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  1. #1
    Veteran Member Ammeo's Avatar

    What do u think about Global Macro? !!!

    The strategy is typically based on forecasts and analysis about interest rates trends, the general flow of funds, political changes, government policies, inter-government relations, and other broad systemic factors...Like you go against the Euro cause u think its in crisis and there's no resolution in near future,in the same time you buy Australian or Canadian Dollar cause u think it'll head up based on current and future economic factors ...
    Pllzzz shed some more light aswell if i missed something regarding its definition...

  2. #2
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    By definition, yes. But practically, NO.

    You r right in saying that euro is going to loose its worth cause it is in crisis. But based on this information u cannot enter a trade coz there r many other factors affecting currencies. As u said general flow of funds, govt policies and etc. If u have ur eye on ALL of these factors and u know their effect very well, then u might consider entering a trade based on ur analysis.
    Fundamental analysis plays major role in trading. But Technical is considered to be much more effective than fundamental.

  3. #3
    Master Member vinayakm's Avatar
    Well said M.J. Technical analysis often comes to play far more than fundamental analysis. I think this is especially so in something like binary options trading.

    Like M.J. said, there are so many factors that affect the Euro or the Canadian dollar that it is often impossible to know everything. Even well-informed investors are prone to making a few mistakes from time to time.

    Global macro is a good strategy and it is used a lot by hedge funds. The problem is that everyday investors don’t have access to the kind of trading equipment and expertise that hedge funds do.

  4. #4
    Legendry Member Michael Hodges's Avatar
    All well said. Global macro, for me, is just the canvas on which the market paints its picture. The global economy is in a "prolonged period" of sluggish growth and rebuilding, there are just too many factors at play, all with hidden repercussions, to base a strategy solely on current events. The best we can do is read the charts and trade as it tells us.

  5. #5
    Senior Member Grae's Avatar
    Quote Originally Posted by Michael Hodges View Post
    All well said. Global macro, for me, is just the canvas on which the market paints its picture. The global economy is in a "prolonged period" of sluggish growth and rebuilding, there are just too many factors at play, all with hidden repercussions, to base a strategy solely on current events. The best we can do is read the charts and trade as it tells us.
    True. Even when events happen, it can take an instant or a stretch of time for the implications to register. Having a fundamental background is great for long term though.

  6. #6
    Veteran Member Ammeo's Avatar
    Global Macro can minimize the risk if u know how to use it...for example USD and EUR always go in the same direction while the AUD,JPY,Gold,Oil most of the time move in the opposite....Having a big position in USD or EUR favor (after full analysis and study) while taking some small positions in AUS or Oil may minimize the risk in long term if anything goes wrong...

  7. #7
    Master Member Bogdan G's Avatar
    Quote Originally Posted by Ammeo View Post
    ...for example USD and EUR always go in the same direction
    Could you please elaborate on that?

  8. #8
    Legendry Member willyw's Avatar
    Quote Originally Posted by Ammeo View Post
    Global Macro can minimize the risk if u know how to use it...for example USD and EUR always go in the same direction while the AUD,JPY,Gold,Oil most of the time move in the opposite....Having a big position in USD or EUR favor (after full analysis and study) while taking some small positions in AUS or Oil may minimize the risk in long term if anything goes wrong...
    USD and AUD, JPY, GOLD....currency pair will always move in opposite direction. FOR example if you are buying USD/JPY, you are buying USD and selling JPY and vice versa. In forex market curreny and USD will not move in the same direction. For currencies they can move in the same direction and in the opposite direction which we called cross-rates.

  9. #9
    Moderator Kolyo's Avatar
    Quote Originally Posted by Michael Hodges View Post
    Global macro, for me, is just the canvas on which the market paints its picture. The global economy is in a "prolonged period" of sluggish growth and rebuilding, there are just too many factors at play, all with hidden repercussions, to base a strategy solely on current events. The best we can do is read the charts and trade as it tells us.
    I think Michael Hodges explain in a best way what is Global Macro and why it is only the canvas for the market painting. This term is most often used by the hedge fund managers to describe that they rely especially on macroeconomic analyzes on a global scale in their trading, but I am not sure you could trade only on that kind of analyzes without deep look on the charts and price action day by day.

  10. #10
    Specialist Member RCox's Avatar
    Quote Originally Posted by Ammeo View Post
    The strategy is typically based on forecasts and analysis about interest rates trends, the general flow of funds, political changes, government policies, inter-government relations, and other broad systemic factors...Like you go against the Euro cause u think its in crisis and there's no resolution in near future,in the same time you buy Australian or Canadian Dollar cause u think it'll head up based on current and future economic factors ...
    Pllzzz shed some more light aswell if i missed something regarding its definition...
    I don't think its really fair to call global macro a "strategy" but, yes, I do think this is hugely important and underrated. I also would not get into a large position without some sort of fundamental (or global macro) reasoning behind the trade. Technical analysis is great for determining price levels (in binary options, this means strike prices, and possibly time frames for expiries) but it is not enough when looking to place trades with real money. The fact is, chart analysis is a self-fulfilling prophecy and it makes no sense that we should be able to trade without even knowing the identity of the underlying asset (a feature for technical strategies). Because of this, understanding the global macro situation is vital. Any trader that doesnt do their homework in this area is just lazy, in my opinion.

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