Trends in the market make it possible for traders to make profit. It is the changes as well as the prevailing trends in a certain market that traders take advantage of in order to make money, be it on the short term or the long term. That is why it is important for traders to know the market trends as well as the factors that may influence them. Here are some of the common and important ones.

Supply and Demand Factor

Supply and demand is actually a basic but all-important factor in shaping market trends. How supply and demand affect certain products, currencies and investment also holds true for its influence in shaping market trends. The balance between supply and demand and the changes that may happen along the way may affect price direction and therefore shape prevailing market trends.

Government Factor

In any market, the government always plays a significant role especially in influencing prevailing trends. It is the government that creates fiscal and monetary policies that markets and businesses follow within its territory. The actions of the government can either slow down or fast track progress that affects the general marketplace. These important actions also influence market trends.

Speculation And Expectation Factors

Speculation and expectation both play important roles in the market as well as setting up market trends. Both provide traders as well as the general public with the insight of how a certain marketplace or country in general may fare out in the future. A general consensus of how consumers, politicians, investors and traders a certain economy may become in the future can have a significant impact on how people may act today. This may also exert some influence of future trend direction and price changes.