Trading on expectations.

Futures (Cedar Falls, Iowa), July, 1997 by Moynihan, Brendan

Expectations have become an increasingly essential element in the futures market. This was underscored by the Federal Reserve Board's adoption of a new economic forecasting model that takes the expectations of investors, consumers and businesses into account. Traders should take advantage of the significant role of expectations by applying a combination of techniques. These include using news events and data on it and analyzing markets through market activity and expectations.

Expectations move markets. The Federal Reserve is showing it thinks so in its adoption of models that take expectations into consideration. A combination of techniques allows traders to take advantage of this realization.

In November 1996, the Federal Reserve Board announced it had adopted a...

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