From Forex to Quatitative analysis.

[sunnyforex]

Hello everyone,

My background: Bachelors in Mechanical engineering, Masters in Information Tech, 3 + years of Software development experience.

With Forex: Trading on online platforms for last 1 year , trying to find a holy grail of a "system" that will make me rich. But over time i realized that trading is just a "zero sum" game. So now from my experience and what i read on internet , i want to find "arbitrage" oppurtunities .

My requirements: i want to continue my career in software development. Trading/quant analysis should only be a second job. I do not want to do quant analysis for high frequency trading as used in companies where they don leave any opportunity unexploited. I am just looking to enhance my trading decisions by doing some analysis.

What i know : Have to go back to those maths and statistics textbooks. Then read books on computational econometrics, "no-arbitrage" pricing etc...

What i want to know:
(1) What exactly do quants work on an average day? Narrowing it down to forex market. What opportunities do they look for? Is it just the momentary difference in pricing of currencies across different markets? or something else?

(2) What is the best that i can achieve from my quant analysis working alone at home.

(3) What should i focus on based on my profile?

To all the people who will reply , i thank you in advance, as what you say could change my whole approach towards what i do in life from here on.

Thanks for reading.

Sunny

 

[Tsotne]

@sunnyforex

(1) What exactly do quants work on an average day? Narrowing it down to forex market. What opportunities do they look for? Is it just the momentary difference in pricing of currencies across different markets? or something else?

As for forex based quants, there are different roles depending on which position they work in this area. If you don't intend to follow HFT, then you can simply choose many of quantitative developers' jobs. As for the second part of your question, the general answer I have is NO. They don't just seek the difference in currencies' exchange rates. It would be common and recursive for speculative character quants. Some FX based quants focus on constructing models for hedging purposes while ignoring any gain or profit when executing trade. Consider a portfolio consisting of many instruments whether they are stocks, bonds, derivatives, currencies, commodities, etc. you might be assigned a task of finding the best hedge for that portfolio in terms of FX extended through other securities. I attended some lectures by one of the representative of a legal side of a large bank of Australia. He explained the trading strategy to overcome the BASEL regulations which actually requires math models construction in terms of derivatives, FX securities, Fixed income securities and so on. So to sum up they don't just seek the difference in currencies , rather they also construct complex models for hedging.

(2) What is the best that i can achieve from my quant analysis working alone at home.

Alone at home? Ambiguous...Gain knowledge, excel analytical skills, get prepared for dissertation, gain a good experience(recognizable or not though).

(3) What should i focus on based on my profile?

Since you have quite a solid experience of software development and good analytical skills, if I were you I would go to quant developer job. You will be assigned some tasks like mathematical, statistical models and you have to program them, construct programming algorithms. I think it would be interesting for you.

Good Luck