It has been remarked on that in yesterday’s commentary we seemed to be indifferent about whether the news regarding Greece from the Eurogroup meeting in Brussels was good or bad. And that is true. We wrote:
“That is, of course, unless some word leaks from the two-day Eurogroup meeting in Brussels to the effect that talks have either broken down or that a definitive resolution, agreeable to the beleaguered Hellenic Republic as well as all the other Euro member states and the IMF, has been put in place”.
The reason we can be so sanguine (from a Forex trading standpoint – of course we would like the EU to continue and prosper from every other point of view) is that the OmiCronFX Mandelbrot algorithmic routine takes trades in either direction, long or short, as it deems appropriate on the basis of the price movement right at the time of entry.
The problem was that on Monday (May 11th) the exchange rate action in the Euro / US dollar pair was in a directionless, choppy state for the whole day. This led to a series of – small - losses and a proportion of break-even trades. While the trading software must be running, in order to catch the moves when they come, the Mandelbrot algorithmic routine is designed to achieve the smallest losses possible under the circumstances that pertained on Monday. There were no economic events that might have caused a movement, but the market often does go up or down even in that case. There were no significant market moving events yesterday, either, apart from the knowledge of what had transpired in Brussels (which was minimal – even the much lauded payment to the IMF by Greece has turned out to be from Greek reserves which had been on deposit with, wait for it…, the IMF). Nevertheless, the Euro / dollar pair started on an upward move towards the end of the Asian session, which was built upon very nicely after the start in London. Mandelbrot, happily, was there to jump on board for the ride.
All of this is captured in the illustration at the top.
…with apologies to Van the Man
We would like every day to be like yesterday, with sweeping, trending exchange rate movement where one would only have the pleasurable experience of wondering exactly where Mandelbrot might decide to lock in profits. Unfortunately, Forex trading is not like that. There will be days like Monday. As Van Morrison famously has it in his song:
“When all the parts of the puzzle start to seem like they fit
Then I must remember, there’ll be days like this”