After talking and corresponding with hundreds of traders global macro and otherwise over the last several years here are a few things that they learned the hard way. A few of the rules may sound cliche but they are the truth and they are time tested principles of successful trading.
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.
Understand Opportunity Cost: In order to apply this to your trading you have to first look at what it means. Opportunity cost is what you are missing out on by making a choice. If you are in XYZ and you have no more capital then you may be missing the potential to make five times in ABC. Make sure that you are weighing the risks and the rewards before making a trade.
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.
Well Being: A lot of traders underestimate the value of having good health. Study after study prove that the better your body is, the better your mind can function. Of course the better your mind functions the better you will be at trading and you will make more money.
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.
Understand Opportunity Cost: In order to apply this to your trading you have to first look at what it means. Opportunity cost is what you are missing out on by making a choice. If you are in XYZ and you have no more capital then you may be missing the potential to make five times in ABC. Make sure that you are weighing the risks and the rewards before making a trade.
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.
Well Being: A lot of traders underestimate the value of having good health. Study after study prove that the better your body is, the better your mind can function. Of course the better your mind functions the better you will be at trading and you will make more money.
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 for investors and traders that are looking for actionable global trading ideas.
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