Defect Analysis
I believe that at any level, an analysis must unblemished. No matter who the person is and how long, how much funds managed or how skilled he is in financial market analysis must be unblemished. There are several points of view to explain why any analysis we do have a disability.
Fundamental variable composition performed by an analyst does not guarantee he has selected appropriate to explain the phenomenon events of currency price movements.
Let's say you've collected all the data to complete, but complete itself into a question which continues until the completeness limit? Is absolute standards or indeed our own standards?
Generally, the latter which has been chosen, whether it is caused by the element of time to make a decision as soon as possible or the orientation of the money form our own standards. But if you think about it actually we also still have doubts with the absolute standard. But in reality, the absolute standard collapsed dialectic entirely to the existing laws, where there is no one absolute truth. As a result, the standard of our own self-destruct human legal uncertainty. It can be concluded that whether or not complete information, it will not guarantee a successful outcome of a person. We can work with complete data and instead we can also work with incomplete data.
And this can be proved by the events around us where there are colourable fund performance with technical no know what the central bank or not knowing the ins and outs of fundamental though.
But here I was interested to discuss the terms of the realities of the financial markets I would use for this philosophy. following his presentation.
Absolute Vs Self
Absolute or we refer to as the absolute standard is price driven by standards other than our own making. Anything that is driven by the desire to obtain money is not an absolute standard for absolute prices should move with the fundamentals were not for human intervention in the Financial sector.
So to say, the price of the currency is supposed to represent the business sector, which is becoming fundamental but in fact these conditions can not be achieved because despite however, the financial sector has a player that contains a human in it. Price is driven by humans, while humans have an interest to make money. Can be concluded that the absolute standard plays a minor role or even a ballpark we negate the absolute condition.
While standard self or in other words is the standard of our own making, is important to know the essence of why currency prices volatile. Standard self is a standard decision we make by considering a variety of ways, although the most common is the desire to make a profit. No one is more dominant than the desire for money and this desire to encourage market participants to activate the mechanism. Expectations and concerns so Price volatile although at the time the information in the field is limited.
Combined Absolute And Self
Then we try to find ways of these conditions by combining two factors: the absolute standard and self that leads us to the conclusion that the price of the currency is actually formed from the fundamental bacground as absolute standards then no human intervention as a standard self. So at this point we know what it's called fundamental analysis and sentiment.
Actually that is the problem, since the two are completely have a different existence. Therefore, the existence of this being a very dominating sentiment in the financial markets and will be even stronger dominance by the existence of a free market in which money at will fly wherever she wants.
Many thought before if I was a fundamentalist. That's right because I consider fundamental factors but it is less precise because I always take pains to formulate a sentiment that drive the value of the currency. I also believe that the hedge fund- such as first state indoequity who manage funds (year 2009) of about $ 134 billion-is also doing the same thing with me that the price is not reasonable due exploit the sentiments of the people who have a short-term orientation in its management.
But of course, I do not know how much of the funds that it manages in risk appetite. I feel the need to express this because philosophy hedge funds trading in line with my own guidelines. And that certainly I am not a fundamentalist, and I'm not Analyze fundamental although the outside looks like it looks.
Philosophy
Here, I do not invite you to make a profit, but rather to how to understand reality. I will try to invite you to understand the reality instead of the usual logic that often we use everyday.
Basically the market is an accumulation of information that is not perfect so the price can be said to be invalid. But why the market is flawed? What causes the price of disability? And how to think with logic that unusual? Following his presentation.
Why Disability Market?
Why the market is flawed? This is due to the decisions we take rests on the expectation of future, while the future itself is uncertain. So it can be said that this decision was wrong, because the price that occurred was the result of this error.
When we make decisions grounded in the future, then this decision will enable the mechanisms of expectation or concern one's self in other words you do not make decisions based on the information and of course it can reap mistakes in the future moments where expectations do not match expectations again. So we can pull the conclusion that the price of the currency is driven by the expectations of participants and expectations can be wrong so the current price is actually representative of misinformation.
But if we make a decision based on whether the information can be said to be true prices. Of course the price can be said to be true if the participants take decisions based on the information. But this is the condition that is not possible because the participants will nevertheless always be dominant to take any decision based on expectations or simply worries.
Then why participants use the expectation rather than information. There is no definite answer because the market would use them to enter or exit the market, but the answer can be given to the approach to money. When all things related to money then there is a sense in which we sometimes emotional fears about things that might happen in the days to come whether our money will grow or even disappear.
When someone wants to know the true future there will be no information to know how it was then in the future when this process begins forecasters. And today we can claim that the price is the result of errors in which the price moves with the expectations that is actually false. However, this expectation becomes reality at the time the information is confirmed expectations but if the expectation is contrary to expectations consequently prices will fall again.
We can not say the price is right because sometimes the market price does not reflect the information available and this is very far from the truth. The market is a combination of truth or error. But who were the main focus is how dominant both.
If the quantity is larger than the error truth then the price will move towards the truth so that the error will go with the trend. But on the contrary if the quantity of errors is greater than the truth, the truth will come to such errors. So even though the market one he could validate or legitimize itself by understanding their dominant at this point that we know what the name of the model of market 'True market model' or a collection of various errors and the truth will be a model of right or wrong does not matter.
This seems to draw our attention to find the model. Let us identify 'True market model' market moves to understand the fundamental sentiment not understand because he was the most dominant in the financial markets. If we want to see a history of crisis since the Great Depression 1929 to the recent crisis, the true model of the market is the most suitable criterion to illustrate the nature of the financial markets. For example, in the period 1982 to 1985 the American deficit that would weaken the currency but the market expectation of the election of Ronald Reagan became president of the American dollar to -40 makes the skyrocketing.
That's why Financial markets have descriptions with animal imagery. As we all know the bull which means bull, which means bear and bear Heard gangs animal instinct or where other people would come to do if the others did. Financial markets set to become acquainted with the dominant sentiment.
