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I wonder if anyone here - who has worked at the hedge fund - can tell me what are the most frequently used tool to generate TRADING IDEAS- besides the Bloomberg Terminal? Maybe an APP in Terminal or some advisory service?

Any info is highly appreciated!

 
Best Response

I interned for a Hedge Fund. Interns were split up geographically, and then placed in a specific industry. We used CapIQ and Bloomberg to initially "discover" companies. We then consolidated all the data on a specific spreadsheet (past performance, current trading price, multiples etc..), and picked which ones we found "interesting" for potential investments. From there, we went over 10Ks (or international equivalents), built DCF models to determine our own valuations, and went over SWOT analysis/potential synergies on news articles/from cold calling people in the industry etc...

 

wow - thank you very much for this detailed reply....this in fact concerns the ways of picking the companies based on the fundamental data - but what about the technical analysis - do the hedge funds have any preference for using specific tools for picking up the trade ideas - say on the FX or the COMMODITIES markets ? like Trading Central or any other tool? Can you remember any of these? thanks a lot fro your reply again!)

 

Most of the outside research is either proprietary from a research/econ group or provided by banks. There is internal research (economists usually) also, and of course you do your own analysis.

You're asking an incredibly vague question. The ways a macro, rates rv, fundamental equity and Oil PM approach the process is very different.

 

Most of the outside research is either proprietary from a research/econ group or provided by banks. There is internal research (economists usually) also, and of course you do your own analysis.

You're asking an incredibly vague question. The ways a macro, rates rv, fundamental equity and Oil PM, for example, approach the process is very different.

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

thank you for you reply...ok let me be more specific - I want to know what tools the GLOBAL MACRO FUNDS use to find ideas about trading specific CURRENCY PAIRS.....do they use tools like Trading Central or it is too simplistic for them?

 

Most Macro funds don't trade on TA, though it may be used for entry/exits depending on the person.

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

Well yeah, but when you say Global Macro generally it means discretionary. If you're talking about black-box, any number of languages, I'd imagine a lot of C, Matlab with their own proprietary signals. What is your goal here?

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

Best advice I can give you is to learn fundamental analysis and Value investing.. Technical analysis and momentum trading works until it doesn't. Studies have shown that just buying statistically cheap stocks over time you can do great, so learn value investing and grow from there.

Just my 2 cents, take it and use it or take it and give it to a bum.

Good luck.

 

I primarily use a proprietary indicator that most hedge funds are not aware of, which relates to how spray tanned one of the CEO's in my coverage looks. If he is really orange, that means the market is on fire and it's time to take some assets off the table. If he starts to look paleish or sickly, the market has gotten really bad, and there are certainly good buying opportunities ahead.

 

some really funny comments here - well my primary goal is to learn the tool which is most frequently used by the high frequency-trading quantitative hedge funds - this must be Matlab - if not - please do suggest an alternative....I am by no means interested in fundamental analysis....I want to be able to get small chunk of profit from millions of trading opportunities daily - than to try and hope my dozen well-reasearched long-term value bets will work out...

 

You're using alot of words but I don't think you know what they mean.

Also you are blatantly just fishing for the design principles for systematic HFs so you can try to copy their trading decisions for your 'hotshot' personal forex account, hence your poorly hidden questions about TA and how do global macro funds trade currency pairs, you want to copy the big dogs because you think its free money, but you are trying to do it on the cheap with shitty retail systems and sources.

 

why in the world do you think i want to copy them - I have my own system - I just want to know what tools they use most...and surely I know what I am talking about when I speak...that was not a constructive comment from you...

 

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