Global Macro and Commodity Trading
The typical image of the floor of the Mercantile Exchange being filled with a bunch of guys that couldn't get jobs anywhere else is very outdated and wrong. Instead commodity traders are increasingly becoming some of the most sophisticated investors on earth.
The largest group of traders are the upstairs traders, to differentiate them from the floor traders. Inside of the upstairs traders that largest group is that of the systematic long term trend followers. The next biggest group of commodity speculators are the global macro traders.
Global macro traders are the next major group of players in the commodity markets. Some are heavily involved and some barely trade them but all macro traders track the commodity markets to give them a better look into the worlds macro economic situation.
In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP's and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.
One area that also gets a ton of attention is that of precious metals. Precious metals have a small piece of the industrial machine but mostly are used as an inflation hedge and as an asset backed alternative currency as more and more of the fiat currencies look long term bankrupt.
Another huge piece of the economic pie is that of industrial commodities. Industrial commodities comprising aluminum, zinc, lead, tin, nickel, iron, copper, etc are used in everything for everything. If you drive it, plug it into the wall, or live in it then you have industrial metals all around you. And you only need to have accounts with access to three exchanged to trade 95% of all this.
Agricultural commodities are the last major group of commodities and the ones that tend to get the shortest thrift. This is a mistake as the worlds economies continue to grow and more and more people become more prosperous they eat better and better. This coupled with the fact that there is less water on earth and you have the potential for a large increase in the price of food worldwide.
Obviously commodities are huge part of the global economy. If you are not using and monitoring them you are missing out on some of the biggest puzzle pieces out there. If you are a global macro trader you need to be monitoring all the commodity complexes. - 23221
The largest group of traders are the upstairs traders, to differentiate them from the floor traders. Inside of the upstairs traders that largest group is that of the systematic long term trend followers. The next biggest group of commodity speculators are the global macro traders.
Global macro traders are the next major group of players in the commodity markets. Some are heavily involved and some barely trade them but all macro traders track the commodity markets to give them a better look into the worlds macro economic situation.
In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP's and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.
One area that also gets a ton of attention is that of precious metals. Precious metals have a small piece of the industrial machine but mostly are used as an inflation hedge and as an asset backed alternative currency as more and more of the fiat currencies look long term bankrupt.
Another huge piece of the economic pie is that of industrial commodities. Industrial commodities comprising aluminum, zinc, lead, tin, nickel, iron, copper, etc are used in everything for everything. If you drive it, plug it into the wall, or live in it then you have industrial metals all around you. And you only need to have accounts with access to three exchanged to trade 95% of all this.
Agricultural commodities are the last major group of commodities and the ones that tend to get the shortest thrift. This is a mistake as the worlds economies continue to grow and more and more people become more prosperous they eat better and better. This coupled with the fact that there is less water on earth and you have the potential for a large increase in the price of food worldwide.
Obviously commodities are huge part of the global economy. If you are not using and monitoring them you are missing out on some of the biggest puzzle pieces out there. If you are a global macro trader you need to be monitoring all the commodity complexes. - 23221
About the Author:
If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro investing advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.
posted by X - Men @ 10:05 AM
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