This is a question that newbie traders often amuse themselves with when they encounter in the media of such claims as: 100% guarantee of winning trades! I am afraid this is truly a myth, as any trader worth his salt knows.
In a similar vein, Cross ref:
The Institute for Fiscal Studies 25 years ago had difficulty to persuade journalists and parliamentarians that the think-tank’s figures were as good as official data. Now the British government can reassure journalists and parliamentarians of the quality of its data only by securing the imprimatur of the IFS.
The OBR (Britain’s new Office for Budget Responsibility) is widely described as a forecasting body. There is no reliable means of predicting economic growth three to five years ahead. It is possible that recovery will lead to rapid growth in tax revenues, and the deficit will reduce rapidly. It is also possible that a loss of business confidence aggravates the impact of public expenditure cuts and the current deficit proves intractable.
Anyone confident in predicting either outcome is a charlatan. There will always be a demand for forecasts, so there will always be a supply. But the reputation of economic forecasters depends on their slick presentations than the value of their work.
John Kay rightly said: Put simply, governments cannot be relied on both to set targets and to monitor compliance with these targets. The job you have, or should have, is therefore more akin to audit than to forecasting.
He said further: You and your colleagues should focus not on what might be inside a crystal ball, but on answering the question: “What is the level of taxation that is needed to support current and future expenditure plans on a sustainable basis.” Such an analysis would help to distinguish the structural element in the current deficit from the cyclical element attributable to the recession and countercyclical policies.
Problems of this kind have afflicted other countries such as Greece and the US, and have persuaded several other countries to establish bodies like the OBR.
By the same token, as traders, we have been taught there is no crystal ball or Holy Grail. We just have to analyse to find a high probability entry to take a trade to give us the best risk:reward ratio.
Any claim that there is a Holy Grail of trading, (or in the OBR) should be taken with a grain of salt as it is pure snake-oil marketing of self-proclaimed trading gurus.
Idkit aka Ana