Wednesday, September 11, 2013

We can discover a lot by methodical price data analysis

While the cautionary disclaimer we are all obliged to provide to our customers, that past performance is no guarantee of future success, is very true, there is nevertheless the opportunity to examine past events in order to be able to say something about the probabilities or them happening again.

That is what we do here at Omicron FX, among many other things. The chart above shows the relationship that the EURO versus the US dollar (EURUSD pair) has with the 200 Simple Moving Average (SMA) on the daily chart. While the segment of time shown above is small, it is a fact that this phenomenon is displayed over and over, during a long period of time.

We have the historical data and the computing power to allow the frequency, and therefore the probabilities, with regard to this to be determined. We can also examine them in conjunction with other relevant events, both technical and fundamental.

We have found that other pairs exhibit similar characteristics, often in time scale charts other than the daily. One major currency, studied against the US dollar, has a very strong bond with the 200 period SMA on the 30 minute chart. Again, we have the means to define this relationship on a scientific basis so that we can incorporate it in our trading which is, as always, fundamentally defined by thinking in probabilities.

1 comment:

  1. Feels great to have price analysis of most famous currency I can be able to do well.
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