Forecasting is very important especially to managers and businesses. The managers can come up with appropriate plans that will help to reduce the uncertainty of the future events. The quantitative forecasting method is a method that uses historical numbers as the foundation to build the forecast. It encompasses the leading indicator series. The indicators include the following; the supply of money and the data on the value of the stock (Goodwin, & Wright, 2010). Therefore, the historical information is being used to predict the future. Forecasting could be well used in stock trading, and quantitative forecasting will be ideal for giving the information on the stock prices. The stock markets always experience an influx of people wanting to carry out stock exchange during the period when the value of the stock or shares is high. In such situation, people would like to buy the shares when they predict that the prices of the stock will go up. On the other hand, when there is a likelihood of prices of the stock decreasing, then the individuals would not buy the shares. The investors in the stock market are advised to use the two main stock forecasting method that include Stock Forecast Algorithms and Fundamental Research
The stock broker will use Stock Forecast Algorithm to obtain information on the right time, price and quantity to trade. In this case, the algorithm is useful to a trader since it forecast the time the stock trader will find favorable buy or sell the stock. Therefore, the system uses numbers to give predictions. On the other hand, fundamental research is a method that all investors are required to use. The method involves carrying out a study on the financial health of a company and its various activities. Similarly, the method is considered as well rounded that will give predictions for all the data that matters. Also, it provides the true value of the stock.
Ultimately, forecasting is used by investors for predictions. Besides, the stock markets and quantitative forecasting apply the same concept. The stock market traders to will decide whether to invest their resources well or risk them.
Goodwin, P., & Wright, G. (2010). The limits of forecasting methods in anticipating rare events. Technological forecasting and social change, 77(3), 355-368.
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