Forecasting is an essential part of many fields, from general business (to estimate future inventory needs, etc.) to economics and finance. Many of the quantitative methods used in other types of forecasting are already familiar to traders. These include data smoothing methods and statistical measurements found in most analytical trading platforms.

This analysis covers the principles of forecasting and how traders can apply them to the technical analysis of the financial markets. Specifically, you’ll learn more about two key statistical measurements of a forecast’s accuracy and reliability, as well as a technique for improving the accuracy of a forecasting model after it has been developed.