Forex trends and currency exchange prophecies are not a similar thing. A system that is based on trends involves taking a look at charts to see what the price movement has been over the past few periods. In this manner it is sometimes possible to identify a longer term trend of upward or downward movement in the price of the currency pair. We can achieve an advantage from that by backing the trend and watching our profits rise – provided of course that we get out before the inescapable reversal. It is always important to remember that no trend continues for all time.

Foreign exchange predictions involve making a judgment about which way the market will go in the future. So they don’t seem to be so dependent on charts and analysis of the recent past movements in prices. Often , they are going to be based primarily on fundamental research, which is research into the economic factors that drive the market, such as an impending IR change. The issue with trying to make predictions about the forex market is that many of us don’t have any special information on which to base our predictions. Often times it can come down to a gut hunch which is not much more than speculation or gambling. If we rely on information from fiscal sites, blogs or papers then we are putting our trading into the hands of journalists. Whether or not the info is correct, we may forget that the rest of the world has access to the same information and therefore the market may already have responded. Trends on the other hand permit us to set up our own systems and avoid trading around times when announcements are due.