Step 1Pre-trade Decisions
In Book 2 we described both the different styles of investing and other motivations for trading. We noted a number of specific causes such as new funds or a change in the assessment of the attractiveness of specific instruments that might be the cause of specific trading decisions.
Here, we are not concerned with the exact cause of a trading decision, but we are interested in understanding some of the systems and information employed in that decision. Figure 4.1 shows how portfolio managers employ systems and data to generate decisions to trade.
Figure 4.1 Step 1: Pre-trade decisions employ internal systems and market ...