A paraphrase of the old golfing adage,
which has is that the best players “drive for show, and putt for dough”,
meaning that the ability to deal with the challenges that occur on the green is
more important than making spectacular shots off the tee-box, can be applied to
Forex trading.
In this version, while profits that derive
from sweeping trending moves, as occurred with EURUSD (above) yesterday, can be
spectacular, these do not come about with anything like the frequency of the
sideways, oscillating price movements that take up the majority of trading
time. Even staying alive, in the sense of not losing, during these up-and-down
movements, is an achievement. To rack up profits under such circumstances is the
mark of a great trader or trading system.
The key thing is that the pattern of
the day’s trading will be never be known beforehand. The successful development
of the Mandelbrot algorithmic routine depended on it being equally comfortable
whichever type of trading transpires as the trading day progresses.
Mandelbrot
handles ranges for dough
Yesterday also saw the above pattern
in the price movement of Cable, the GBPUSD currency pair. In this case,
Mandelbrot opened a trade to the downside shortly after the start of the London
session. The second profit target for this position occurred during the ten
minutes after the release of the UK CPI (inflation) figures, which the market
momentarily interpreted as a negative for the UK unit.
But, as if we needed to be reminded,
the market proved, once again, that it can be more capricious than even the most
fickle prima donna. It very quickly
decided to reverse in the case of this pair. However, Mandelbrot was up to the
occasion, closing the first trade for a profit and entering the next one soon
after, in the reverse direction, which also proceeded to success.
The two trades described above represented, for us, the
entirety of yesterday’s trading.
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