Forecasting is not crystal ball reading but the result of variously sophisticated methods. Look closer at how we do things.
Forecasting is the basis of investments
Be it trading on the energy market, investments in gold or simply managing a forex account is what they are interested in, investors will find that the right forecasts for the developments on the financial market might save or make them considerable amounts of money. Some people imagine forecasts to be accurate predictions for the future that will always become 100% true. Of course, this is not and will never be the case. To forecast does not mean to determine the future, but rather to look for factors that will have a considerable effect on the future developments in exchange rates.
There are numerous such factors and their importance changes over time. Some factors, for instance natural disasters or traffic accidents, cannot be predicted at all. Others, such as a change in the country's rating, a shift in investor sentiment or an outbreak of a financial crisis at the other end of the world can be predicted to some extent. That is why it is unfeasible to produce forecasts, which would be 100% accurate. However, by utilizing modern statistic methods and macroeconomic models, we can approach precision nearing the 100%.
From the perspective of investing on the financial markets, it is of the highest importance that Next Finance features in its outlooks the expected exchange rates lows and highs, as well as market indices for a particular period (e.g. a day or a week). Thus, investors can set their own limits for their investments, as when to sell or buy for the best available prices. Setting the expected trading ranges helps investors minimize financial risks. Furthermore, clients can take advantage of consultations, which will enable them to time the trading activities on securities markets, commodity markets, energy markets or forex markets to maximum effect.
.Next Finance forms its financial markets analyses on three basic types of analyses: fundamental, technical and psychological analyses. Fundamental analysis takes macroeconomic statistics for its basis. One of the most significant ones is the gross domestic product (GDP), or its proximity to potential product; the consumer inflation (CPI) and foreign trade. Producer prices within industry (PPI), unemployment, retail sales, consumer sentiment, state budget deficit and industrial or construction production are of significant, if secondary, importance to the financial markets. The right forecast for macroeconomic indicators is key to revealing long-term trends on the financial markets. Nevertheless, because macroeconomic data are published only several times a month and exchange rates move several times a minute, it is essential to support the fundamental analysis. That is where the technical analysis and the psychological analysis come into play.
Technical analysis is based on historical data (exchange rate development in particular), which serve as the basis for forecasting the future. In the past, technical analysis was considered a mere investigation of corresponding signs between the past and the future. Graphic formations that were expected to estimate future developments in the exchange rate were sought out. However, those days are long gone. The modern technical analysis is still based on historical data; however, these are processed using more or less sophisticated statistical programmes, with the results consequently interpreted graphically. Modern technical analysis uses complex computers, which are able not only to estimate the exchange rate, but also to time the moment of sale correctly, when trading with securities, commodities and currencies.
We often complement the fundamental and the technical analyses with psychological analysis, which investigates investor sentiment. It is especially useful at times when financial markets act irrationally. From time to time, investors on financial markets fall victim to excessive optimism or pessimism, which clouds their vision and obstructs their hearing. They will overestimate the positive news and underestimate the negative ones. Thus, exchange rates can climb to their new all-time highs without the growth being justified. Then one day, investors wake up and the exchange rates return to their fundamentally justified levels. At moments, when herd behaviour dominates financial markets, psychological analysis comes in useful; it tries to understand human thinking and sentiment, which lead to a timely discovery of market highs and lows. Psychological analysis is most useful when investing in stocks, trading with commodities and trading on the forex markets.
Our key products
Simple, clear and comprehensible even to non-professionals, these are analyses and outlooks delivered daily to your desk. A summary of the most important developments: exchange rates, macroeconomics, interest rates and stocks
We will be happy to arrange a lectures or training courses on economic themes for your employees or business partners: energy, property, currencies, etc. Interesting format, comprehensible to anyone.