Using a large number of previous ECB monetary
policy statements and press conferences as the bases for analysis, of which the
chart on the left above, showing the situation on the occasion of the December
2014 event, is one, we were able to set the parameters of the OmiCronFX
Mandelbrot Forex algo routine to give the best possible chance of making decent profits
during and after yesterday’s event. Paramount in our considerations was the
requirement, as always, that if it could not take profits out of the market, it
would not at least lose money.
The chart on the left is the
simulated situation during the December press conference, using the historical
tester on the JForex platform. The chart on the right represents actual
trading, yesterday, March 5th 2015, also during the press conference.
In each case the parameters of the Mandelbrot routine are exactly the same.
Trading
the ECB monetary policy press conference
The press conference was held on this
occasion in Nicosia, Cyprus. In the event, the monetary policy statement
contained absolutely no surprises at all. Prior to the President of the ECB, Mario
Draghi, making his opening remarks, the EURUSD pair moved a little, to the
upside. It looked as if the selloff in the Euro on the previous day was
regretted somewhat by the main market participants, who were reversing their positions.
However, this move was not sustained. During the answers to the questions from
the assembled journalists, the exchange rate went into reverse but, once again,
this move was stalled before it had a chance to develop.
After the initial, relatively
low-level bout of activity, the rate went resolutely sideways. Mandelbrot
tried. It took two trades in all, both SHORT (expecting the rate to continue to
fall) but both were stopped out at break-even. It is a well-established fact
that a trader can only take out of the market what the market will give, and on
this occasion there was no give.
The risk reduction and cash
management part of the routine did its job well. There will be other
opportunities for profit.
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