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Importance Of Forecasting Essay

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1. Introduction
1.1 Importance of Forecasting

A finance market can be described as any marketplace which people participate in the trade of finance securities, commodities and other fungible items of value.With the prices of those formed based on the supply and the demand with the assistance of a low transaction cost. Those securities include traditional stocks and bonds followed by currencies, equities, derivatives and commodities that include precious metals or agricultural products. Finance markets usually are defined by having basic regulations on trading and fees.
Every investor that is included in a finance market can be defined by some common characteristics. Some of those, for example, are the investing strategies, the necessity for the identification of a trend, the level of risk tolerance,the funds in hand and the goals that were set.
Such characteristics gave birth to a need to be more proactive and be able to predict the price of a security such as an uptrend/downtrend of a stock , that need was fulfilled with the technical analysis of the market.
One of the tenets of technical analysis is the prediction of market trends and the …show more content…

But contrary to those academics many intelligent investors have used technical indicators successfully and the combination of those to form a strategy in order to be steered through the markets. Beings said that technical indicators do have flaws and can never be a 100% “in the money”. Technical indicators indeed can predict to some point a trend, a price or a reversal. The experience from forecasting has shown that the right combination of technical indicators can increase the predictability of a strategy.At the same time, a wrong one can bring a devastating result to an investor’s

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