Forecasting currency changes using Econometrics
Hi,
I was just wondering if econometrics is often used by traders themselves to forecast currency changes? Is that something that often happens in IB's such as RBS, JP, GS etc? Or is it mostly trader's hedging their risk? Also what does it mean to 'hedge' your risk
The reason I am asking is I'm writing a personal statement to apply for Economics at university and I had previously done some work experience in RBS in their Markets division and I was really interested in how mathematics and economics is used in finance.
Thank you
Sometimes econometric methods are used, but that's not common among traders... People who do research, such as economists and strategists, use econometrics often.
"Hedging your risk" means doing something to a portfolio that reduces or eliminates the possibility of loss, when a particular market move occurs.
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