focus on how to trade for a real living. Fx is brilliant every day
The buy-side approaches FX as this uber-volatile asset with tremendous depth until they see that realized-vol is in the single-digits and they can't make any cash on mean-reversion. Market-making remains a huge profit-center as the entire desk is fronting every order over 100MM. The successful guys in FX funds (Hathersage, FXC) treat it as an equity proxy and/or are vol-traders.
That's where the 50 to 1 leverage comes in atty. Low vol? No problem, just juice it with leverage baby!
I'm not defending the article, the people who commented in it, or trading FX. I just posted an article. To me, it seems like a bunch of woe over something that once brought in money and then dried up - because of central bank involvement - or so it claims. How did I know Martinghoul would jump in?
Mr. know-it-all being everywhere, options I shut up, but dont claim big fx traders are in any way related to being options guys. Aside the pnl leftovers that are stuffed into barriers there is nothing whatsoever that could be related to option. Stick to your bread and butter but you look stupid making false claims and trying to look smart by pretending you know stuff you really should not open your mouth about. Your ego apparently makes you lose sight over your limitations.