Short Term Trading and the Long Term Perspective
I’m going to refer you to a blog I’ve been following for some time. It’s certainly one of the most intensive macro-economic blogs on the internet and even though it seems to have a built in bias to the downside of the current economic situation, the depth and broadness of its analysis is excellent.
Even though I trade with a quantified outlook on short-term market behavior, I like to keep the bigger picture in mind. The reason I do this is it helps guide me to better understand the risk that may be out there at any given time, which then allows me to better decide which trading vehicles to use when I have signals.
For example, a buy signal on the market offers an abundance of opportunities. Do you trade the futures, do you trade the SPY, do you trade the 2x SSO, do you trade a 3x ETF, do you use options (if yes, long calls ,short puts, sell ratio spreads, sell credit spreads, etc?), the list goes on and on. By having a framework of what the macro outlook is, you can then better guide what your trading vehicle should be, combined with the level of risk you are most comfortable with, with the goal of maximizing your long term returns.
The blog “Zero Hedge” can be found here and I hope you enjoy following their work.
Special Note: We will be launching our 6th TradingMarkets Swing Trading College in May. The Swing Trading College is an all encompassing 14 week trading course (now with special focus on ETFs) and it’s always very popular. If you’d like to attend my presentation, I’ll be doing it online on Tuesday at 4:30 pm ET. Call 1 213-955-5858 ext 1 if you would like to attend the presentation or if you would like to receive a copy of the recording.
Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.