Avoid Making Predictions in the Market

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Thread: Avoid Making Predictions in the Market

  1. #1
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    Default Avoid Making Predictions in the Market

    Avoid Making Predictions in the Market
    Avoid Making Predictions in the Market

    Most people make a big deal out of market prediction. They think they need to be right 70% or better in order to "pass" the exam that the market gives them. They also believe that they might get an "A" if they could be right 95% of the time. The need to predict the market steps from this desire to be right. People believe that they cannot be right unless they can predict what the market is doing.
    Among our best clients, I have traders who continually make 50% or more each year with very few losing months. Surely, they must be able to predict the market very well to have that kind of track record. Well, I recently sent out a request for predictions and here is what I got back from some of the better traders.
    Trader A; "I don't predict the market, and I think this is a dangerous exercise."
    Trader B: "Öthese are just scenarios, the market is going to do what the market is going to do."
    Ironically, I got these comments from them despite the fact that I was not interested in any of their specific opinions, just the consensus opinion.
    So how do they make money if they have no opinions about what they market is going to do? Well, there are five critical ingredients involved:

    • They follow the signals generated by the system.
    • They get out when the market proves them wrong.
    • They allow their profits to run as much as possibleómeaning they have a high positive expectancy system.
    • They have enough opportunity so that there is a great chance of realizing the positive expectancy any given month and little chance of having a losing month.
    • They understand position sizing well enough so that they will continue to be in the game if they are wrong and make big money when they are right.

    Most traders, including most professionals, do not understand these four points. As a result, they are very much into prediction. The average Wall Street Analyst usually makes a large six-figure income analyzing companies. Yet very few of these individuals, in my opinion, could make money trading the companies they analyze. Nevertheless, people believe that if analysts tell you the fundamentals of the marketplace, someone can use that information to make money.
    Others have decided that fundamental analysis doesn't work. Instead, they have chosen to draw lines on the computer or in their chart book to analyze the market technically. These people believe that if you draw enough lines, and interpret enough patterns, you can predict the market. Again, it doesn't work. Instead, cutting losses short, really riding profits hard and managing your risk so that you continue to survive is what really makes you money. When you finally understand this at a gut level, you will know one of the key secrets to trading success. In the meantime, we will continue to make predictions in our column, so that you will begin to understand that they are entertaining, but nothing more!

  2. #2
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    Many people predict now trade will take this side . Others follow them .But mostly they are fail to predict right. They should not make prediction they should just follow trend. We can not say any thing sure abut market next movement. Most important thing is finding current trend to open positions accordingly. With this traders can good results by using money management.

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    if you want a milinore by forex forex it possible but you not tooo gready

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    We should try predict on the base of analysis . In forex we all work on possibilities that come true or not. So predictions are also not right all the times. After good experience we can predict well for trades.

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    I don’t think there is anything wrong with market prediction but you can’t blindly follow it. I believe it should be followed sensibly and should be ignored if we are uncertain. I always read predictions and all that, but eventually I follow my own way. I keep tight money management which is easier with OctaFX broker having 50% bonus on deposit; it’s fabulous and helps me working out so nicely with money management and keeps me in complete control of everything.

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    Quote Originally Posted by Master Forex IB View Post
    We should try predict on the base of analysis . In forex we all work on possibilities that come true or not. So predictions are also not right all the times. After good experience we can predict well for trades.
    Forex is a purely professional business based on calculations and analysis. More we can take help by reading news and concluding their impacts on the market.

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    Quote Originally Posted by Annette Ashley View Post
    I donít think there is anything wrong with market prediction but you canít blindly follow it. I believe it should be followed sensibly and should be ignored if we are uncertain. I always read predictions and all that, but eventually I follow my own way. I keep tight money management which is easier with OctaFX broker having 50% bonus on deposit; itís fabulous and helps me working out so nicely with money management and keeps me in complete control of everything.
    Predictions are often references, they may true or may not be true, but the minimum is that they are analyzed based on real metrics.

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    I actually disagree with you on this topic. Trading without analyzing or prediction is worthless as if you win, you're lucky this time, but actually winning doesn't guarantee any further success in the future.

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    in ro ham eslah kon:
    Forex trading is risky. Trading psychology is also important in trading. Only enter if you have a profitable trend. In Forex, less is more, and people need to understand this concept over time. You can also use Forex4you free demo account to get a feel for the actual trading concept. Demo account is the best place to learn trading and test trading strategy.

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