Reading the market

Inflation comes in high and the currency falls. A central bank cuts rates and the index drops. Neither is a glitch. Markets price what they expect in advance, so the number that moves them is never the headline figure on its own - it is the distance between that figure and what was already assumed.

This section is about that gap: where expectations are set, how a scheduled release turns into a price change, and what volatility does to a position that was sized for a quieter week.

6 min readHow interest rates move currenciesA central bank raises rates and the currency falls. This happens constantly, it is not a malfunction, and the reason is the single most useful thing to understand about macro trading.

6 min readHow inflation moves marketsInflation fell and the market sold off. Inflation rose and shares rallied. Both happen regularly, and neither is irrational once you know what the number is being measured against.

5 min readHow to use an economic calendarIt will not tell you which way to trade. What it tells you is when the market is about to become a different market, which is more useful and much less often acted on.

6 min readFundamental vs technical analysisThe long-running argument about which one works is a category error. They answer different questions, and a trader with a view still needs an entry, a stop and a size.

6 min readWhat volatility does to your position sizeThe same one lot can risk $200 in a quiet week and $800 in a busy one. Nothing about the trade changed. The market did, and the position did not follow.