GammaJammer

Bit confused - what did you test it against? futures volume? GJ

Dont fall into the trap of thinking that everyone either trades fundamentally or technically, and even those who do both will keep the two apart. For a start many people will trade flow, positioning, context etc etc. Secondly one can trade shorter term fundamentals as well - the ebb and flow of rate expectations, that sort of thing. This stuff is rarely as black and white as it's painted on these kinds of forums in the real world. GJ

In FX, most professional wholesale (i.e. bank, hedge fund or similar) prop traders will do this. It's called 'jobbing' around your position, and usually the aim is to improve the overall average entry point of your core position to a point where even if you get stopped out eventually you're still banking some P+L. Plus some people who trade breakouts like to only put a portion of their positoin on at the inception of the breakout, adding and subtracting until it's clear that the break is genuine. Because lets face it, picking direction these days is the easy part compared to actually nailing the timing down GJ

Yeah - Roosters. With skis.

Relationship doesn't equate to cause and effect mate. I am comfortable standing by my comments. gj

It's the rooskies in GBP/JPY. Not joking. GJ

You're basically talking about RETAIL FX - and as futures are primarily a wholesale preserve, you're comparing apples with oranges. In terms of the wholesale markets it's very simple. Cash (spot) FX is the dog. Futures are the tail. Tail doesn't wag dog in this particular case. End of story. GJ

Few points - firstly EBS data would represent a good proxy for the market (in relative, NOT absolute terms of course) in maybe 4 or 5 pairs at best. These are; EUR/USD, USD/JPY, USD/CHF, EUR/CHF, EUR/JPY Secondly, FX Marketspace - think this may be dying a slow death. Thirdly Tic volume. Knowing how it's calculated, I can't personally take it seriously. Even at times when there's correlation there most definitely isn't a sustainable cause / effect line (I bet non of these studies undertaken included granger causality modelling or anything like that). Now it is up to each trader to make his / her own minds up about this kind of thing, and it does apear to be one of those topice that polarises opinion on this and other boards. If I were being really spiky I'd say opinion is polarised roughly along lines of experience but lets not go there for now Wasp however, I think, may have been at least in part swayed by my arguments last time this topic came up. I posted a ton of stuff on this last time so don't propose to go into it again now. fourthly - general point - the fx market, as a function of it's fragmented nature, doesn't have access to market wide data (actually, with the growth of dark pools of liquidity I suspect neitehr do many equities traders either these days but thats anotehr story). And as such hasn't grown to rely on it. Thus any analysis that uses it I'd take with a small pinch of salt. My $0.02 GJ

I wouldn't trade futures personally, but I've been an interbank / institutional FX person for 14 years so you would expect me to be a little entrenched in my views. I think I've earned the right to be old and cranky now Aaron - to come back to your original question, I would say that the one thing you will find when graduating to ecn trading is that you may at first feel overwhelmed by the array of options open to you when you trade (in terms of how you access the market). Traditional retail platforms have three ways you can trade - at market, limit order, stop order. Some ecn platforms have all sorts of funky algorithmic offerings, typically aimed at people trading larger size, that are aimed usually at minimising the 'footprint' they leave in the market. This can be by hiding their bid until the price is trading, by slicing it into small slivers and executing over an hour or whatever. There are loads of thes algorithms operating. Pay them no heed. You don't need all the bells and whistles. Just concentrate on remembering what it was you were doing before that worked, and figure out asap how to replicate it on your chosen ecn. Trust me - it's not rocket science. GJ

Careful folks. Be aware of the difference between what retail traders refer to as a market maker (i.e. more often than not some crappy retail / spreadbet platform), and what the market actually thinks of as a spot FX market maker (i.e. someone sitting on a bank's spot desk). Futures trading is an option for you, but by no means your only option. Liquidity isn't fantastic but depends on your trading size. Also think carefully about which currency pairs you want to trade and find out whether your choice of exchange even supports them. If you have a penchant for crosses, would suggest a reputable ECN over futures trading. If you just wanna punt cable and eurusd you will of course have more avenues open to you. Another overlooked option for the higher end retail trader is to go with a single bank platform from one of the bigger investment banks. Now they're gradually opening up their architecture to allow you to bid and offer against internal liquidity, they are almost resembling mini ecns themselves, but with the potential added advantage of more robust liquidity at choppy times. Bottom line is you need to properly research this stuff. Good luck GJ

Not exactly tricky.....

Presumably a big part of why they are ofen weighted towards commercial exposure is that you can trade bigger 'blocks'. It's unweildy to trade £300k houses if you have a few hundred million to invest - easier to buy a small office block than a bunch of houses, logistically I reckon. I may well be talking out me aris for all I know, but my god I'm convincing sometimes GJ

I find exercise helps. I get good thinking done when I cycle into work in the mornings. Wouldn't necessarily call it meditation though.

OMG - thats me

And on that point. Presumably it also means that if an individual were to use a REIT to hedge property exposure (and I don't even know if you can short sell them so this could all be moot) wouldn't one also have to take into account possible tracking error depending on what the property portfolio you are protecting looks like. E.G. hedging a high end London residential portfolio with a commercial property based, Manchester centric property vehicle would presumably not be anything like a perfect hedge (extreme example just to make a point). Am I talking out my @rse here?

But for people / institutions that trade REITS in size, presumably (and I know nothing at all about this market btw) there must be analysts who will pore over the actual portfolio composition of a given REIT and come up with a fair value (roughly at least) for it, trading when price moves away from this become over extended. Or not...... Help me out here.....

Stands to reason as it's a long complicated process actually selling a house compared to trading a commoditised instrument.

Fine - just mark the price way lower if you're long and worried. P*ssies. That's market making. They just don't like the money if it aint easy.

Very welcome. This is pretty much the essence of portfolio risk management At a guess (and it is a guess, but an educated one) otc economic derivatives. Probably a bank will make a market in this stuff. Goldies and Deutsche launched this kind of thing for NFP a few years back and it did well. Have a feeling it's even exchange traded now but don't quote me on that. GJ

In very general terms (and to kick off the forum the right way) What I personally would do in your shoes is to try and break your overall risk portfolio down into it's component parts. That way you can seperate them into most likely 3 camps 1) Risks you can control and hedge accurately 2) Risks you can hedge roughly 3) Risks you have no control over So what are the exact factors that would make house prices dip further? An obvious one and good starting point is rate hikes. This probably falls into category 2 unless you have a really accurate model for forecasting just how much your portfolio will take a hit for say a 50bp hike by the BoE. But you can mitigate this risk via interest rate derivatives. Second one - general housing market sentiment. V hard to control, but maybe a proxy can be achieved by constructing a short basket of UK housebuilders? Or even having a SB position on that sector? I'm sure there are otehr factors, but it's not cut and dried what to do. Hopefully this acts as a pointer though. make sense? GJ

Out of interest what do you mean here - that it's all over the internet? or that they're trying to hack each other / send viruses to tank commanders' laptops, that kinda thing?

Three key barriers to your knowledge as far as I'm concerned. 1) The term 'algorithmic trading' encompasses an awfully wide scope of activities, some of which will have little or no interest to you. What it isn't is an activity that solely relates to the sort of 'systems trading' that retail traders think in terms of (i.e. simple m.a. crossover, that kind of thing). It is considerably more than that, both in breadth and depth of application. 2) The really interesting work is, by definition, proprietary in nature, and as such is closely guarded. No-one is gonna splatter this stuff all over the web - where's the upside? 3) Unless you actually work in this field chances are anything detailed enough to be useful is gonna sail right over most peoples' heads here. Not trying to be patronising, just telling it like I see it. GJ

Agree - been done to death a bit (and I admit towards the end I was getting bored and fractious meself). Prior to that, hope I added a few useful insights. And thanks Blowfish for your comments on Granger causality - interesting. And you're right - the people who are comfortable working with something like R or Matlab probably aren't mucking about in spot FX My point was a more general one though that the tools to progress the debate a little DO exists, and they would at least be a welcome breath of fresh air and a change from all the conjecture. Good afternoon / evening all. GJ

If you were so inclined, and had access to the time series data, you could run a Granger Causality test I think, but I'm guessing that is a bit out of scope for many here (as well as not being as immediately gratifying as making sh*t up and sticking another indicator on your chart). GJ (aka statto)

I don't care what the analysis is Walter, I think I've done more than enough explaining already about why this ISN'T a measure of 'real' market activity (and remember, I can see this stuff taking place on my screens so I know what real market activity looks like). For the last time..... Tick volume is a measure of the number of price updates BY A CHART PROVIDER'S DATA FEED. Things happen to make these updates occur that have literally NOTHING to do with trading activity. Ok - I'm bored with this now. Walter - there really is no convincing you on this one so I give up. GJ