Overview
The target forecasting service is best used as a guide to trading. The forecasted high and low predictions should not be used as absolute figures that will be met precisely. In low to moderate volatility, however, the forecasted magnitude and trend direction have proven to be very usefull indeed. In high volatility the predicted high/low magnitude will prove to be less reliable, however, the trend direction indicator remains dependable.
The closing price forecasts two weeks forward are a reliable indication of the general trend, however, DO NOT place any weighting to the actual forecasted price (left column of chart) but rather look at the trend and to a lesser extent the angle of the predicted closing line.
Day Trading
Daily High and Low forecasts can be used for day trading by selling near the indicated high or buying near the indicated low. The accuracy is increased when in low to moderate volatility.
Position Trading
Use the two week forward closing price forecasts to determine a trend. It's recommended to identify at least three consecutive days with the same trend, then pick an entry date and use the daily high/low predictions to initiate your position.
Money Management
The predictions can also be used as a dynamic money management overlay. Daily high/low predictions can be used as stop losses, and trailing stop losses.
Currency Cross Trading
Use the closing price forecasts to determine which currency is going to be the strongest against the usd and which currency will be the weakest against the usd. Once you have this information simply initiate a cross rate trade by buying the strongest against the weakest. Example, if the forecast is for the euro/usd to rise and the forecast is for the usd/jpy to rise, you would buy the euro/jpy cross rate.
Option Trading
Long Option and Short Option traders will find the high/low and closing price forecasts very usefull also. Given the nature of option trading, absolute price targets are less important than it is when trading in the underlying instrument. Therefore, choosing a long option with a reasonable forecast can be most advantageous while short option traders can set profit targets and action a risk management strategy based on the forecasts.
Conclusion
Before digital media came along, the newspaper was the main form of communication for the financial markets. The adage of "having tommorrows' newspaper today" applies to the predictions indicated here. If you can know within a reasonable margin of error the price action of tommorrow, then it simply becomes a matter of taking the appropriate action.
PREDICTIONS ARE FORMULATED IN PART WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY TRADE OR FORECAST WILL OR IS LIKELY TO ACHIEVE PROFITS. THE CLIENT UNDERSTANDS THAT TRADING IN THE FOREIGN EXCHANGE SPOT MARKET INVOLVES SUBSTANTIAL RISK AND THAT YOU MAY LOSE YOUR ENTIRE CAPITAL. YOU SHOULD ONLY TRADE WITH FUNDS THAT YOU CAN AFFORD TO LOSE.
