Price could reverse and the eventual move could be to the downside. Because Mandebrot (or anyone) is unable to tell the future, it cannot be sure that a breakthrough will even happen at all. Time and again the Euro bulls attempted to push the rate through to the upside, and time and again they were repulsed by the Euro bears (and/or the US dollar bulls). It was, as described in the headline, a real war of attrition. From the open of the London session through to the time when the New York traders go to their desks, the battle for the breakthrough of the 200 period Exponential Moving Average (EMA) on the 10 minute chart took place. On march 16 th last, the market in EURUSD behaved as illustrated in the chart at top.
How the OmiCronFX Mandelbrot algo routine handles it
These are optimised for the maximum profit possible. The other, very important consequence of this practice is the fact that, when losses do occur, they are relatively small compared to those trades that are successful. At that point, at least, we are looking at a trade that will not lose us money.
Considerable care is devoted by the software to shepherding the trade through the period between when it is taken on and when it reaches the break-even point, that exchange rate at which the stop-loss is set on the same level, or slightly better, than the entry rate. Here at OmiCronFX, we pay particular attention to the downside of any trade that is taken on. Apart from their utility in clarifying price action, and the ability of software to calculate and interpret them, they are also observed and acted upon by other traders, the ones that move the market. The OmiCronFX Mandelbrot algorithmic routine uses moving averages too, among many other things, in order to do its work. Exponential moving averages (EMAs) have an important place in the toolbox of Forex and other traders.