Trading Lessons From The Macro Tourist (Kevin Muir)

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At ChatWithTraders.com, there’s a whole lot of wonderful interviews of successful traders/investors done via podcasts. It is an invaluable source of insights and a great asset to many of us actively involved in the markets!

While I’ve earlier reviewed the podcast with Dario Mofardin, this episode with Kevin Muir is another one helpful to anyone learning how to trade global macro.

For those of you who are not familiar with Kevin Muir, he runs the popular macro blog ‘The Macro Tourist‘ and has been managing his own money for the past 17 years. Take the time to listen to it.

But if you do not have the time to, here are some of my notes to the podcast:

  • Be attentive to the market environment and the players: instead of complaining about how markets have changed, spend time and effort to adapt your strategy to the environment and figure out how to make money today
  • What’s obvious is quite useless: if everyone is doing something, you are not going to make money doing the same thing, you need to think one step ahead. If you know how participants are positioned, the worse thing to do is to go along with them, especially in an environment with limited alpha
  • As an individual trader/investor, you are nimble and can take advantage of opportunities that are too small for the institutional players. Know where you fit in and take advantage of situations
  • The ability to “not be put in a box” is a key strength to an individual investor and big advantage over institutional players who are limited by their mandates or restrictions
  • It is vital not to be restricted and to always attempt to find ideas across the entire spectrum of asset classes and market segments. Muir described how he decided to look into energy-related credits during the oil crash in 2014/2015, and how he moved on from that to German bunds after yields went negative and he explored opportunities there as well. Along the way he reads up on those market segments and talks to informed people about them to better understand those segments. He loves learning new things and his interests “hops all over”. Muir added that he enjoys the learning process and the challenge of seeking varying opportunities to make money
  • Macro trading is about looking at the bigger picture and treating the financial markets as a huge jigsaw puzzle; figuring out what influences each of these pieces and how they influence one another. Macro traders are looking for inefficiencies and opportunities within a global framework, and their styles vary widely as well
  • When managing risk, Muir says he’s constantly trying to figure out ways to make his portfolio less risky. He may look for hedges when long in certain segments or think about how the positions interplay with one another
  • The traditional macro traders end up a little more cerebral, “they end up being somebody who wants to read something and think about it for a day or two before taking positions. They always go for conferences and are away from their screens. They enjoy understanding the bigger picture and seeing and figuring out the many pieces of the puzzle”

Here’s the podcast via Youtube:

You can learn a great deal – I highly recommend this podcast and other podcasts from ChatWithTraders.com.

Also, don’t forget to check out Kevin Muir’s fascinating website as well.


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