What advantages do we have in a market which is influenced by macroeconomic data and not microeconomics data?

First advantage – it is much easier to follow and trade, due to the availability and minimal amount of data.

For stocks, for example, there are many factors which must be followed.

Imagine that you own 4-5 stocks in the NYSE. Lets assume that you are a serious investor, not a gambler.

You have to know who the shareholders are in every company you invest in, what the multiplier is, what the balance sheets look like, the gains and losses reports, internal information, such as, for example, resignation of an executive, a large future contract, and so on and so forth. One must know so much information that following them on a daily basis would require many hours each day.

In the forex market there are five to six significant data in a month. The firm which you trade will provide you with these data matrix in real time, and you, with the knowledge that you will gain, will trade accordingly.

Do you understand the significance? 5-6 pieces of significant information in a month, that’s all. You won’t have to live in constant chase after changes in companies in which you invest.

Second Advantage – the important information reaches everyone at the same time.

Let’s assume that i am the marketing manager of a large pharmaceutical company. And i am on a flight returning from China, and in my hands is a closed contract with the government of China, a contract which is expected to increase the profitability of the company by 100 billion USD a year.

Who knows about the deal? Myself, the CEO, his wife and her brother. And they don’t do anything with that knowledge, right?

Until it is reported in the news that a huge deal took place with China, there are people who already know, who have use of it, and the price of the stock already reflects the news. You will be in the second level of decision makers.

Haven’t you ever met someone who told you that he/she bought a specific stock based on insider information and the next day it rose by 20%? Yes, yes... it happens...

In the global foreign exchange market, when the American federal reserve governor publish a decision to increase the interest rate, the whole world knows it in the same exact second and can respond immediately – to buy or sell the USD. There is nobody who has insider information beforehand and who make use of it in an unfair manner.

Whats next?
Marketing research and analysis
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