210 research outputs found
The Retail FX Trader: Random Trading and the Negative Sum Game
With the internet boom of early 2000 making access to trading the Foreign Exchange (FX) market far simpler for members of the general public, the growth of 'retail' FX trading continues, with daily transaction volumes as high as $200 billion. Potential new entrants to the retail FX trading world may come from the recent UK pension deregulations, further increasing the volumes. The attraction of FX trading is that it offers high returns and whilst it has been understood that it is high-risk in nature, the rewards are seen as being commensurately high for the 'skilled and knowledgeable' trader who has an edge over other market participants. This paper analyses a number of independent sources of data and previous research, to examine the profitability of the Retail FX trader and compares the results with that of a simulated random trading models. This paper finds evidence to suggest that whilst approximately 20% of traders can expect to end up with a profitable account, around 40% might expect their account to be subject to a margin call. This paper finds a strong correlation between the overall profitability of traders and impact of the cost of the bid-ask spread, whilst finding little if any evidence that retail FX traders, when viewed as a group, are achieving results better than that from random trading
The Persistence of Current Account Balances and its Determinants: The Implications for Global Rebalancing
An Update on EMU Sovereign Yield Spread Drivers in Times of Crisis: A Panel Data Analysis
Efficiency Of Foreign Exchange Markets: A Developing Country Perspective
This study tests weak and semi-strong form efficiency of the foreign exchange market in
Sri Lanka during the recent float using six bilateral exchange rates. Weak-form efficiency
is examined using unit root tests while semi-strong form efficiency is tested using cointegration, Granger causality tests and variance decomposition analysis. Results
indicate that the Sri Lankan foreign exchange market is consistent with the weak-form of
the efficient market hypothesis (EMH). However, the results provide evidence against the
semi-strong version of the EMH. These results have important implications for
government policy makers and participants in the foreign exchange market of Sri Lank
Gathering Insights on the Forest from the Trees: A New Metric for Financial Conditions
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