I was thinking the other day about the role everyone plays in the market. Basically locals provide liquidity, their scalping/spreading/intra-day techniques play a huge role in allowing longer term larger traders banks etc to take positions in the market.
The longer term views held by banks/funds etc are in my opinion the force that drive the market, only very large locals have the individual power to move the market in a very liquid market such as the Bond markets (paul rotter excluded).
I work next to a lot of spreaders and scalpers that are holding positions for a matter of seconds. They are exceptionally good at what they do, however have little or no interest/knowledge as to where the market is going over the next couple of days/weeks/months because the next 2 ticks are what occupy 90% of their mind.
My point is, a market made up of pure locals wouldn't work, the markets wouldn't move, just move a few ticks back and forth among locals and would defeat the point of the markets.
But the majority of trading firms push all their traders into very short term trading techniques and people have very little interest in the macro economics of the markets which is one of the main reasons why we have the markets after all!
I was wondering if any of you that have been around the markets for a number of years and perhaps are on the other side of the fence i.e traded longer term for a fund or a bank could comment on how the markets have changed in your eyes over the past few years with introduction of trading arcades and I assume more intraday traders. Has it been an improvement i.e the markets more efficient/liquid/ economically sound on both the macro and micro aspects to the market. Or are the markets becoming more geared towards intraday traders with the longer term efficiency of the markets suffering?
Thanks
The longer term views held by banks/funds etc are in my opinion the force that drive the market, only very large locals have the individual power to move the market in a very liquid market such as the Bond markets (paul rotter excluded).
I work next to a lot of spreaders and scalpers that are holding positions for a matter of seconds. They are exceptionally good at what they do, however have little or no interest/knowledge as to where the market is going over the next couple of days/weeks/months because the next 2 ticks are what occupy 90% of their mind.
My point is, a market made up of pure locals wouldn't work, the markets wouldn't move, just move a few ticks back and forth among locals and would defeat the point of the markets.
But the majority of trading firms push all their traders into very short term trading techniques and people have very little interest in the macro economics of the markets which is one of the main reasons why we have the markets after all!
I was wondering if any of you that have been around the markets for a number of years and perhaps are on the other side of the fence i.e traded longer term for a fund or a bank could comment on how the markets have changed in your eyes over the past few years with introduction of trading arcades and I assume more intraday traders. Has it been an improvement i.e the markets more efficient/liquid/ economically sound on both the macro and micro aspects to the market. Or are the markets becoming more geared towards intraday traders with the longer term efficiency of the markets suffering?
Thanks
