The information flow avalanche. You see it happening every day.
The huge amount of information produced by analysts, commentators, bloggers, etc, all yapping and yapping. So many voices, information, interviews, books, articles. All this talk about China, Greece, GDP, money supply, consumer confidence, etc.
You may be wondering how to cut through the clutter. And you are absolutely correct, that is exactly what you must do – cut through the nonsense out there.
Methodology and Working Smarter
As Joel Greenblatt said in the book Hedge Fund Market Wizards:
“I think the difference between those who succeed and those that fail is how they think about the market. Everyone is bombarded every day with price movements, explanations for those price movements, macro events, and lots of other information. You need a methodology to cut through all that information and see things as they are.”
You may be wasting hours every day on information that has no relevance and can never help you, no matter how much you read it and dig into it and analyze it. As an example from my own journey, over the years, I realized that I was wasting a whopping 2 hours per day, 5 days a week. That is 10 hours a week, 500 hours a year for a few years in a row. That is a few thousand hours that I could have been doing so many other things, such as:
- Spending the time with family and friends and entertainment
- Focusing on other information and financial instruments and trading opportunities that could yield a profit.
Anything else would have been preferable than wasting those two hours per day, due to my lack of understanding about what I call the “Order Flow and Global Macro Economics.”
I realized that I had to be SMARTER. Not work harder and longer hours. The only thing that gets you is turning old, grumpy and broke. The trick is to work smarter. Yes, you have to invest time in learning how to work smarter.
That is why some people say that youth is wasted on the young. The young guns may have more energy, but the old timers can out smart them. The old timers can think better. They have the philosophy, the principles, the scenario analysis capabilities in their mind to flex their “mental colors.” They know what information, thinking and actions are needed to generate the results – to generate the MONEY. So they can then go out and use that money for their enjoyment. While the amateurs are constantly struggling and care mostly about doing “cool” things. So they get their enjoyment for sure as well, just without the Big Money in life.
The old timers don’t have to run around like the young guns, because they have developed their minds, developed their philosophy and principles, developed their interpretation advantage, so they can make mountains of money with their mind. Or like some people who are disabled, in a wheelchair, etc. They can still be very productive with applying their mind powers.
Now a story about speaking with a WW2 veteran. He was 95 years old and still tried to be active and walk around town. I listened to his life story. Within a half hour, he poured out and told me so much. Really a wonderful experience. He eventually told me that he didn’t see that many people “doing anything with their hands.” It was clear that he was referring to the more physical labor and creation of such products, etc. He did not seem aware of the vast jobs, opportunities and businesses that have existed for decades doing things with information. Because that is what a key portion of trading is – doing things with information, making music and profit out of it. Rest assured, you must be completely comfortable with making profits with the power of your mind. You don’t have to run around all the time, or even a little bit of the time. You have to be completely OK with, at ease with, embrace it and LOVE making profits while working from your trading station for a few hours. Or if you can find trades to hold for a few weeks or months, such as The Apple Trade, then you have to be completely comfortable with what Jesse Livermore calls “the sitting and the waiting.” If you are not comfortable with making so much money from the power of your mind, so easily, then you are obviously sabotaging your trading potential.
On a side note, you can be both young and smart and rich. You can have it all. You can have your cake and eat it too.
If anyone tells you that you can’t be young and smart and rich and have to wait a few decades to gain “experience,” then IGNORE THEM. Fire them. Just as you would ignore a doctor who tells you that you won’t get well, won’t recover, etc. Ignore them, and go find the smart and bold actions. Search. Be ambitious and tenacious. Have initiative.
Click Here To Get The Free Report
Most are Peddlers of Useless Information
Back to the information overload and wasting time. I read a very important quote by Stanley Druckenmiller in The New Market Wizards:
“Frankly, even today, many analysts still don’t know what makes their particular stocks go up and down.”
I was shocked. A huge revelation to me. Light bulbs were going off in my head. He was managing a multi billion dollar portfolio at the time, so he knew a thing or two about the markets and information flow. Those comments were from the early 1990’s. I say they still ring true today. The average person, the average analyst, the average trader, does not know what makes a stock go up or down. And I reckoned that if they don’t know what makes a stock go up or down, they don’t know what makes a currency pair or futures contract go up or down either. This was a really good assumption on my part, if I may say so.
During this period I was dreadfully confused. I had read a whole bunch of forum posts, all the various “hot” forex eBooks that purported to tell me about “fundamental analysis” of the forex market, etc. All a bunch of hogwash. They would tell me stories about the balance of trade numbers, about the money supply, etc. I was under the throes of intimidation. As if someone with thousands of posts or someone slapping together a trading book knew what moved the forex market. They didn’t and even today still don’t really know. I had to seek out and develop more powerful and truthful trading ideas.
Therefore, I went on a journey to develop my own philosophy and principles, my own daily habits, etc, to cut through all the B.S. out there to get to the truth. Anything I have ever written or created is a result of my constant and exhaustive search for truth. I hope to inspire and educate you to go on your own search for your truth. When you know the truth, the reality, you get far closer to the trading profits you seek. Otherwise, you get pushed around like a puppet on a string.
Macro Pattern Right Here
Therefore, for those of you wanting to learn global macro, here is one big secret:
What really moves the market is not the trade balance or money supply numbers. What really moves the market are changes, especially expected changes in a central bank’s balance sheet. For example when the ECB was expected to increase their balance sheet, the EUR depreciated by a huge amount. Currently, their balance sheet is around 2.6 trillion Euros and rising as they buy tens of billions of bonds every month. It used to be around 2 trillion Euros in August 2014. The EUR/USD fell from 1.3000 down to the current 1.1200 level. A big downtrend, due primarily to the expected increase in the ECB balance sheet. If you wait until it already happens, the move may be near it’s end.
So when Stanley Druckenmiller in the book The New Market Wizards talks about how he uses “liquidity considerations” for timing the market and finding the catalyst, one of those liquidity considerations is the monetary policy changes in the balance sheet.
The lesson here is to focus in on the expectations!
And that is a “macro pattern” for you to remember: the expected changes in a central bank balance sheet via Quantitative Easing.
What I am trying to get to is:
If you are struggling with Fundamental Analysis in the forex market, then completely forget about it. Cast it aside. Go into News Trading and Global Macro Analysis. The proper name for fundamental analysis in the forex market is called Global Macro Analysis, as it is a “relative value” between the two countries. I discovered order flow trading of stops and option barriers. Then swiftly moved into creating my “Bible of Forex News Trading” strategies, which established the foundation for the move to Global Macro Trading. That was how it was done for me, and how I teach it. Looking back, it was like the perfect progression path for a trader to take.
When I moved into Global Macro Trading, I realized I had to develop my own version of “Economics.” A practical and pragmatic version. I could not rely on an economic textbook. (I haven’t opened one up in years) That’s part of academia. We are in the real world in trading – with profits and losses marked to market daily. So that required a drastically different way of viewing the markets. A way to view the markets that most people in academia and most analysts do not understand.
If you desire those strategies that allowed me to develop a philosophy, establish the rock solid foundations from which I could then could through the B.S. information of the average day, then Click Here for the Order Flow Mastery Course.
Rest assured, EVERY top discretionary global macro or long/short equity trader has developed their own kind of “economic model,” in their head.
As one biography of George Soros described him:
“He consumes all this information, digests it all, and from there he can come out with his opinion as to how this is all going to be sorted out. What the impact will be on the dollar or other currencies, the interest rate markets. He’ll look at charts, but most of the information he’s processing is verbal, not statistical.”
What the book didn’t say, that I “got” because of my honed interpretation advantage, is that Soros has a certain “macro economic” model in his mind. That he inputs the information and realize how it can impact the various markets. He has the ability to see opportunity.
You are NOT born with this. You develop this. Soros did not possess this when he was born, and did not possess it during the beginning of his career in trading. How do I know? Because he was a gold arbitrageur when he first started trading in London. And being a gold arbitrageur is a far cry from being a global macro trader. He had to make the shift. To develop as a trader and person.
If you desire profit, clarity, peace of mind and joy, then you have to develop this “Order Flow and Global Macro Economics” as well.
You must overcome the perceived initial pain and complexity of it, and get to understand the Global Macro Trading patterns. Rest assured, there ARE patterns you can follow. They are not like chart patterns you see on a chart, but there are still patterns – in the information flow and global macro that reveal trading opportunities.
EVERYONE, and I mean EVERYONE is looking for patterns according to their trading and investing philosophy. Whether you are looking for chart patterns, or price patterns, or technical indicator patterns, or value investing patterns, or global macro patterns. You just have to learn them, understand them, imprint them into your mind memory, flex those global macro mind scenario muscles. And for this, I can greatly speed up your transformation.
Stop Trying To Figure It All Out On Your Own
If you are having challenges figuring out this order flow and global macro stuff. If you are having challenges with information overload, then PLEASE stop trying to figure this all out on your own. Even if I gave you an exact list of every single book I read, article I read, video I watched, person I talked to, information I was exposed to, you are probably not going to extract the same kind of strategies and insights that I have ready for you. And you may not want to spend all the time to do all of it, because quite frankly, a decent chunk of the things I read were useless information. I have done the work for you. Let me transfer my knowledge, wisdom, and enthusiasm to you, so you can get the results you seek, far faster than ever, through the Order Flow Mastery Course. I give it to you hot and heavy because I really do want you to accomplish more in the next year than in the past decade of your life.
Revolutionize Your Trading
This mastery of the order flow and global macro economics is one of the crucial skills you need to propel yourself to the next level. Otherwise, you may just stay stuck with technical indicators and chart and price patterns, never really knowing how you can unleash the power of the information flow into your trading results.
Knowledge of the truth behind the markets past, and more importantly, future movement can:
Raise Your Win Rate
Raise Your Reward-Risk Ratio
And raise what I call your “Maximum Opportunity Set.” The reason being you start to see trades that were previously invisible to you. Like macro imbalances that are invisible to traders who are purely in the technical indicator and chart/price pattern stages. They don’t know what they don’t know. That ignorance is drastically limiting their growth as a trader and person.
P.S. There is madness in having so many different people and websites giving you all this market information, and having no idea what is important, what to focus on, how to structure them into trades. You can STOP THE MADNESS, with the Order Flow Mastery Course.
P.P.S. There are also multiple videos in The Course explaining in crystal clarity the One Big Macro Imbalance in the market right now, that can resolve itself for thousands of pips of volatility. Volatility = Profit, so long as you understand these macro imbalances.
P.P.P.S. The interpretation of dozens of trading books, over 100,000 articles, countless monetary policy speeches and reports, etc, has all been done for you. The strategies and insights are condensed into the bite-sized lessons for you.
One Response to Order Flow and Global Macro Economics