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Most traders get macro wrong.

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They’re either glued to the news,
paralyzed by data, or they ignore it
entirely and get run over.

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Both are paths to failure.

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I use macro, but I don't worship it.

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It is not a crystal ball for predicting
the future. It's context.

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Think of macro as the weather.

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It tells you the general conditions and
the direction of the wind.

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Price action tells you when to raise the
sail. Macro builds your bias.

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It tells you if you should be leaning long
or short.

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It never tells you when to pull the trigger.

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You can be right on the macro trend and
still go broke if your timing is wrong.

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Price must always confirm your bias before
you risk a dollar.

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Forget about tracking every data point.

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The noise will destroy your account.

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I focus on what actually moves markets.

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The two most important forces are
liquidity and credit. Liquidity is the
fuel.

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When it's expanding, assets go up and
mistakes are forgiven.

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When liquidity is contracting, the market
punishes everything.

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Credit is the canary in the coal mine.

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The stock market can lie for a while, but
the credit market tells the truth.

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When the cost of borrowing for companies
starts rising, it means risk is being
repriced.

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It's a signal that the financial plumbing
is under stress, even if the indices
haven't noticed yet.

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This leads to a simple discipline. I never
trade the news.

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I trade the market's reaction to the news.

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The Fed chairman can say whatever he wants.

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What matters is how the market responds.

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Does bad news get bought?

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That's a sign of underlying strength.

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Does good news get sold off? That's weakness.

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The price action after the event is the
only report that matters.

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Imagine credit spreads start widening.

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The major indices are still near their highs.

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For me, that's the wind changing
direction. It’s a filter.

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It tells me to stop chasing aggressive
long trades.

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Instead, I wait and watch for signs of
weakness in price.

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When a key sector finally breaks its
support level on heavy volume, that’s a
trigger.

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The macro provided the context.

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Price provided the entry.

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Stop trying to be an economist.

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Be a trader who understands the environment.