Finance Related

Let’s consider a forecast example on EUR/USD, made by analysts for July, 2004 the simplest long-term forecast for July was the following. Market EUR/USD and didn’t manage to be implemented in a new ascending trend in June, 2004. The increased confidence of traders in non breakable level of support 1.1760 allows to consider still all possible falling of the market to this level only as convenient possibility for escalating of long positions.

Hedgers while remain in long positions with floating stops and a long-term objective 1.2715 for summer of 2004 Breakdown from below upwards level 1.2200, and then and 1.2400/50 considerably will fill up army of bulls on euro that is valid in the summer will make a reality object in view achievement (level 1.2715).

The euro market develops in a kind of flat, and, hence, for it high volatility waits. It is impossible to exclude that the week bar can be closed below level 1.1700. In this case it will be necessary to review all long-term forecast in a root. In this long-term forecast level of support of the market in 1.1760 is taken from the schedule of rate EUR/USD. However there is no that proof that it is that price level below which the euro exchange rate won’t fall, and there won’t be any analyst of such proofs.

Though that who did the forecast, it is convenient to use this level of support as the ultimate truth. If in the market also there were hedgers on EUR/USD in July they have closed long positions. Breakdown from below upwards levels 1.2200 and 1.2450 in July has occurred. However the army of bulls on euro as analysts predicted, at all hasn’t replenished, more likely, on the contrary. Not predicted events have developed the market in the return from the forecast a direction. The long-term objective 1.2715, most likely, and remains desirable expectation of analysts.

Alternative to expectations:

It is known that trading is the unique function of the market, capable to reveal demand for currency. Any trading is based on growth expectations (or falling) course value of currency. Expectation of growth (or falling) – is the primitive forecast constructed on irrational psychology of people and their intuition. In the primitive forecast there is no even a least risk analysis.

Scales and social value of trade in market increase, when its participants become not only professionals, but also people who hope to earn on rate growth, putting in it their savings or the money received on credit. The psychology of such people is based not on the sober analysis, and on intuition. Risks of the speculative strategy constructed on intuition, read off scale for all possible limits.

Experience shows that professionals leave speculative operations more successfully, and weights of small investors become victims of expectations. Trading systems which are able to count not only a profit-factor, but also risks of the investor can be alternative to expectations and forecasts of the prices on financial market only. Stability of such trading system should be estimated on the parameter which is not dependent on time. Such trading system is developed by us and in detail described in works. This system is pledged in the form of algorithm in a basis of the trading robot. Such algorithm works financially reasonably. The financial expediency is the criterion distinguishing possible expectations on financial market and automatic trade by means of robots.

People who took the decision to participate in forex trading should start from learning the basics of currency exchange market to make sure you do not have problems with this industry.

There is another option – you can hire experienced traders to managed your trading account – read more about forex investment here. Also make sure to look for the knowledge in a good forex book.

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