ACF Academy : : Markets : : Trading Catalysts: Factors that Drive Markets

Category: Markets

Volatile financial markets create both risk and opportunity. Sudden jumps or breaks in prices can impart a roller-coaster like quality to trading in financial markets. This program examines the catalysts that spark large changes in prices and discusses potential trading opportunities. These run the gamut from ill-advised comments by policymakers to the release of certain economic reports to central bank interventions to factors internal to the market itself. Numerous examples are used to illustrate the market impact of trading catalysts (including some moment-by-moment reactions of market prices to news). The principal objectives of this intensive one-day seminar are to enable delegates to:

	Look at the market differently
	See trading opportunities before others and spot opportunities that others might miss
	Improve information asymmetry
	Study Trading Catalysts
	Conduct superior analyses
	Lower transactions costs.

Trading catalysts in a volatile market.


The Trading Edge

	Where is your trading edge?
	Motivation: Only a few trades account for most of the profits of a typical trader.
	Trading Catalysts – defined.
	Five simple questions:
	• Which markets?
	• Which direction?
	• How much?
	• How long?
	• How risky?
	A sixth question—will the price action in one market impact other markets?
	The questions are easy; the answers are not always – examples.
	Moment by moment response to bailout news
	Other examples
	Market conditions and sentiment:
	Impact on duration and magnitude of news
	Impact on the perceived probability distribution of events and the size of forecast errors


Trading Catalysts

	Trading Catalysts – various examples:
	Unscheduled news
	Scheduled news
	Machine-readable news and quant funds
	Inside the response to news – the moment by moment reaction of CBT interest rate futures to the employment report.
	Transitory correlations – examples
	Potential trading opportunities:
	• Slow response to news
	• Delayed response
	• Information cascades
	• Unconventional sources of news
	• Others
	Trading lessons
	Trading simulation – putting theory into practice

NB All practical sessions are highlighted like this:
	means a Workshop or Simulation
	means a Case study