Читать книгу The Foreign Exchange Matrix - Barbara Rockefeller - Страница 24

Now enter the poor retail trader, who often has no idea that FX trading is not easy, as the TV and website ads proclaim. Retail FX trading is rapidly expanding, hot on the heels of professional asset managers diversifying their base. How do these new traders make sense of the market? FX commentary is keeping pace, but much of it is of dubious quality.

One book author asserts the Canadian dollar is 40% correlated with the price of oil – without naming the time period over which the statistic was calculated, rendering it literally useless. In practice, you can manipulate the CAD to be correlated with the price of oil to any number that suits your argument by changing the correlation timeframe. In the funniest case, a publisher was so eager to get a book in print and capitalise on the demand for market commentary that it failed to notice a whole chapter and multiple other references devoted to “rouge” traders (when “rogue” was the intent).

The lesson here is to be careful what conclusions you draw from what you read. And also, to come back to our matrix, that single-factor explanations of FX market behaviour are always wrong. To explain a move, you need:

1 fundamental factors;

2 technical measurement of the sentiment derived from those factors;

3 technical dynamics, and

4 existing positions of the key players.

Once you have these four things and decide which weight each should have, you can begin filling out your matrix and deciding how best to position yourself for a move. In the chapters ahead, we will go deeper into the specific factors that drive currencies.

It’s probably fair to say that very few, if any, highly sophisticated FX market players have programmed a matrix to include all the factors or succeeded in figuring out how a change in one fundamental feeds the technicals and then how the resulting positions create a feedback effect on other technicals and sometimes the fundamentals themselves. A computer program that is capable of taking new data and have it light up the relevant variables in some kind of logical order and have it all result in a price deduction would be a splendid machine, indeed. If some advanced hedge fund or sovereign fund has created a working matrix, they are keeping it a deep, dark secret.

Until such a thing can be devised, we mere mortals must struggle with the sets of variables the old-fashioned way, using our brains. It should come as no surprise that some of the best traders are fairly ignorant of economics and historical context, but are cracker-jack at game theory. In the chapters that follow, we do not actually mention the matrix very often. Instead our goal is to describe the FX market in ways that will be useful to the reader in creating his own matrix in his imagination, if not in programming code.