Emerging Markets?

[clylbw]

Hi,

Institutions seem to be turning to emerging markets. Having witnessed the movements in some of those markets, I can certainly understand the attraction of their volatility as compared with the oftentimes choppiness of the big markets such as the US. But I wonder which markets precisely are those institutions heading towards? Is it Latin America, Central Europe, or Asia?

Furthermore, I wonder how they deal with the problem of illiquidity? In smaller markets, volatile movements can happen without warning by one single not-so-big transaction. Or are the big boys not worried about this with their deep pockets?

Anyway, are there any non-institutional traders who are trading the emerging markets currently? If so, are they concerned about illiquidity? That is proving the biggest hurdle for me at the moment.

Thanks indeed.

 

[clylbw]

Oops, apparently this is not a popular topic.

Thanks indeed, GammaJammer; that was exactly my point.

Hi lightning bolt,

You are right that Joe Average is unlikely to be too big for a market. However, illiquidity poses at least two problems for a small trader. Firstly, the bid/ask spread. Secondly, the volatility.

When a market is less liquid, it can be easily manipulated, and spikes and wide range bars can happen without warning. In some senses such price/volume activities are ' rogue' as sometimes they are not really related to the underlying market conditions. Plus that market depth information is not easily available in some of these market, managing trades becomes more difficult.

I feel the volatility in such markets is like a two-edged sword. While It is attractive when compared with the choppiness of the big and well-developed markets, it also makes it harder for individual traders to grasp such benefits.

That said, it is my own views and I am no trading guru; the experts may see the matter entirely different. :cheesy:

 

[clylbw]

Thanks really, GammaJammer.

And anyway there's plenty out there worth looking at without trying to trade the Thai Baht or whatever.

What? Only Thai Baht? Nothing else?