Among many other things, the
OmiCronFX Mandelbrot routine uses Exponential Moving Averages (EMAs) in its
selection and management of trades. This is done in conjunction with prudent
risk management techniques, profit retention policies and timing considerations.
As well as active trading, the
software is also utilised to inform on possible subtle changes in price action
in the market place, so that these can be accommodated in the algorithm.
The
importance of Moving Averages
The chart at the top shows what
happens on occasion when a significant Exponential Moving Average gets in the
way of price movement. A LONG trade in EURUSD was developing nicely recently when
it got itself tangled up in the 200-period EMA indicator. This held the
development of the trade to such an extent that the software decided on the
precaution of taking some of the position off the table. In the event, this was
a wise move because, as can be seen below, things went into reverse soon after.
The position was eventually stopped out at break-even for the remainder of the
trade stake.
The work that we do is therefore an
iterative process, comprised of three separate elements: trading, software
coding, and research into the factors that go to make up the patterns that are
found in the Forex market in practice, so that they can be used to inform the continuous
development of the trading and coding , all for the betterment of the
profitability of the OmiCronFX Mandelbrot routine.
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