How do big institutions trade on the markets?

[gonk]

Does anyone know how (from first hand experience would be good) traders in the big financial institutions trade on markets.

I would guess they consider both technical and fundamental information. But for example do traders usually apply the same fundamental and technical analysis techniques found in most standard Trading texts or rather is it more a case of big institutions having rooms with boffins developing proprietary (technical and fundamental) trading strategies and algorithms?

Any idea of how traders are trained and the basic processes used by traders working in the big institutions would be much appreciated - thanks.

 

[Timmy]

What sort of institutions do you mean - there are many different types of institutions trading - banks, mutual funds, hedge funds, broker/dealers are 4 that immediately spring to mind that will have different styles.

At a bank, most of the trading is order-driven apart from the prop. desks (traders who do not have access to orders to trade but rather trade the bank's capital based on their trading abilities). Prop trading can be performed by all types: those driven by fundamental economic movements ('macro' trading is a general description of these types of traders), those basing their trading on mathematical models (PhD graduates in Mathematics and Physics) are just two examples.

Others may have different insights.

 

[Naked shorts]

It depends on so many different factors. But overall, they are trading strategies that require them to pick up coins in front of a steamroller. That way their earnings are steady.