The difference between a market explanation and a forecast
A convincing explanation after a currency move can sound like a reliable prediction before the next one. These are different tasks. An explanation organizes known events; a forecast makes a claim under uncertainty about something not yet observed.
Label the claim
Underline words that describe past facts and circle words that imply future outcomes. “The decision was announced” is different from “the currency will strengthen.” The second statement requires assumptions that should be visible.
Ask what would change the view
A useful hypothesis includes conditions under which it would no longer fit. If every possible outcome can be explained as confirmation, the claim is difficult to evaluate. Write a time horizon and an observable criterion before studying results.
Keep alternatives alive
List at least one other explanation for the same price movement, such as concurrent news or a change in liquidity. This does not mean every explanation is equally good. It prevents a single tidy narrative from becoming more certain than the evidence allows. In a study journal, uncertainty is information to preserve, not an embarrassment to edit out.
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