So why should it make sense to wager on the U.S. economic prediction market to predict the future state of the country’s GDP growth by quarter-percentage points by the year end? PredictIt’s predicting that the U.S. economy will hit at least 5% GDP growth in each of the next four quarters, but it’s still trading in the low 70¢ range (meaning a very high probability of happening).
And I’m not talking about the strong economic recovery. I’m talking about the stronger U.S. trade deficit and trade surplus than we’ve seen since the Great Recession started. It would certainly make sense that, because the United States has so much more trade surplus than deficit, we’d see a higher GDP and trade surplus for our economy.
So, why are there so many traders in PredictIt who claim that we’re going to hit 5% GDP growth this year? The answer is clear: because the PredictIt market has a very strong bias. As a professional trader, you know the value of a good trading system, including that it should be backed up by a decent economic forecast. PredictIt is not backed by an economic forecast, and as a result is not as reliable as most other forex prediction systems.
That said, predicting the future is never easy – especially when it comes to predicting how the economy will respond to current global economic conditions. That’s why professional investors have used economic forecasting techniques to help them make money in the past. For example, the experts at the Federal Reserve and the Bank of England both use economic forecasting techniques to help them formulate policy and make decisions that affect the overall health of the economy.
In prediction markets, it is impossible to make any kind of economic analysis on your own. If you are an amateur forex trader, you need someone else to tell you what to expect and to make sure that your trading system works. By definition, you can’t do all of that yourself.
But even if you could, which I doubt, you’d still be wrong in predicting the future in the PredictIt prediction market because you have no experience making predictions on your own. You would have no way of knowing when it will hit a certain milestone, for example. Forecasting markets involve a lot of guesswork.
Guesswork makes you vulnerable to frauds and scams. It’s why so many novice forex traders lose money. Even if you had the technical expertise and the knowledge of a top expert in economics, you would still have a hard time forecasting the future, because the markets involve a lot of guesswork. And if you’re a beginner, the best approach is to hire a forex trading system to do the work for you.
I can understand your skepticism about using a prediction market to forecast the future of the economy. But the reality is that if you don’t take the time to research the market thoroughly, you can get ripped off. That’s why it pays to be careful when choosing your investment decisions.
The only way to guarantee a profitable GDP growth by year end is to look at the historical trends of the past and predict how things will go in the future. The best thing to do is to invest in an automated forex system that combines the experience of an experienced forex trader with the ability to read past trends in order to predict the future. That way, you can be sure that you won’t lose money in a trading position at a critical point in the cycle.
To find out whether the GDP prediction market can do its job for you, simply input your forecast into the PredictIt software and see if it receives any comments or questions. You should see a comment box on the screen letting you know that a professional forex trader has reviewed your forex system and found it to be reliable. If it does receive feedback from people who follow the GDP indicator, then it is most likely reliable.
The more successful traders there are on the prediction market, the better the results you will get. A good indicator to use is the DOW (Dow Jones index, DMA (DEX and/or DJIA), the Swiss national account, and/or the Swiss national currency pairs.
If you use a good indicator, your results should be much more reliable and you will see more profit as well. So don’t be afraid to invest in a good trading system. If you want to know how to predict the future, investing in one of the systems on the PredictIt site will give you a sense of satisfaction that you did everything you could to make sure you were right!