PostHeaderIcon The Problem With Predicting The Markets

Traders tend to try and predict the market in order to determine what their next move will be. But always relying on such predictions may not be as dependable. There is always a problem with regards to trying to predict the market. Here are some of the reasons why.

The future is bound to be uncertain.

No matter how good a trader may be in analyzing situations, future events still usually move in an unpredictable manner. One can only predict using information available now. Most predictions are usually based on a current trend which no one actually knows how long it would last. A sudden change can easily break any prediction into pieces.

Prices rarely move in a straight line.

It would be quite easy to predict the market if the prices always move on a straight line. But the fact of the matter is that market prices move in whatever direction it chooses to go based on where the situation or event takes it. Those trying to predict a certain security based on a price running on a straight path will usually lose instead of profiting. It would be better to trade using averages and trading according to price movements.

There is no way to take every factor into consideration.

An accurate prediction would usually depend on taking all the factors that may be involved in a certain event. In this way, predictions may have a more rational basis up to a certain level. But then, it is impossible to take every factor there is and make a more accurate prediction of the market. The odds that the various factors won’t go according to prediction are very high. Correct market prediction is based on pure luck, at best and can’t always be replicated.


Comments are closed.