Although the term is synonymous with George Soros, Julian Robertson, Bruce Kovner, and Michael Steinhardt global macro trading is still an unknown to many investors. Its sad too since it has been the most successful trading style in history.

Most investors are suckered into different investment styles due primarily to marketing and not so much due to proven performance. One of the best books in the world is How to Lie With Statistics by Huff as it shows you how to look at numbers and see how easy it is to make up the best numbers for marketing purposes.

So what is a macro trader aside form being the best investment strategy out there? Macro traders trade stocks, bonds, commodities, currencies, and anything else that they can find. They are the quintessential capitalists that attempt to profit anytime that they can find an excellent risk to reward opportunity. Where at typical investor is stuck in stocks during a bear market, the macro trader might be out going long bonds in anticipation of interest rate cuts or just shorting stocks. When emerging markets are taking off the macro trader might be going long the index, long the currency, and long some commodities and thereby profiting more then the regular long only investor.

Macro traders have such a great track record due to the fact that they can go everywhere, do anything, and trade it all in order to find the best risk to reward opportunities. Is your bond fund managing their currency risk? If not then maybe you will want to ask if they even know how to effectively hedge. If it is a macro manager then you will find that they are trading the currency along with it and likely getting a lot of carry from the trade. By the way when everything goes down guess who makes money? Yep the macro trader.