I graduated from university with an economics degree. Its what I wanted to do above anything else and I enjoyed it. It equips you with basic economic tools of logic for coporate success and for understanding both national economies and the world economy. Given all that, you may find surprising the view I'm going to express. Its this: I see little relevance in economics helping you become a successful individual trader. With or without a university education, you require a problem solving mind to see how to trade productively (namely daytrade). And you need to take the optimum points from the days session of the market you decide to trade. Two things are required. As mentioned you need a keen problem solving mind but also you need to have a temperament suitable for trading.
If you are taking a trading as a business, economics is very important. Though you dont need to know all the aspects, but it is important to know the basics
The National Science Foundation funds econ projects and programs. They run the gamut becuase RFP's are used and you can also get sole source funding that is specifcally unique. Some of the NSF funded products are quite hunorous and niave it turns out. Economics ha had great value for me. the benefits came from three areas of econ: 1. marginal analysis 2. economic cycles, and 3. Supply and demand. Turning points occur relatively rarely compared to trend continuation. differentiating the transition from continuation to change s more important than the ease of carving turns (which is a drill down function). While trends over lap it is most important t know when an overlap is comeing into view. All economic cycles involve (as has been pointed out) the sentiment and feelings of participants. this psychological aspect of trading is well addressed in economics and quite a glossary and differentiation of moods and mood changes is a keen resourse. Sentiment changes at rate of four times the price cycle. It is good to know which of the four aspects is in vogue as the price cycle moves forward or retraces.... Supply and demand allows one to get straight how the minority and NOT the majority controls the market. This is the major source of the counterintuitive nature of the markets. Econ case studies often bring out how the minority leverages its role over time. One of the most delightful aspects of trading is anticipation; it is most evident when regarding when the minority changes sides and leaves all those limit orders high and dry at DOM walls. the above three items have a common aspect. You can drill right on down the the market's granularity and they are still valid. Footnote: I met one of my econ profs at an annual awards meeting of NSF. He was with a physics prof I had also. We all agreed that the problem solving aspect of econ was a really immense tool to be able to apply.
Understanding the current global macroeconomic environment will allow you to be able to create the real wealth that you seek. You must understand the government forces, central bank agreements, and hedge fund bets, as well as the political environment of the day. Just for instance, most people forget that saudia arabia basically agreed that 75-80 dollars per barrel for oil is a fair price for the world. This agreement was put into place after the financial meeting in switzerland during march of 2009. Guess what? During the past year, oil has been fluctuating between 70 and 80. Of course it goes a bit over, or under at times, but always is forced back to the mean by the inventory reports, due to the world powers colluding together. You can do this with treasury trading, or stock. Imagine buying every dip this year, because you knew that global central banks were creating a coordinated asset purchase policy. That's just a taste of how you should be trading.
Well, I read David Rosenberg everyday.. But really its been like preaching Christianity to Atheists... or Celibacy to Ravers... its been a hard time for his particular intellect during this bear Market rally. Its been the same thing for Don Coxe as well. Its an environment where the truth is hidden away, but the bar has been wide open. This particular characteristic has created a biased Market, not just now, but for 10 years now. Only a few economists have got it right, but the interventionists with their political bent have got it even more "right" Its only very recently that accurate monitoring of credit and monetary realities in conjunction with main street psychology has led to folks like Rosenberg and Coxe being right. So my point is, its a rare breed of economists on the whole that are capable of becoming profitable traders. In general, its a highly consensus profession.
I think the value of generic economics is debatable for a trader (not the worst thing you could study though) but econometrics is incredibly useful.
Economics is sometimes very useful for longer-term trading and investing. For daytrading it is almost useless. Note that there is a big difference between having taken an economics degree, and developing some understanding of the economics of financial markets and asset prices.