Global Macro Trading

Discussion in 'Trading' started by OneHipCat, Apr 24, 2004.

  1. 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. Quite clearly global macro is not for a beginner - beginner does the best to focus hard on one (and only one) liquid risk factor.
    Everybody needs to find what fits him the best. Some people are great in analyzing individual companies and can make killing on it(e.g. via pair trading in long/short strategies, Distressed etc). Some like to focus on a larger picture.
    Your educational background may also point you in what particular strategy you become more specialized. For instance, for global macro, it is worthwhile to have degree in economic theory, econometrics and political theory. Likewise you need to be a lawyer (and much more) to understand Distressed.
    Lastly, even if you trade global macro you always get tempted by alpha <i>micro</i> strategies - like long/short. And of course vice versa...
    gl in 2007
    #11     Jan 2, 2007
  2. Copernicus,

    Drop the condescension... it makes you look foolish...

    The third line of your first post is restrictive and incorrect... and your next post is contradictory in respect of the first post, in that FX trading (irrespective of whether it is a pair trade or not) is not capital intensive...
    #12     Jan 2, 2007
  3. Daal


    No. Through mutual funds and etfs you can get exposure to just about any equity market in the world, it might not be optimal but its possible. Same thing for currencies through FX brokers. Bonds are a little more difficult but there are some pimco funds that invest on those. Plus you can always just open a brokerage account at the country you want exposure
    #13     Jan 2, 2007
  4. exposure does not equal macro trading.

    the whole secret of macro trading is finding the specific instrument thats mispriced....
    #14     Jan 2, 2007
  5. dhpar


    yeah. but when you find such an instrument then you need to take an exposure to it - smartee. That was pretty useless post Copernicus...

    By the way I am not sure about ETFs. In principle maybe - but in practice you need to play it with primary instruments (liquidity etc.)....
    #15     Jan 2, 2007
  6. how do you take on the specific exposure to the specific instrument by buying/selling etfs?

    you are looking for exposure to whatever is mispriced, not the ETF...

    on top of all that, lately macros are going more the local emerging market way, there are no etfs to invest on that level.
    #16     Jan 2, 2007
  7. dhpar


    <u>I said I will not defend ETFs</u> - that's not the point of the thread!
    But in fact I believe that if somebody wants to see how global macro works with less vested capital then ETF may be a good testing ground. It is not for serious players though.

    I do not understand your post anyway. ETF is simply a repackaged risk factor - there are many ETFs for primary and secondary risk factors - you can for instance believe that copper is mispriced vs aluminum due to the recent supply story or whatever and play it via ETF. There are lots of emkt ETFs on top of that .

    Don't only read books - get hands dirty.
    #17     Jan 2, 2007
  8. the point of this thread is that you cannot be a macro trader working at a place where 99% of people on this forum work.

    or maybe you can, along the same lines as few are running "hedge funds" different names/meanings for different things.. depends how you want to interpret it.
    #18     Jan 2, 2007
  9. dhpar


    what a wise observation...sorry, what do you try to say now for a change? Make your point sharp and clear or shut up....
    #19     Jan 2, 2007
  10. :D

    I second that...
    #20     Jan 3, 2007