For some people, investment means simply leaving a lump sum of cash in the bank for several years, and hoping that the accrued interest beats out the rate of inflation. For others however, it’s a serious game of finding opportunities in the markets, and making a return wherever possible. If you’re serious about investment, whether it’s in stocks, forex or something else, then you’ll know that the devil is in the detail, and for those that aren’t aware; here’s why.
The first and most obvious point is that incorrect data can mean an incorrect decision as to whether the price of an asset is going to move in your favour or not. Sometimes there can be very fine lines between something being correct or false, and this can send your position completely down the wrong path. Receiving an incorrect signal is never going to be good, which is why all investors very carefully select where they get their information from. If you’re talking technical analysis, that is to say that you’re interested only in numbers and patterns, then you need to know that certain patterns really are forming. On the other hand, if you prefer fundamental analysis, or the interpretation of events and finances, then you need to know that the information you’re getting is either unbiased, or being interpreted properly before you yourself get the chance to do so.
When you look down into the nitty gritty of things, accuracy is very important again, because, depending on the asset that you’re speculating on, very small changes in price could in fact mean very large changes in your bank account. Leverage means depositing smaller amounts that are scaled up so you can control a bigger position. This means that the difference between a price increasing by one or two pips might be very significant – the spreads offered by different brokers could be very valuable for the same reason. You’ve got to be accurate when weighing up the risk and reward of these kinds of scenarios.
Tweet ThisMost people will therefore stick with just a few sources that they can trust, and if you want to be a successful investor, then this should go for you too. As good as you might be at spotting patterns and interpreting market movements, you have to get your information from somewhere; so make sure it’s from somewhere good.
Comment on The Importance of Accurate Investment Data
This is a Guest Post
