What is a macrotrader ? Macrotraders are investors who look at mutliple asset classes, using multiple strategies, with a top down macro economic approach. While that may sound like a mouthful it is actually not nearly as complicated as it sounds. In this article we will break each of these points down to better explain what a macrotrader is and does.

Macrotraders are heavily involved in multiple asset classes. The standard macrotrader will trade stocks, bonds, commodities, and currencies the world over as well as any derivative products that cover each class. The larger funds also typically invest in real estate and sometimes even in private equity and venture capital. Basically if there is money to be made they are involved. By trading across asset classes the macrotrader is better able to profit from his different macro trading themes. For instance if you are bullish on gold what is a better trade, the commodity or the mining stocks? It really depends as in some environments the commidity is a great trade and in others the stocks are a better trade. What about interest rates? if you think that rates will go down do you buy bank stocks or do you buy some zero coupon bonds? As you can see there are many reasons to trade all the major asset classes as you can better take advantage of different market environments.

What strategy do you trade with? Ideally you are trading multiple strategies. For instance you may have part of the account in a CTA long term trend following system, some in long term big picture type trades, and then the rest in a medium term discretionary program. None of these is the end all and be all of investing but they can all add significantly to your returns. Another great advantage is that you get time diversification and your return stream will be a lot smoother.

Finally we have the big macro economic top down picture. By having a framework from which to trade you will have a lot more success in trying to figure out how the different markets interact with each other and what huge dislocations are on the horizon. What is the bond market saying about stocks? What is stock volatility telling you about currencies? Questions like this can help you be a far better macrotrader and profit more consistently and in a greater magnitude then you would be able to otherwise.

By combining all three of these concepts you will be better positioned to profit from the financial markets. Macrotraders are some of the most successful traders out there. Go ahead and copy and learn their approach and who knows, you could be the next George Soros.