Fool, learn to read! This is all I wrote in response to, "Batten down the hatches!" "Instability cause panic. Panic causes a rush back to the US dollar. If there is to be instability, Short CAD and Long USD!" This is a hypothetical. IF THERE IS TO BE INSTABILITY! I NEVER EVER said there would be instability!!
I NEVER said I am an expert. I did say that a "Person" can be an expert. You attacked me with a reference to my day trading. I AM a beginner as a day trader. However, with 10+ years analysing the world economy as a whole, I have considerably more knowledge at the macro level than that of a rank beginner. My education is as an economist. Day trading was a recommendation from a Prof as a brief exposure to the world of stock markets in the short term.
Ok, so as a person with 10+ years of experience in analyzing macro trends, why did you not attempt longer term swing trading, to potentially capitalize on your knowledge? Why did you choose daytrading, a segment of trading that involves a very different skill set? Also, it is very odd on this board for someone to post that they lost their daytrading virginity one day ago and detail the $50 loss limit and 100 share lot experience and then take the reigns on another thread and start posting all these macro calls and scenarios as if you'd been in the biz for awhile. Just a very unusual combo....one would think a person with 10 years experience would be actually trading the time frames they know best.
Actually, studies have shown that you are more profitable focusing on the extremes: either day trade with low fees, or trade for the long term. Swing trading is generally less profitable. I'll try to find the studies for you. I think it is a mistake to restrict yourself to a single perspective. Understanding both is important. The Macro depends on the Micro. They are not mutually exclusive. Consider that the Bank of Canada and the FED regularly make choices about the macro economy that intentionally influences the day trader. "The Canadian dollar is too high; we may need to take action to lower it." The day trader becomes bearish. Down goes the Canadian dollar, for a while until they become bored and immune to these comments, then BofC has to take further actions to influence the dollar.
This is another reason why I am longer term bearish on the CAD. A higher Canadian dollars has a negative effect on Canadian exports. This puts pressure on the Canadian GDP. A high Canadian dollar isn't sustainable. Many have suggested that the Canadian dollar at 92US cents is more reasonable. Going ahead several years you will see the Canadian dollar head towards this more sustainable level. Also, you are going to see much higher inflation in the US. This will drive their interest rate up. Our high Canadian dollar is deflationary. Our interest rates won't rise as quickly. This is CAD bearish.
Stopped out doing what? This was a wonderful day to short CAD. I wish I could trade FOREX. I don't have that luxury where I work. At least, not directly.
Oh Bhardy.....you have a LOT to learn about daytrading. It's ok, we've all been there. I've been doing this fulltime for over 11 years. I think you're going to quickly find that all your macro knowledge will be rather meaningless in a daytrading environment. Wait, and it prob won't be too long, until the day where you run into a market that goes against all the macro sense in the world (according to traditional understanding of what 'should' happen) YET the underlying price action is clear. I know guys who have lost their shirts trading based on what they 'think' should happen given macro news rather than what the mkt was actually "saying". I think you should have several months of full time daytrading under your belt before you make such definitive statements about what is or isn't helpful. I think you'll have a better perspective then.
Actually Fireplace, I don't pretend to suggest that applying macro principles to short term trades is a good idea. However, understanding the consequences of macro decision made by the Bank of C or FED, for example. is very relevant to day trading. For example, here we are now at a point in the interest rate cycle where interest rates are at an all time low. We've got a thread starter here called Bond_Trader. Do you think maybe just maybe his choices will be somewhat different in an interest rising environment than they would be in an interest falling environment. After all, what happens to the capital gain when interest rates are rising? Does it make sense to buy and hold a Bond in this environment? How about swing trading? I think this is an ideal time to trade bonds in the short term. (Ideal, only because a buy and hold provides a poor yield that is taxed in the most inefficient manner in Canada [Don't know the US rules], and a capital loss if you sell before maturity. ) My point quite simply is this: If I eventually want to help my future clients invest their money where each client has a different risk tolerance, do I not gain by having both the short term and the long term skills? For some clients it makes sense to simply buy and hold. Other clients might want a little more. I want that flexibility in my own skill set.
Again, let me re-iterate, why don't you actually day trade for several months and THEN make a real judgment on what is or isn't helpful. Remember, daytrading is very short term trading in which you leave each day FLAT. I'm not talking about swing or longer term trading here, only day trading. On any given day, ANYTHING can happen. If it were as easy as applying common sense macro to each daytrade, everyday, everyone would be rich. Daytrading is a very different beast. You'll see, you just need to get a better perspective. Right now you cannot possibly understand as you have only a day of actual real daytrading experience under your belt.