What use forecasts - binary option trading

At the beginning of the year, there are increasing forecasts of possible market developments. What do forecasts really bring and who are they useful for? Read the guide now.

As far as stock exchanges and trading are concerned, there are many forecasts in the media, especially at the New Year. Everyone is excited about how the markets will develop in the new year, and quite a few are afraid of missing something. Forecasts - whether from banks or other institutions - do the rest to confuse traders and investors, because it is well known that all these institutions do not always have the same views.

This is how the trader who focuses on such analyzes always stands before the question of which analysis should he believe more. As a trader, you should distance yourself from the whole forecast - especially if you have not yet committed yourself to a trading strategy, i.e. if you are still relatively new to this segment. As I said, confusion is just the result.

A trader should take a relaxed approach to the start of the year and see what the markets do. Forecasts that go beyond a year should not interest trading types that use the market technology anyway. A good example is 2015: A look at the banks' forecasts for both the oil price and the EUR / USD exchange rate last year clearly shows how wrong they were.

Traders can still find something useful Draw from forecasts?

A forecast can nevertheless prove to be useful for the trader - but only if he does not let his strategy unsettle him. Forecasts are good sources of information because they summarize relevant information / data well. Banks and institutions evaluate all this information and indicate their own trends for the markets. If you only look at the information content, but leave the assessment out, forecasts can be good sources of information. However, this requires an understanding of the markets in general.

On the other hand, you get a good overview of how large market participants assess the markets as a whole. This, too, is information that can be useful because if many institutions agree, such as when the Fed's next rate hike will happen, the likelihood of it happening increases. On the other hand, markets will react extremely if the view of the banks is disappointed.

How far should forecasts go?

If traders read forecasts, they should always keep in mind that they are looking for isolated information that fits their own strategy. An objective point of view is still appropriate. As a rule, forecasts for traders should therefore be of a short-term nature. In this sense, a good forecast is not a real forecast, but rather an inventory of the markets and the possible other scenarios that can arise from them. The market technology in particular can do this very well.

The problem is that many beginners are generally not satisfied with this because their feeling of security tells them that they need more confirmation. Although forecasts meet this; however, they cannot eliminate the risk. With the help of market technology, traders can first look at the situation and, as additional help, filter out information on the common risks from the forecasts.

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Conclusion - For traders, forecasts are only of limited use

investors, who diversify their capital across multiple assets and whose investment horizon is very broad can fall back on selected forecasts, because these sometimes fit more or less with their investment strategy. A trader can use far-reaching forecasts as a source of information, but can only use them to a limited extent for his trading decisions.

Although forecasts give a certain feeling of security, especially for beginners, they usually confuse the trader more. Decisions should be made according to a previously defined strategy - based on the inventory of the markets and less on a forecast that is several months ahead.

Meanwhile, this view is not only represented by traders, but also by many professional hedge fund investors. There are enough examples that forecasts are only really accurate in very few cases. The latest is the rate hike in the United States. Most forecasts anticipated an increase in September 2015 with an almost 100 percent probability. However, this did not occur until December.

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