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Macro Trader

There are several different types of traders and investors.  You can be a value investor, growth investor, day trader, convertible bond arb, volatility arb, currency trader, etc.  Each style has its good and bad parts to it but there is one style of trading that is superior to all of them, and that is the macro trader.

Macro trading has many great things not the least of which is that you can trade every style.  In fact the style mandates it.  Instead of pigeonholing yourself to just one type of security or just a few different trade setups the macro trader can instead trade in each asset class using any strategy.  If the economy is weakening and it appears as though the central bank is going to lower rates you can go long some zero coupon bonds.  If it looks like everything is going to tank you can go long the USD as investors flock to risk adverse assets.  If a recovery looks as though it is upon us you can go long junk bonds and small cap growth stocks as they will likely benefit the most from it.  If volatility in the currency markets is coming down you can go pick up some carry in some higher yielding currencies.

As you can see the macro trader has a lot of flexibility to go where the best risk to reward opportunities are.  Instead of looking for the best fish in one pond you can look for the best fish in the ocean.

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This entry was posted on Friday, July 10th, 2009 at 4:47 am and is filed under Investment Strategy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

One Response to “Macro Trader”

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