This picture is of vital importance.
It's something that you simply have to try to recognise when trading, whether you're multi asset, trading only crypto, FX, equities - it simply doesn't matter, since sentiment is indiscriminate and uncaring as to your asset class.
In each section, we've got what is occurring at each stage.
1) Risk off.
2) The start of the...
'Where's your head at?'
If you've never watched Love Island - I have a girlfriend so I am practically forced to - this is a question that is asked by the contestants to their prospective partners to figure out the basic human relationship formation, as to whether someone actually likes them or not.
I like to use visual imagery to see whether it lines up with my...
In short, we don't think so.
In the chart above, you're seeing the 10y30y spread and the 10y yield.
The 10s30s is a barometer of the inflation risk premium.
And quite frankly, the market isn't buying that inflation will be sustained.
Yes, the 10y yield is indicating perhaps to many that there is some kind of inflation risk, but from the Macrodesiac view, all...
I think reflection is good.
I got this idea from my colleague at TradingView, Scheplick .
Give him a follow.
He's been doing a list like this for a few years now, which you can read here.
Let's get started then...
1) Be prepared to throw every belief you have out of the window.
2) Timeline matters. Being too early is being wrong.
3) It's probably better to...
There's a tonne of myths out there to do with markets and trading, some which are totally bullshit and others which are half truths, embellished to their fullest.
We're going to take a look at some of these and see what the real story is behind these tales.
The myth about free trading apps
You've probably seen adverts recently for free trading apps or...
I receive bank research each day...
I'll drop some of their comments here/
Citi: EUR trades marginally below overnight highs around 1.1730 at the time of writing (-0.1% in Asia). As a reminder, CitiFX Strategy still believes the EURUSD correction has room to go and it is not yet time to fade it. Several factors, including a slightly less dovish Fed,...
So we are probably all aware of the stock market sell off that is currently occurring.
It's likely due to a combination of things...
The reflation trade reaching a short term top...
The holiday weekend profit taking...
And a bit of a rotation out of tech to value.
Stocks have been hit pretty hard.
And when stocks are hit hard...
The financial media have a...
If you’re new to this side of the markets, it may seem overwhelming at first.
"Macroeconomics" sounds way more complicated than it actually is.
Getting involved & learning by osmosis really is the best way.
Knowledge & understanding quickly build up.
We are going to focus primarily on news flow and sentiment.
It’s a broad topic, so let’s break...
As a macro trader, I really need to look at a wide variety of indicators and market data, whether economic or price based.
However, I HATE many of the other charts that are out there.
So I'd like to introduce you to a little known trick.
Have you heard of Quandl?
They provide alternate data sets for loads of different types of things, whether it's...
We're simply looking at the difference between two stimulus regimes.
With the BoE indicating that there would be a cap to stimulus, whilst the Fed earlier last week pretty much took a 'whatever it takes' stance, the longer term differential in narrative was created.
Whether that sustains is a different story, since context can change rapidly, but intraday, those...
I'd like to talk about the effect of lower interest rates on something called 'net interest margin'...
In other words, how banks make money.
The chart attached shows US commercial banks' net interest margin (blue) versus the target Fed Funds range (white).
Net interest margin (NIM) is a measure of the difference between the interest income generated by...
I'm a big fan of AUDJPY due to its risk sensitivity.
In a risk on environment, it turns bid, and in a risk off environment, it goes offered.
Well AUD is a high beta currency and is rarely offered in a carry trade (until more recently against some exotics).
Whilst Yen is almost always offered in the carry trade.
This is due to the negative rates that the...
Something to note on EURCHF...
The Swiss National Bank want a weaker Swiss Franc.
To weaken the Franc,they conduct many different market operations.
One of course is to buy US equities and the other is to increase their holdings of foreign currencies.
Just last week, the Swiss National Bank increased their 'sigh deposits' of the dollar and euro by...
Sometimes there are trades which just stand out to you.
EURGBP here is one of them.
See, there's a big issue currently in Europe.
With fiscal stimulus seemingly being coordinated simultaneously with most of the major countries excluding the Eurozone partaking, it seems that this is rather an obvious trade we have here.
Now, fiscal stimulus tends to...
The chart above provides the perfect reasoning as to why purely looking at price action around market sensitive data points can be your undoing.
On Friday we had the NFP number - this was a big beat.
However, GBPUSD didn't really move to the downside all that much.
This likely led to many getting long, lulled into a false sense of security going into the...
I am not a virologist, but I understand sentiment and a large part of my trading is looking at where people are overly fearful and where they are too complacent (at a basic level)...
It's why I use Twitter so much.
It's a great sentiment resource.
If you were to do a search for Corona Virus on Twitter, 90% of people are bricking it.
But step away from that and...
I've been an avid fan of selling rallies on AUDJPY for the last year or so.
Over the last few months, we saw the Japanese 10 year yield push higher from its lows (the Japanese 10 year bond was being sold).
This was probably due to a slight recovery in global data, leading to a more risk on environment...
And we eventually saw the Japanese 10 year...