AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.
AK speaks with Tyler of Macro Ops all about how to manage trades including the right way to take profits, how macro gets involved, and the reason having a systematic strategy is so important. This is a great video for any beginner’s in the market or anyone who is just starting to trade stocks. Make sure you watch the video above for the full conversation!
We start out talking about trade management which is the hardest part about trading. In my original growth strategy, I used trailing stops to manage trades. The point was to let the winner runs. And a trail stop was a good way to prevent those winners from round tripping.
Macroeconomics comes into play for my general market view. It is not used much in the actual management of trades. Technicals are the way to go when it comes to entries and exits. The problem with macro is that it plays out on a very different time frame than you are likely trading. So according to the macro, a crash may be coming soon, but soon could be this year, the next… do you really want to exit a profitable trade that early?
The biggest benefit of going systematic with a trading strategy is that it takes out all the guesswork. There’s no need for discretion surrounding what trailing stop to use or when to take profits. The backtested system will tell you all of that. It’s also extremely time efficient not having to go through those decisions.
To learn more, make sure you watch the video above!