Macro-to-Micro, Options and Women in Trading – Coming up in our podcast this time:
- How to utilize a macro-to-micro trading approach
- Options trading – what are the benefits?
- Women in trading: Why the gender imbalance?
This time on Trading Global Markets Decoded, our host Martin Essex is joined by Samantha LaDuc,of LaDuc Trading and LaDuc Capital. We ask: How do you refine a macro-to-micro approach? What’s the benefit of options trading? And why are women so underrepresented in this sector? You can listen to this podcast with Samantha LaDuc by clicking on the link above or one of the alternative platforms listed below.
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Macro-to-micro
Samantha is a keen advocate of the macro-to-micro approach– understanding the macroeconomics of a market then drilling down into the case for bullish or bearish. “When I started as a trader I purely focused on market-moving news that would create volatility in the instrument of choice, but I was also technically analyzing based on patterns.
“Pulling together the macroeconomics and the intermarket, sentiment, and wider fundamental aspects, allows me to make these market timing calls.”
She looks for compression, expecting volatility that in turn drives momentum, that then drives the direction. “I’m not interested in a trade that’s chopping around in a particular timeframe, whether intraday or weekly. I’m looking for directional patterns and it’s typically volatility that triggers that direction.”
Recent markets, however, have been slow. “We’ve been in distribution top pattern for a year and a half and despite the Fed’s supportive efforts we can’t break out. It’s been a case of hanging out, rather than breaking out.
Saudi Oil Attacks: Why Supply Disruption isn’t the Issue
Talk moves to the Saudi oil attacks, where Samantha underlines that the problem is not supply disruption, but demand disruption.
“A risk premium is now built into the price of crude oil, but supply disruptions are typically repaired and that price movement is reversed.
“Energy needs may grow, but we don’t have a lot of investment going into the oil market. Trump tweets keep oil prices down, and policies where the US gives Iran waivers, depresses price. So there’s no incentive to invest in that sector until we have a macro reason to do it.”
How to balance emotions?
Onto managing the emotions of trading. How does Samantha keep cool under pressure? “Being in my trading room is a natural state for me,” she says. “Analyzing and setting trades up, I’m compartmentalized and emotions aren’t in my mindset.
“Being least anxious when in the trading room brings a comfort and familiarity.”
The other part is how not to let the emotions that occur outside of trading affect that mindset. “That’s much harder to do, but it’s my job. Whether it’s a good trade, or not a good trade, I don’t get emotional about it. You’re only as good as your last trade, so suck it up and move on!”
Why use options?
Talk turns to options, or financial derivatives based on the value of the underlying asset, and giving an investor the right to buy or sell an asset at any time, as long as the contract is in effect. “Options provide a way to trade multiple positions with less capital and offers a strong potential return on investment. If you don’t use options, and you’re shorting a currency for example, your loss could be infinite,” Samantha says.
In terms of the options market, oil and natural gas plays are all going up, and Samantha favors assets that move together like gold, silver and mining stocks. “You can increase the positioning in particular sectors when that rotation turns into a trend.”
If taking a risk-off approach using this method, for example, you would spread your money between German Bunds, Gold, Swiss Franc, Japanese Yen. “The macro indicates what is going to be of interest, then it typically moves the whole sector and that’s a much better probability trade.”
Why are women underrepped in trading?
Martin asks: Why are women so under-represented in trading? “Well, privilege is invisible to those who have it, and men have created a boys’ club to an extent,” Samantha says. She adds that, while she has been well received by men for her ‘risk aware’ approach, she came into the business to be a voice for women. “There were so few women in financial advice, so few women who professionally trade options and who run trader education services. I wanted to encourage, attract and inspire women in finance and trading.
“It’s encouraging for women to find me, because they don’t see themselves represented, and you can’t be what you don’t see.”
Check out Samantha’s platforms
Follow Samantha on Twitter using the handle @LaDucTrading & @SamanthaLaDuc, and also her site at LaDuc Trading.
