Managers of Global Macro Traders
Since the stock market crash of 2000 to 2002, hedge funds have been Wall Street’s darlings. Over the last decade, the hedge fund industry has grown by leaps and bounds as it has produced outsized returns with less than market risk. While hedge funds continue to outperform traditional investments such as mutual funds and managed accounts, the hedge fund industry, in general, has been less than stellar throughout the market bloodbath of 2008, when we saw several funds blow up and others fall by 20, 30, and even 40% when they were supposedly “hedged.”So, in this article, we are going to tell you all the basics of global macro trading.
Global Macro Trading
Macro trading hedge funds have performed admirably throughout this period. Global macro currency trader/ managers such as George Soros, Bruce Kovner, Peter Thiel, Brevan Howard, and Ken Tropin have been able to thrive.
If not survive, throughout this period as a large amount of money has flowed back into the coffers of global macro traders, which were once the largest style in the hedge fund universe.
So, what distinguishes these macro trading managers, who have outperformed the market in both good and bad times, from the rest of the hedge fund universe? The most significant distinction is that in a global macro trading strategy, you have a much broader and all-encompassing mandate than in any other strategy.
Read complete details about global macro trading strategy HERE…
Global Macro Currency Trader
Long short equity implies trading stocks, macro implies trading any asset class anywhere on the planet. If you use a fixed-income arbitrage strategy, you should stick to fixed-income instruments. However, as a macro trader, you are expected to identify the best asset class to fit whatever situation you see in the global economic environment. Essentially, you have the necessary flexibility to profit from any situation.
Global Macro Managers use a global macro trading strategy to help people profit and navigate the global financial markets. Macro Managers spotlights the world’s best Macro Traders.
Why Global Macro Trading?
We hope that this article will educate you on what global macro trading is and what some of the benefits of using a global macro approach are.
Of course, the first question is, what exactly is global macro trading?
The short answer is that global macro trading is an extremely opportunistic approach to global financial markets. In search of high-risk-reward opportunities, the global macro trader will trade any asset class in any location on the planet.
We can trade bonds in Namibia if they appear to be very appealing and are sufficiently liquid. You can trade stocks in Singapore if you like them.
Are you looking to buy the Yen against the Swiss Franc?
If this is the case, macro trading is for you. Essentially, macro traders are the most opportunistic traders on the planet, trading the cash or derivative markets of almost anything where they see opportunity.
While there is a popular misconception that macro traders are daring to risk-takers, the facts tell a different story. According to research, macro has been the best performer on both an absolute and risk-adjusted basis since the inception of their database in 1994.
In contrast to most managers of any style, macro came out of 1998, 2000, and 2008 debacles unscathed, and even profitably. The global macro trader job is not a game of chance. Rather, it is one of the most analytical investing styles available.
Why Not Other Investments?
This leads us to the next question:
What distinguishes global macro trading from other types of investment?
Because many managers are pigeonholed into one style and one asset class, whereas their global macro counterparts can go where the money is and not be stuck riding a dead horse at times, flexibility helps to explain this.
Another significant advantage of macro traders is that the majority of managers are among the most disciplined risk managers in the world. They understand that anything can happen and that they may be wrong. So rather than riding a loser all the way down, they will get off when they are proven wrong.
Overall, global macro traders are successful because of their strict risk management, and ability to trade anything from anywhere. When you compare that to your typical long-only stock fund manager, you can see why he lost 40% or more during the last bear market while the typical macro fund manager gained 4%.
So, these are the basics of global macro trading, and why you should go with global macro trading. Hope this article helps. For more basic information, please stay connected to the Future Stock Market blog. Till then HAPPY TRADING 😉
I offer these data and analysis just for information, and for educational purposes. If you're investing or trading please do your own research before making any trading or investing decision.
Stock, Stock and Stock was the only thing that kept going through my mind the whole time, I started learning it, and in little or no time, I learnt a lot. I decided to focus less on my 9 to 5 job and ended up making this blog. I turned my passion for Stock investment into my work, and I am glad I took that step to change my life for the better and excitement 😉