The strategy defines exactly what to do based on the data points provided. Systemic strategies are often programable, meaning the rules are precise enough to be fed into a computer and have it decide what to buy and sell. Systematic Macro: This approach is more rigid and rule based.Essentially, based on their analysis, they can trade how they want with this information. They are not limited to going only long or only short, or only trading certain assets or in certain countries. The macro trader does their analysis, whether fundamental or technical, and then deploys capital as they see fit. Discretionary Macro: This approach allows flexibility and discretion.Value investing and growth investing strategies are also micro trading strategies because they focus on individual assets as opposed to broad-based trends. Buying an individual stock based on its technical analysis outlook or earnings per share is an example of micro investing. On the other hand, micro investing is analysing individual assets to determine where that asset’s price may go. They may use fundamental analysis of economies and countries to assess where the economy is likely headed, and then make investments based on those assumptions. The investor considers whether commodities are rising or falling and the direction of interest rates. They look at whether the economy in that country is doing well or poorly, and what the political situation is like or may become, in order to find potential trading opportunities. Rather, the macro investor looks at whether profits are rising, on average, within a country for most companies. Macro investing is not concerned with the profit levels of an individual company.
For example, if the outlook for India is strong, a global macro investor based in the UK may buy Indian stocks, and at the same time, may short stocks in Russia and sell the country’s currency if its outlook is weak, for example. While some macro traders may only look at the macroeconomic conditions of the country that they’re based in, some around the world take a global approach and may invest in, or short, the different assets in different countries. For example, if a macro investor believes that the US economy is heading towards a recession and predicts that stocks may decline, they may start shorting a wide array of stocks or stock index ETFs. Macro investors may buy or short stocks, bonds, currencies, commodities, and exchange-traded funds (ETFs). They may get this information from analysing economic indicators. If the outlook is weak, they may short assets that could decline. If the outlook is flat, they might choose to stay invested in cash or low-risk interest bearing instruments. If this outlook is favourable, investors may buy assets that appreciate in such conditions.
If you are not an institutional investor and you think you'll miss Alf’s analysis on TMTF, his timely macro strategy pieces and trade ideas are available also in podcast format on TheMacroCompass.Global macro trading looks at major trends occurring on a country or global level. Going to miss Alf’s views on TMTF? No worries!Īlf offers a bespoke service for institutional investors where he provides dedicated research and trade ideas leveraging on his experience running money and having been in your seat before (all also available in podcast/audio format like TMTF!) - send us an email at to discuss a deal! Also remember to follow Andreas at on Twitter.
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In a few episodes, The Macro Trading Floor is about to stop for a while: want to keep up with Andreas and Alf’s macro views? In this episode, Alf and Andreas discuss the decisions from the Fed, ECB and Bank of Japan.
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