After reading, I think you will have a very different view on the "efficiency" of markets and mispricing in general.Īs for macro trading in general, the topic is so broad you'd almost have to narrow it down to get a useful answer. One thing you should look into if you do read Soros is the topic of reflexivity. Its a bit philosophical though so don't think you'll skim it and make a million, its a pretty intensive read. Still a great book that deconstructs classical economics / statistics and basically gives you a blueprint for arbitrage. I'm surprised no one has mentioned the Alchemy of Finance by Soros. Just building charts of everything that's coming out is incredibly time consuming. PMs analyze charts, econ indicators, talk to numerous sell-side analysts, build models, organize models. If you get a mix of reports, the theme isn't so clear. Every country has fiscal and monetary policies, setting government spending, interest rates, quantitative easing - these all have huge impacts and news comes out almost every day. Every country has multiple statistics on employment, inflation, GDP, manufacturing, trade, retail, consumer, financial flow, and the list goes on. I suggest looking at an economic calendar. What if you get a series of poor economic indicators? Don't you think that might hurt US equities? The PM's job is to try to capture the big swings and stay out during the zig-zags, as those are very expensive moments. You'll see that most of its depreciation against USD occurs in brief spurts of 1-2 week periods. How would you implement a dollar long strategy? Do you simply short EUR, GBP, JPY, CAD, and AUD? Take a look at JPY. Obviously this process is far more complicated than I'm suggesting and this misunderstanding stems from my ignorance on this topic which is why I'm hoping someone can explain this process in a little more detail. What I'm unclear about is what initially makes a macro trader decide to trade? There can't be that many really solid macroeconomic investment theme's which aren't rather already priced in or massively overcrowded for a macro trader to work with and even if there are I imagine that they don't require much active work to set up and maintain (if you think dollar is going to rise over the next year then buy dollars and then sit on your ass for a year). I also appreciate, as again allot of people have said similar things, that risk management is a factor which commonly defines the quality of a trader. Acting in very global markets with large amounts of liquidity allows one to drop in and out of a trade relatively easily, so if things look like they're going pear shaped you can quickly take the loss and wait for another opportunity. I get that and have heard some of it before. Thanks, I'll try pick a copy up (or find the pdf online). I just want to get a better understanding of their investment (You always seem to have very useful insights) Macro PM's are viewed as some of the smartest guys out there and the numbers themselves speak volumes about how successful these strategies can be (admittedly low volatility in the last couple of years has dampened profits but that looks likely to change). I'm not trying to insult this industry, quite the opposite. So what else is going on? What are traders at these firms actually doing? In reality are traders actively trading the markets with a fundamentally technical perspective and occasionally supplement this outlook with a specific view of where the markets are heading? And if so, what separates this from the work of a day trader, except experience/technological support/resources? I'm well aware that a macro hedge fund is designed to 'trade globally based on economic theory' but I doubt that PM's at these funds are prepared to take long term trades founded purely on macroeconomic predictions, as this would result on very few trades and I imagine a low success rate (It's hardly easy predicting the future just look how badly economists do it).
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |