• ACI Global Education
• ACI Global Accreditation
• ACI Australia Dealing Simulation
  • ACI Australia Dealing Simulation Video
  • ACI Australia Dealing Simulation Photos

Click here to view footage from the 2006 ACI Australia Dealing Simulation.

2010 Dealing Simulation Dates

For information regarding the ACI Australia Dealing Simulations listed below please contact Chris Howlett @ ACI Australia Ltd on email chris.howlett@aciaustralia.com.au

A Steep Learning Curve

ACI Australia recently held its very successful Dealing Simulation course in the UK. Profit & Loss sent one of its staff, Jennifer Coldwell, along as a delegate on the course - this is her diary.

Friday
I am informed that I am going on the ACI Dealing Simulation Course next week, starting on the Tuesday and ending on the Friday. This fills me with dread as I have a limited knowledge of spot trading. I feel it is going to be a long weekend.

Day one, Tuesday
It is 5:00am and I am feeling slightly nauseous, it’s too early and I wonder who else has signed up for the "fun". I hope that I am not the only one that has no experience in this field.

Upon arriving at the hotel, the first person I meet is Noora Pahkala, who works at Skandinaviska Enskilda Banken. We chat and I find out that I am not alone in thinking this might be a tough week, which is comforting.

At about 8:00am we walk over to the Excel Centre, where we will spend most of our time for the next four days. This is where we will be doing the dealing simulation. Once out of the lift on the second floor we are met with the longest corridor I have ever seen in my life – it conjures up images of "The Shining". It is about 400 metres long and takes about five minutes to walk.

Once at the lecture room, we are split into six banks, three people in each, called: Tiger, Baboon, Cheetah, Giraffe, Eagle and Gorilla. Luckily I am in the same group as Noora, Tiger Bank. Our other teammate is Per Kvarnstrom, Sveriges Riksbank.

At 8:30am the instructors of the course introduce themselves, they are Mike Eastaway of NAB, Sydney; Chris Howlett of ACI Australia; Colin Lambert, Profit & Loss. They will manage the course and act as customers and central bank – under the name Zoo.

Eastaway begins by giving us a presentation on spot foreign exchange, explaining how FX transactions arise, who makes up the FX market, what influences the market, and how it basically works, as well as details spot market concepts, including how spot rates are quoted and what a price maker and price user are. This provides us with the basics for the rest of the course.

Kevin Conlon from the Society of Technical Analysts then gives us a comprehensive talk about technical analysis. He explains how graphs can be used to represent the market. He uses bar charts and candle graphs to illustrate his points and explains how to interpret them.

Finally, we are introduced to the Saxo Bank trading game in which we will be able to trade in real markets, on their electronic trading platform. Those with the three highest closing amounts will win. I decide to buy dollars against the South African rand, just because of a hunch I have about the rand depreciating. This game is done during our own break time. So even then it is trading, trading, trading.

Before our first dealing session begins, Howlett outlines the dealing simulation rules. We are shown specifically how the market operates, how participants need to operate, what limits are, quoting procedures and behaviour. This information proves invaluable to us.

Howlett explains to us that each team has a link to voice brokers, other banks, via telephone or direct dealing machine and that during each session one team member will act as a voice broker, one as a position keeper and electronic trader and the third as a chief dealer. Candidates switch throughout the course to ensure each plays every role.

Session 1
During the first session, I was position keeper. I had to monitor the electronic trading platform, and update our market position on a sheet by writing what we had bought/sold to the other banks. We were all finding our feet at this point so the simulation began quite slowly with very little noise.

Session 2
This time I was elected as broker, so instead of sitting with my other team mates as before, I was placed on a table with five other people chosen to be brokers. I did not broke my own bank during this session, I had Giraffe. The broker, who was running the broking desk, wrote the big figures down on a board so that we could keep track of the market. He began by giving us a lesson on the language that we should use at the table which became quite confusing when everyone was shouting. As a broker, you are an extension of the bank that you are representing and you do exactly what they say. If they ask you to quote a price "20/25" then you shout it out to the rest of the table, with your hand out, shaking. If a broker shouts back yours or mine, then you tell your bank yours or mine and you have effectively bought/sold at 20/25 as if you were acting as the price maker – OK got it...

I found broking lots of fun; very noisy and tiring. You also have to watch everyone very carefully, and listen to what is going on as you may miss putting a bid/offer in, which may lose your bank pips.

Day 2, Wednesday
We begin by discussing how the previous dealing session went. Mike and Colin ask each of our teams how we felt we did, where we thought the market went and what our strategy was. This is a good exercise as it makes us analyse our strategy.

Method & Psychology of Trading by Roger Hawes from the Royal Bank of Scotland was long, but gave a good understanding of the trading structure and what it takes to be a dealer. Forward FX presentation, by Chris is interesting, but complicated, wish I had had more time to go over the equations (although we did get hard copies of all presentations at the end of the course to keep practicing).

Session 3
I am chief dealer – well really it is my turn but I am not looking forward to it. I find this session exceedingly frustrating, I do like being in control but I find it confusing to handle the phones as well as to monitor what is going on, on the screens. The broker is on speaker, shouting prices, and Zoo Bank has decided to make it more interesting by giving us economic data amongst the rolling news that could affect the market. In this position you have to make judgments on where you think the market is going, this is difficult when you have banks and the broker asking you to quote prices. I did not enjoy this session, as chief dealer it was very easy to be overwhelmed and to panic, but it taught me that I need to know what my position is and that I have to decide where the market is going, this may be based on a hunch or on the graphical data we have been given on the screens or where the market has been going in the previous session, although I quickly realise that customer business really helps either give direction or as an opportunity to make money.

The night time trading was fabulous. It started after dinner and tested our endurance. It clarified market maker, market user, and the mine and yours concepts. It also taught us about price discovery and the importance of relationships. We separated into our banks and set up in different parts of the hotel bar. Per was our chief dealer, giving out prices to other banks while keeping our position at the same time, while Noora and I ran around to all the other banks to get prices for 10 million Eur/Usd and to help Per find where the market was. Per, cigarette and glass of red wine in hand, seemed to really enjoy it. He kept on shouting across the room, "Jen, Noora where is the market?"

Zoo also took part and kept us on our toes. Lots of the teams made money in this session, through arbitrage, because Zoo was quoting some very good rates back to us for once... Zoo also tested our understanding of what we had learnt during the day and our discipline. For example, they would ask us what the big figure was, when we came round asking for prices and easy as that sounds, when you have no screens or phones and the market is really moving it can be a little dangerous.

This session finished at about 1:00am so I literally fell into bed.

Day 3, Thursday
Beginning to feel like this is boot camp, I was up at 6:30am again – but at least I hadn’t been woken up like some banks who had had their overnight orders executed.

Entered our overnight trades into our computers and discussed how last night’s session went.

The presentation by Chris about "what risks are we running?" was very interesting. It gave us a look at the wide range of risk considerations that must be made when entering into a trade. It also outlined how to measure risk revealing a variety of measurement techniques, but highlighted that if risk is not measured or at least recognised, then it cannot be managed.

Session 5
I am position keeper again and I think I am getting the hang of things. I like being in this role as it allows me to step back and look at what is going on without being interrupted constantly. This way I am able to feed information to the chief dealer so that they can make informed decisions. Things begin to speed up at this point and the noise begins. Zoo Bank comments that at one point, above all the other shouting, they could hear me berating our broker for not putting the price in as we quoted it – I am definitely getting the hang of this!

During the night time trade I was chief dealer, and Per and Noora went out to find the market for me. This time it was more difficult, Zoo Bank were not as generous. The market was going down, so I began giving prices lower than the market rate. However I did not give low enough prices so the other banks still sold to me. This session was a low-point and I found it frustrating. I found that I was very long, and over my limit, but a customer (Zoo) came round and bailed me out by buying 100 million Eur/Usd. We finished off at about 2:00am, so was feeling pretty tired, also we had to put in more overnight stop orders and Zoo threatened to call some of the chief dealers. So I wrote everything down and hoped that they wouldn’t call me.

Day 4, Friday
No night time call, thank goodness, but up early again.

I am broker again, I am looking forward to this, but it turns into a bit of a disaster as I start to get confused with the mine/yours concepts. Just when I thought I was getting the hang of things. Helen Burgess, EBS, also has a tough time she is brokering for Baboon and James Witt, from UBS is the chief dealer and he is tough. I could hear him from the second room, shouting at Helen, "Mine and yours!" and then, "DID YOU GET IT?" Helen kept her cool though and kept going. This is an example of how heated things could get and also the need to stay focused, disciplined and (most importantly) to communicate properly.

Insider trading, as well as an outline of the Code of Conduct was explained during the regulation and compliance presentation, by the Financial Services Authority. This gave us insight into what could happen if we did not follow the Code of Conduct.

At the end of the day we were given a test, it was multiple choice. I found it hard, but we all got above 60% so we all did pretty well.

After this, we had a well needed break, after which we went back to the Excel centre where we listened to Martin Mallett, chief dealer of the Bank of England, about the role of the central bank. It was very interesting as he explained the role of the Bank of England in the market and its philosophy.

Finally, we had the presentations. We all received certificates saying that we had completed the course. Most profitable bank was Eagle bank, which included Ana Ujevic, Privredna Banka Zagreb; Christopher Fisher from EBS; and Anthony Skitini from NordLB, they will have their names engraved on a shield, which is sponsored by Profit & Loss. Dealers’ Dealer went to James Witt, UBS Warburg – I voted for him – and there were prizes for the most competent bank, Baboon Bank, comprising, of James Witt; Andrew Mullins, EBS; and Karl Falzon from the Central Bank of Malta. Best broker was Mark Marston from Reuters in London, and best exam result was by Mark Allan from HSBC- Private Bank, in Guersney, who got 98.5%.

We made the last walk down the corridor, exhausted from the last four days continuous trading, but happy that we had got through it all. A couple of us stayed behind well into the night drinking to the success of it.

Although I found this course extremely demanding, tiring and frustrating, I also really enjoyed it, and I also got to meet a variety of people, I would otherwise never have met. I learnt a lot about spot trading, I now have a better idea of how the market works and how difficult it actually is to be a trader. I was also able to do this in a safe environment, (which was great because our team lost a lot of money).

It also gave us a realistic representation of how trading is done in the real world and the amount of stress that one has to cope with. We were also given very informative presentations from current and past market participants each with years of industry experience. I also was able to meet people in the market and to establish relationships with other course delegates. Everyone I spoke to after the course said that they had had a brilliant time and that they now felt more confident about taking the leap into trading.