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Forecasting Systems

Forecasting systems (or models) can be categorized by the mathematical laws which govern the phenomena being forecasted. On this basis, there are three generic types of forecasting systems:-

Deterministic systems... phenomena which are governed by the laws of the physical sciences, e.g. laws of gravity, laws of electricity, etc.

Probabilistic (or stochastic) systems... phenomena which are governed by quantum physics or poorly-understood systems, e.g. particle physics, human behaviour, market prices, etc.

Hybrid systems... phenomena which are governed by a combination ot deterministic and probabilistic factors, e.g. weather patterns, biological outcomes, etc.

Forecasting foreign-exchange prices falls squarely into the second category. This is because the factors driving driving foreign-exchange rates are to a wide extent probabilistic and thus subject to change as new information randomly arrive. The complexity of such systems rises exponentially as the number of (phenomena) currencies being forecasted increase.

Consequently, the task of forecasting foreign-exchange is extremely complex and computationally demanding. The computational task is further magnified when real-time forecasting is required. Compound these challenges with the real-life administrative and technical difficulties of dynamic information gathering and filtering, and the enormity of the currency forecasting task reveals itself.

Not surprisingly, the vast majority of real-time foreign-exchange forecasting systems are simplistic price-trend projecting systems, sometimes coupled with an equally simplistic reliance on the repetition of historical price-patterns. In contrast, longer-term forecasting systems tend to place greater reliance on quantitative factors but are of more use for strategic currency portfolio positioning rather than for actual real-time trading for profit.

ssiFX Real-Time Systems, Inc. currency forecasting systems are quantitatively-based mathematical models implemented on highly-sophisticated computer networks running parallel algorithmic processes designed to resolve the computational challenges required to deliver meaningful short- to medium-term forecasts which are essential for real-time forex trading.