Tuesday, January 14, 2014

How the OmiCronFX Silver Trigger algorithmic routine works | Normal service is being resumed on tapering

How the OmiCronFX Silver Trigger algorithmic routine works

The Silver Trigger operates like a power tool for Foreign Exchange trading. Just as a tradesman can now use a electric screwdriver to save wrist strain, we use the Silver Trigger to save us mental strain in decided such things as the amount of momentum that indicates the best time to enter a trade, the optimum size for the position, the location of the Stop Loss order, the point at which profit retention policy should come into play and the level of risk that will be allowed to exist as a successful trade progresses.

All of these things support, over time, the idea that we must keep probability on our side. As with all power tools, there is still a skill required for the use of the Silver Trigger. It will not compensate for a haphazard or lazy approach to trading. We must continue to do the homework. This comprises of calibrating the program so that the criteria mentioned above will be best suited to the different pairs that we study, as the best values do differ from instrument to instrument, and in the study of the fundamental analysis and the technical aspects that surround the whole question of price movement.

Research here at OmiCronFX is continuous. We are conscious that the optimum levels for the criteria mentioned above can change over time, so they have to be monitored. We are also working at carrying out this analysis for more pairs and, of course, we intend to extend the treatment to other instrument classes in the future, for example to equity indexes, commodities and derivatives.

Last but not least, we continue to develop other algorithmic tools to assist in our trading, such as the Mandelbrot routine, which assists in the identification of trends, their continuation and their changes of state.

Normal service is being resumed on tapering

There is a real sense in the market this morning that the disappointing Non-Farm payrolls figure of last Friday might turn out to be something of an outlier. Policy is not made on the basis of single numbers, even if participants in the various markets are prone to act as if that were the case. It is the trend that matters, in terms of any metric you like, whether it is GDP, interest rates, employment figures or anything else. Monthly employment figures are notorious for being revised, which normally gets nothing like the attention that the main announcement gets, and the latest ones could well have been adversely affected by the severe weather that many parts of the US has been experiencing.

Yesterday in the US two members of the Federal Reserve, Lockhart from Atlanta and Bullard from St. Louis, gave speeches which were to the effect that Friday’s employment results for December would not stand in the way of tapering.

We will be monitoring the situation closely to determine the action to be taken with regard to the currency pairs we watch, in line with the above. As a consequence of yesterday’s comments on the Aussie against the Kiwi, AUDNZD, we have taken a short position in this pair.

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