The new European currency, due to start trading on January 4 1999, will have no history. This trite observation has tremendous consequences for investors and traders, risk managers and regulators.
Why? Because all of them have come to rely, to a greater or lesser extent, on time-series data and historical volatility as a guide to pricing the risk they are taking and the likelihood of price movements in the future. Suddenly, history disappears.
For chartists, who like to follow trends, there will be no trend.
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