Global Macro Trading

[Copernicus]

Quote from candletrader:



I second that...

did both of you pikers read post #1?

"I'm new to this board, but it seems to me that most traders here are primarily TA orientated and trade on a very short term basis. Which is surprising to me because from what I've read all the best professional traders are Macro orientated.

So I would like to know if there are any traders on this board who use Marco strategies?
"

 

[OTCkrak]

Quote from dhpar:

I consider myself a macro trader despite the term being a little bit vague.
In fact I consider anybody a <i>macro trader</i> as long as he/she trades multiple asset classes at the same time with <i><b>one</i></b> particular strategy in mind.
You simply try to exploit a particular political, economical or social disequilibrium via combining different units of each asset class given their (changing) correlations.

I do not believe that global macro is necessarily a more successful strategy than any other. It is true that there is more money on the table but it is also true that volatility is much higher. You need better capitalization largely to be able to withstand this volatility.

the Macro Trader you are expressing in my mind would need to be heavily capitalized such as an institution . I dont think a trader with less then a million dollars liquid can utilize this strategy correctly. brings to mind the idea of comparative advantage

 

[crgarcia]

You always should do some big picture analysis, but keep reality in mind, when theory (economic analysis) and reality (charts) diverge, always go for reality.

To go global, would advise to trade some ETFs based on foreign markets.
Trading global markets directly is too difficult and risky for an individual trader.

 

[good one]

Quote from candletrader:

I am getting more into it as part of my position trading...

The book "Inside the House of Money" (Steven Drobny) is an excellent read and is the macro trading answer to the more general Market Wizards series...
http://www.amazon.com/Inside-House-..._bbs_sr_1/002-4523437-1741642?ie=UTF8&s=books

It is not an understatement to state that if you enjoyed Market Wizards (and who didn't?) you will thoroughly enjoy reading about how these hedge fund managers do global macro...

without question, amazing overview of global macro trading by big guns.

biggest thing i got from this book is there is no way i want to play against these guys and even try to put on a global macro strategy. didn't one of the managers fly to siberia to check out a russian mining stock? you can't play that game from the retail side.

 

[dhpar]

Quote from OTCkrak:

the Macro Trader you are expressing in my mind would need to be heavily capitalized such as an institution . I dont think a trader with less then a million dollars liquid can utilize this strategy correctly. brings to mind the idea of comparative advantage

agree - it is better to have more than $1m when you intend to do global macro. As I said in a previous post: "You need better capitalization largely to be able to withstand this volatility".

 

[Spectre2007]

macro =)

1) liquidity
2) cost of money (ie interest rates/carry trades)
3) monetary cycle correllation globally
4) political predilection towards/inflationary tendencies


liquidity ^ asset class = as global liquidity increases asset classes increase of different nature.

cost of money, when short term or overnight rates are miniscule in comparison to other rates, money will be borrowed there cheaply to fuel speculation in overseas markets.

monetary cycles usually correlate in different nations, some nations lead the world and others lag to a degree. Some policy makers appointed by politicians can be inflationary in nature or deflationary.

some markets can open up fueling growth. ie Russia/China/India/....eastern europe. So knowing all these why doesnt everyone make money? People lose sight of the overall trends and get lost in short term movements of markets. These macro trends persist for years, and inflection points are political changes or sentiment changes.

so where is the world now?

1) equity up
2) bonds down
3) dollar down
4) commodities up
5) real estate up

lot of the speculative wealth created to some degree is being funneled into US govt bonds. Thats why we have been enjoying artificially low rates. But secondary to political consideration Oil will be kept low in price. Stockmarkets will be kept high. Just some thoughts.

 

[inet]

Quote from Spectre2007:

macro =)

1) liquidity
2) cost of money (ie interest rates/carry trades)
3) monetary cycle correllation globally
4) political predilection towards/inflationary tendencies


liquidity ^ asset class = as global liquidity increases asset classes increase of different nature.

cost of money, when short term or overnight rates are miniscule in comparison to other rates, money will be borrowed there cheaply to fuel speculation in overseas markets.

monetary cycles usually correlate in different nations, some nations lead the world and others lag to a degree. Some policy makers appointed by politicians can be inflationary in nature or deflationary.

some markets can open up fueling growth. ie Russia/China/India/....eastern europe. So knowing all these why doesnt everyone make money? People lose sight of the overall trends and get lost in short term movements of markets. These macro trends persist for years, and inflection points are political changes or sentiment changes.

so where is the world now?

1) equity up
2) bonds down
3) dollar down
4) commodities up
5) real estate up

lot of the speculative wealth created to some degree is being funneled into US govt bonds. Thats why we have been enjoying artificially low rates. But secondary to political consideration Oil will be kept low in price. Stockmarkets will be kept high. Just some thoughts.

What is your point on "Oil will be kept low in price" ?

 

[Spectre2007]

if oil escalates further, the democrats will use it against the republicans, the republicans and the saudis will keep oil contained till the elections are over.

the democrats will launch price gouging investigations or other tactics against the oil companies.