Former Goldman Sachs employee turned Trader, Saad Filali, now managing Fiat Elpis Macro Fund, discusses predicting market movements by studying different trading styles, news flow trading, and balancing market pricing with fundamental valuations. Insights also shared on market dynamics, front-running news flow trading, valuation methods in various markets, leveraging news flow, and navigating market distortions and legislative influence.
Understand various market players' trading styles to predict market movements and identify entry and exit points effectively.
Identify market pricing discrepancies and fundamental valuations to capitalize on inefficiencies in trading strategies.
Recognize the impact of different market participants like retail traders and institutions on market dynamics and costs.
Deep dives
Public Makes Bond Investing Accessible and User-Friendly
Public introduces a modernized approach to fixed income investing, offering an intuitive bond screener and improved data access for evaluating and purchasing thousands of bonds. This reinvents the traditionally clunky and complex bond investment process, making it as straightforward as trading stocks or other assets. By providing corporate, treasury, and municipal bond options, Public aims to enhance portfolio diversity and accessibility for investors.
Understanding Market Participants' Behavior for Strategic Trading
Saad Filali, a former Goldman Sachs specialist in mergers and acquisitions turned trader, emphasizes the significance of comprehending various market players' trading styles and mindset in his trading strategies. He delves into analyzing institutions, sell-side brokers, CTA's, retail traders, and meme stock traders, using this insight to predict market movements and identify favorable entry and exit points. Leveraging news flow and research, Saad manages his own macro fund, focusing on fundamental valuations, market pricing discrepancies, and diverse market participant impacts.
Spotting Market Inefficiencies and Capitalizing on Discrepancies
Saad Filali's trading approach involves identifying inefficiencies in market pricing of macro fundamentals and strategically capitalizing on these discrepancies. By gauging market efficiency across various asset classes, Saad highlights equities' slower pricing response compared to the efficient forex market. Engaging in contrarian trading strategies, he navigates through the influence of algorithmic traders like CTA's, identifying opportunities when market pricing diverges significantly from fundamental valuations.
Market Impact of Different Participants
Market participants like retail investors from Wall Street Bets and institutional giants like Calpro or BlackRock have varying trade styles affecting market impact. Retail traders, despite smaller sizes, influence market moves through options trading with embedded leverage, while institutions execute trades meticulously over days, minimizing market impact. This distinction in trading strategies results in different effects on market dynamics and costs.
Impact of CTA's on Market Behavior
CTA's, notably long on NASDAQ, recently reduced exposure causing NASDAQ to underperform compared to SPX and Russell. The NASDAQ's fall is attributed to CTA profit-taking amid changing market conditions. Additionally, anticipating the core PCE inflation measure could influence markets positively, potentially prompting NASDAQ and bond purchases. Understanding the interplay of data releases and CTA actions informs trading decisions for potential market opportunities.
Saad Filali, worked for Goldman Sachs, specializing in Mergers and Acquisitions, then left and became a Trader. Understanding the thinking and trading styles of the many different market players is key to his trading, including those of institutions, sell side brokers, CTA’s, retail, and meme stock traders. Studying how they trade the volatility and news releases helps Saad to predict market movements and calculate suitable entry and exit points in his trades.
Saad now manages his own fund, called Fiat Elpis Macro Fund, and relies on news flow and research. He looks for discrepancies between market pricing and fundamental valuations and considers the impact of different market participants.
