Emerging Markets?

Hi,

Institutions seem to be turning to emerging markets. Having witnessed the movements in some of those markets, I can certainly understand the attraction of their volatility as compared with the oftentimes choppiness of the big markets such as the US. But I wonder which markets precisely are those institutions heading towards? Is it Latin America, Central Europe, or Asia?

Furthermore, I wonder how they deal with the problem of illiquidity? In smaller markets, volatile movements can happen without warning by one single not-so-big transaction. Or are the big boys not worried about this with their deep pockets?

Anyway, are there any non-institutional traders who are trading the emerging markets currently? If so, are they concerned about illiquidity? That is proving the biggest hurdle for me at the moment.

Thanks indeed.

Oops, apparently this is not a popular topic.

Thanks indeed, GammaJammer; that was exactly my point.

Hi lightning bolt,

You are right that Joe Average is unlikely to be too big for a market. However, illiquidity poses at least two problems for a small trader. Firstly, the bid/ask spread. Secondly, the volatility.

When a market is less liquid, it can be easily manipulated, and spikes and wide range bars can happen without warning. In some senses such price/volume activities are ' rogue' as sometimes they are not really related to the underlying market conditions. Plus that market depth information is not easily available in some of these market, managing trades becomes more difficult.

I feel the volatility in such markets is like a two-edged sword. While It is attractive when compared with the choppiness of the big and well-developed markets, it also makes it harder for individual traders to grasp such benefits.

That said, it is my own views and I am no trading guru; the experts may see the matter entirely different. :cheesy:

Thanks really, GammaJammer.

GammaJammer said:

And anyway there's plenty out there worth looking at without trying to trade the Thai Baht or whatever.

Click to expand...

What? Only Thai Baht? Nothing else?