Trends are what allow traders and investors to capture profits. Whether on a 澳洲幸运5官方开奖结果体彩网:short- or long-term time frame, in an overall 澳洲幸运5官方开奖结果体彩网:trending market, or in a rangebound environment, the flow from one price to another is what c💟reates profits and losses. Four major factors cause both l🤡ong-term trends and short-term fluctuations.

These factors are government, international transactions, speculation and expectation, and supply and demand.

Major Market Forces

Learning how these major factors shape trends over the long term can provide 澳洲幸运5官方开奖结果体彩网:𒁏insight into h💫ow future trends may occur. Here are the four major factors:

Government

The government holds much sway over the free markets. The fiscal and 澳洲幸运5官方开奖结果体彩网:monetary policies that governments and their central banks put in place have a profound effect on the financial marketplace. By increasing and decreasing interest rates, the U.S. Federal Reserve can effectively slow or attempt to speed up growth within the country. This is called 澳洲幸运5官方开奖结果体彩网:monetary policy.

If government spending increases or contracts, this is known as 澳洲幸运5官方开奖结果体彩网:fiscal policy and can be used to help𒐪 ease꧟ unemployment and/or stabilize prices.

By 澳洲幸运5官方开奖结果体彩网:raising or lowering taxes, altering interest rates, and influencing the amount of dollars available on the 澳洲幸运5官方开奖结果体彩网:open market, governments can change how much investment flows into and out of the country.

International Transactions

The 澳洲幸运5官方开奖结果体彩网:flow of funds between countries affects🦩 the strength of a country's economy and its currency. The more money that is leaving a country, the weaker the country's economy and currency. Countries that predominantly export, whether physical goods or services, are continually bringing money into their countries. This money can then be reinvested and can stimulate the financial markets within those countries.

Speculation and Expectation

澳洲幸运5官方开奖结果体彩网:Speculation and expectation are integral parts of the financial system. Consumers, investors, and politicia🍎ns all have different views about where they think the economy will go in the future, and that affects their actions today.

The expectation of future action is dependent on current acts and shapes both current and future trends. Sentiment indicators are commonly used to gauge how certain groups are feeling about the current economy. Analysis of these indicators and other forms of 澳洲幸运5官方开奖结果体彩网:fundamental and technical analysis can create a bias or expectat🌟ion of future price rates and trend direction.

Supply and Demand

Supply and demand for products, services, currencies, and other investments create a 澳洲幸运5官方开奖结果体彩网:push-pull dynamic in prices. Prices and rates change as supply or demand changes. If something is in demand and supply begins to shrink, prices will rise. If supply increases beyond current demand, p🥃rices will fall. If supply is relatively stable, prices can fluctuate higher and lower as demand increases or decreases. 

A Mix of Factors

These factors can cause both short- and long-term fluctuations in the market, but it is also important to u♊nderstand how all these elements come together to create trends. While all of these ♎major factors are categorically different, they are closely linked to one another. Government mandates can affect international transactions, which play a role in speculation, and changes in supply and demand can play a role in each of these other factors.

Government news releases, such as proposed changes in spending or tax policy, as well as Federal Reserve decisions to change or maintain interest rates, can also have 💎a𒐪 dramatic effect on long-term trends.

The lowering of interest rates and taxes can 澳洲幸运5官方𒈔ꦑ开奖结果体彩网:encourage spending and economic growth. This in turn has a tendency to push market prices higher. However, the market does not always respond in this way because other factors may also be at play. Higher interest rates and taxes, for example, can deter spending and result in a 澳洲幸运5官方开奖结果体彩网:contraction or a long-term fall in market prices.

In t🍎he short term, these news releases can cause large price swings as traders and investors buy and sell in response to the information. Increased action around these announcements can create short-term trends, while longer-term trends may develop as investors fully grasp and absorb what the impact of the information means for the markets.

The International Effect

International transactions, the 澳洲幸运5官方开奖结果体彩𝔉网:balance of🦂 payments between countries, and economic strength are harder to gauge on a daily basis, but t🅘hey also&💮nbsp;play a major role in longer-term trends in many markets.

The 澳洲幸运5官方开奖结果体彩网:currency markets ga🅺uge the relative performance of one country's currency and, by extension, its economy. High demand for a cꩵurrency means that it will rise relative to other currencies.

The value of a country's currency can also affect how other markets perform within that country. If a country's currency is weak, this will deter investment in that country, as the 澳洲幸运5官方开奖结果体彩网:weak currency will erode potential profits. 

The Participant Effect

The analysis and resultant 澳洲幸运5官方开奖结果体彩网:positions taken by traders and investors based on the information they receive about government policy and international transactions create speculation as to where prices will move. When enough people agree on one direction, the 澳洲幸运5官方开奖结果体彩网:market enters into a trend that could sustain itself for many years.

Trends are also perpetuated by mar♏ket par𝄹ticipants who were wrong in their analysis. When they are forced to exit their losing trades, it pushes prices further in the current direction. As more investors climb aboard to profit from a trend, the market becomes saturated and the trend reverses, at least temporarily. 

The Supply and Demand Effect

Supply and demand affect individuals, companies, and the financial markets as a whole. In so💧me markets, such as commodities, supply is determined by a physical product. Supply and demand for oil are constantly changing, adjusting the price a market participant is willing to pay for oil today and in the future.

As supply dwindles🌺 or demand increases, a long-term rise in oil prices🀅 can occur as market participants outbid one another to attain a seemingly finite supply of the commodity. Suppliers want a higher price for what they have, and higher demand pushes the price buyers are willing to pay.

The financial markets have a similar dynamic. Stocks fluctu🐟ate on a short and long-term scale, creating trends. The threat of supply drying up at current prices forces buyers to buy at higher and higher prices, creating large price increases. If a large group of sellers were to enter the market, this would increase the supply of stock available and would likely push prices lower. Trends are fractal and appear in all time frames, from the shortest to the longest. 

The Bottom Line

As stated above, trends are generally created by four major factors: government, international transactions, speculation/expectatio🍸n, and supply and demand. These areas are all linked as expected future conditions shape current decisions and those current decisions shape current trends.

The government affects trends mainly through 澳洲幸运5官方开奖结果体彩网:monetary and fiscal policy. These policies affect international transactions which in turn affect economic strength. Speculation and expectation drive prices based on what future prices might be. Finally🍎, changes in supply and demand create tren✤ds as market participants fight for the best price.