Every major market event has the same problem: most traders express it in one instrument. Iran escalates. They buy crude futures. The Fed pivots. They buy tech stocks. Each of these is correct. Each of these is also leaving 60 to 70% of the available trade on the table.
A macro thesis, properly expressed, should touch every asset class it affects. That is not diversification. That is precision.
The conviction decomposition framework
Start with the thesis in plain language. One sentence. Specific. Not "energy prices will rise." But: "Strait of Hormuz disruption reduces global oil supply by 20% for 30 to 60 days."
Now decompose it into first, second, and third-order effects.
First-order effects are direct and immediate: the asset classes that move mechanically when the thesis is confirmed. For a Hormuz disruption: crude oil (+15 to 25%), tanker stocks (+20 to 35%), gold (+3 to 6%).
Second-order effects are derived: USD/JPY (+1.5 to 2.5%), European airline stocks (8 to 12%), emerging market bonds (3 to 5%).
Third-order effects are reflexive: Polymarket contracts on US military response (from 15 cents to potentially 60 cents), VIX (+15 to 30%).
Sizing across asset classes
The central error in multi-asset sizing is treating each leg as an independent bet. It is not. Each leg is an expression of the same thesis. The question is not "how much to allocate to crude vs tankers?" It is "which instrument gives the best risk-adjusted exposure to this conviction?"
Step 1: Define your total conviction capital. The maximum you are willing to lose if the thesis is completely wrong. On a $500,000 portfolio, a high-conviction trade might have $25,000 of conviction capital (5%).
Step 2: Rank instruments by conviction purity. Crude futures have the highest direct exposure. Tanker stocks have high exposure with equity volatility added. Polymarket has binary exposure with no market-beta noise.
Step 3: Allocate by purity, not by asset class. Something like: crude 40%, tankers 25%, gold 20%, Polymarket 10%, defense 5%.
Step 4: Set asymmetric exits per leg. Each instrument has different volatility characteristics. A 10% crude move is ordinary in a supply shock. A 10% gold move is extraordinary.
Monitor by thesis integrity, not P&L
For each leg, define two things before entry. A confirmation signal: what would confirm the thesis is playing out? And an invalidation signal: what would tell you the thesis is wrong regardless of current P&L?
When the invalidation signal fires, exit all legs simultaneously. A thesis is either intact or it is not. Most traders close losers and hold winners. The invalidation framework forces the exit decision to be thesis-based rather than P&L-based.
Four recurring macro templates
The implementation reality
The framework above is not conceptually difficult. Any experienced trader can draw the cross-asset map for a macro event in 15 minutes. The implementation is where it breaks down. Executing 4 to 6 instruments across 3 to 4 platforms, sized correctly, with monitoring criteria set for each leg, takes time that most macro events do not give you.
The traders who execute this consistently have reduced the execution to a single workflow. The analysis is separate from the execution. By the time the thesis is formed, the mechanics of placing the trade are simple enough that they do not introduce delay. That is the actual bottleneck.