Old folks: Rookie currency traders have no idea what they’re doing
This is from Bloomberg: Rookie Currency Traders Are Causing Trouble at Crucial Moments
Last week, the Bank for International Settlements:
- Tucked deep into a report on foreign-exchange market liquidity was a brief paragraph on how rookie traders could be partly to blame -- along with falling volumes and the growing prevalence of electronic trading -- for the flash crashes that have roiled the $5.1-trillion-a-day currency market over the past two years
- One case the BIS found particularly worrisome was the time last October that the pound plunged 9 percent in a matter of minutes during early trading hours in Asia. The organization concluded that "less experienced" traders handicapped by a limited knowledge of which algorithms to use at that particular moment "amplified" the rout.
- Younger, lower-paid employees make up a greater percentage of trading desks than they have in years ... Part of banks' broader effort to cut staff, boost electronic trading and lower costs
- The "juniorization of Wall Street" ... has been particularly acute in the foreign-exchange market
- The world's 12 largest global banks cut front-office staff by about 25 percent in Group-of-10 currency markets over the past four years
- For every managing director with about 10 years or more on the job, there are as many as seven less-experienced staffers on currency desks ... The ratio was one-to-four just five years ago
More here at the link.
I'm surprised nowhere in the article were young people told to get a haircut, get off the lawn, and to turn that music down.
But turn this up: