If you have not been enjoying the global macro investing results that you dream of then you may want to read this. Will it fix all of your problems overnight? No, nothing does but it will help you to improve several areas of your trading that we see lacking in most traders and their trading process.
Losses: Many traders only focus on the potential gain that they can make. All to often they ignore potential risks and of course later on down the road they suffer the consequences. Being an optimist is fine but you still must be realistic. You must evaluate the opportunity on both the upside and the downside or at some point you will blow out your account in a few bad trades that go bad.
Process is Key: The process is ten times more important then any one trade result. If you focus more on doing the same thing each time and less on the potential gains or losses in each trade your results will be far better and you will make more money. If on the other hand you obsess over each loss you will become destructive and likely try and reinvent the wheel on each new trade.
Look for Real Opportunities: Look for the best risk to reward opportunities. Many traders will stay in a trade at the expense of everything else. Between not learning how to take a loss and just a bad understanding of opportunity cost many global macro traders will stay in a position when they could have made money in a new one. Look for trades with significant upside and minimal downside. The more you do this the lower your hit rate can be.
Newsletters And Advice: While some newsletters are horrible, others are excellent and provide a great resource to global macro investors. If you are ever having a hard time finding why a move is happening then newsletters may help. If you ever run out of good idea flow then you may need an outside service to help you out.
Keep Learning: Many people come into trading after reading a book. Other global macro traders come in after years in school or from regular broker jobs. Well if you find that you aren't getting the results that you want then go find the information you need to fill in your educational gaps. There are a ton of different services, books, web sites, and courses that will teach you what you need to know about earnings, the economy, charts, statistics, programming, etc. Use these tools and don't rest on your laurels.
Health: Maybe the most under rated thing you can do is to be healthy. If you are in poor health studies have shown that you will perform at a sub optimal level. When you have thousands and millions of dollars on the line then it pays to be at optimal health. Be healthy and you will think more clearly witch usually results in better returns.
We could go over each of these for hours and hours but the reality is that most people know at some level that they need to improve but human nature allows to to far too easily skip some steps while looking for shortcuts. Become efficient, not lazy and you will become a great global macro trader.
Losses: Many traders only focus on the potential gain that they can make. All to often they ignore potential risks and of course later on down the road they suffer the consequences. Being an optimist is fine but you still must be realistic. You must evaluate the opportunity on both the upside and the downside or at some point you will blow out your account in a few bad trades that go bad.
Process is Key: The process is ten times more important then any one trade result. If you focus more on doing the same thing each time and less on the potential gains or losses in each trade your results will be far better and you will make more money. If on the other hand you obsess over each loss you will become destructive and likely try and reinvent the wheel on each new trade.
Look for Real Opportunities: Look for the best risk to reward opportunities. Many traders will stay in a trade at the expense of everything else. Between not learning how to take a loss and just a bad understanding of opportunity cost many global macro traders will stay in a position when they could have made money in a new one. Look for trades with significant upside and minimal downside. The more you do this the lower your hit rate can be.
Newsletters And Advice: While some newsletters are horrible, others are excellent and provide a great resource to global macro investors. If you are ever having a hard time finding why a move is happening then newsletters may help. If you ever run out of good idea flow then you may need an outside service to help you out.
Keep Learning: Many people come into trading after reading a book. Other global macro traders come in after years in school or from regular broker jobs. Well if you find that you aren't getting the results that you want then go find the information you need to fill in your educational gaps. There are a ton of different services, books, web sites, and courses that will teach you what you need to know about earnings, the economy, charts, statistics, programming, etc. Use these tools and don't rest on your laurels.
Health: Maybe the most under rated thing you can do is to be healthy. If you are in poor health studies have shown that you will perform at a sub optimal level. When you have thousands and millions of dollars on the line then it pays to be at optimal health. Be healthy and you will think more clearly witch usually results in better returns.
We could go over each of these for hours and hours but the reality is that most people know at some level that they need to improve but human nature allows to to far too easily skip some steps while looking for shortcuts. Become efficient, not lazy and you will become a great global macro trader.
About the Author:
Jeff works at TheMacroTrader.com Which publishes a weekly newsletter on macro trading using ETF's. TheMacroTrader newsletter Is a great resource to investors looking to trade different asset classes across the globe.
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