"East Asia Economy ONLINE column now available" How can I improve my forecasts?

Good morning, this is Matsushita.

When I convey investment, I always say

“Investing is not about predictions.”

However, many individual investors

still focus on forecasting, so

today I will write about steps on how to improve your predictions.

Thinking back, since I first bought stocks in 2001,

for about two years I was also poor at predicting.

More precisely, I was completely wrong most of the time.

Now, I can forecast accurately.

That’s why I have been able to teach investing at the front line for over ten years.

First, in order to predict the direction of prices,

you need to know and learn the reasons why prices go up or down.

If you don’t understand the reasons prices move, you cannot forecast.

The reasons prices move are divided into fundamentals,

technical analysis, and investor psychology.

From these angles, you learn the reasons prices move.

Next, you learn price analysis.

You seem to understand the current price movements in front of you,

but in reality you do not understand them.

To put it bluntly,

whether prices are going up or down,

you don’t know.

This is because your analysis is ambiguous and careless.

If you learn a method of analysis,

you will know whether prices are rising or falling.

Price movement depends on the observer,

and on how it is evaluated.

However, many people think that at a given moment

whether prices are rising or falling is the same for everyone.

That is not true.

Price movement varies depending on the evaluator.

You need to learn appropriate analysis to forecast for yourself.

With this, you will be able to forecast.

1. Learn the reasons why prices move

2. Learn how to analyze prices

3. Forecast price movements

Regarding the influence of fundamentals written above,

in stock investments and commodity futures trading,

it is effective to learn and analyze this.

However, in FX,

it is too complex,

and I think it is impossible for individual investors.

(My personal view)

FX individual investors should

specialize in technically analyzing,

learn the reasons behind price movements and analysis,

to master the market.

There is a proper order and approach for predicting price movements and directions.

Once you become able to forecast,

and start getting it right, it truly becomes enjoyable.

Of course, your capital will increase as well.

Please use this as a reference, learn, and improve.

And please forecast perfectly!