From macro view to trade
The framework step by step: scenarios, the narrative, new data, positioning and the entry, in that order.
The video could not be loaded.Please try again later. The lesson below is always available.
In this video
- Write 2 or 3 scenarios for the coming months, and what each would mean for the currency, stocks and gold.
- Check which scenario the market already prices, through the dollar index, stock indices, bond yields and gold.
- A number that breaks the narrative is where trends turn, so that is where you pay the most attention.
- Check positioning in the COT report and retail data, then time the entry around ranges, failed breaks and retests.
Next video · From view to executionMacro FirstPrice is an auction1:35Every tick is the result of an auction. How the order book, the spread and impatient orders move price, and why ranges show where big money is comfortable.
Key terms
- Scenario planning
- Deciding in advance what you will do in each likely outcome of an event, before the event happens.
- Narrative
- The story the market currently trades, for example “the Fed will cut soon”. Data that fits the story moves price more.
- COT report
- The Commitments of Traders report from the US CFTC. Published every Friday, it shows how large traders were positioned on the Tuesday before.
- Retest
- When price comes back to a level it just broke, to check whether the level now holds from the other side.