Market ForcesMarket trend is what makes or breaks traders. Being able to determine the trend that a certain market is currently undergoing or is leading to in the near future would determine if a trader profits or suffers losses. Being able to predict the direction of the trend may help traders come up with better trade decisions that would further improve their chances of trade profits.

The ability to predict market trends depend on knowing what factors may influence or guide its direction. There are certain forces that may help shape markets and determine what direction a certain trend may be heading. Changes in these major factors would give traders insight on how a current trend acts or how future trends may occur.

Government Action

The actions made by the government in a certain country may greatly influence the way the markets inside it work. The different policies that the government may institute can directly affect how the market trends may develop. Government action relatively also shapes the trends that occur in the markets.

Monetary policies have a significant effect on the market since decreasing or increasing the interest rates in the country may either slow down or speed up growth and development not only for the market but for the country in general. The same way may happen with how the government addresses certain issues such as unemployment and spending in the country. How the government acts upon trying to manage investments going in and out of the country may help influence market trends at any time.

Supply And Demand

A basic rule in economics, the law of supply and demand also works with influencing market trends. In any market, the difference between supply and demand necessitates either an increase or decrease in market prices. Be it in commodities, currency or other investments, markets that are operating usually develop trends with changes on supply and demand.

Market Speculation

Even predictions have a way of influencing market trends. Market speculation plays a big role in how the market may move at certain periods of time. Speculations and expectations especially made by market authorities as well as by the lawmakers and the consumers themselves may have a significant impact on the market trends that develop.

International Business

As the country and its government may have an influence on how market trends go by way of its actions, how it also develops business relationships with other countries may further impact the direction, period and degree of the market trends. International business transactions help keep investments as well as currencies flowing in and out of the country. This may also help gauge the economic health of the country as well as influence the market trends that traders try to determine at one point or another.