As you can see from the chart, the supposedly profitable long signal early in the week was invalid. Even though the EMAs crossed over and the RSI was above 50, the ADX had a value below 20. This meant that I couldn’t take it!
Maybe I’m going about this the wrong way. I think I should test my system on a lower time frame, specifically the 1-hour chart. After all, one of my Twitter friends, @LewisPosner1, back-tested it already and showed positive results. If you want to see the results as well as the code HLHB Trend-Catcher EA, just head on over to his blog. Don’t forget to thank him for his work though!
I’m also thinking that maybe one reason why my new system hasn’t really generated any profitable setup is because EUR/USD seems to be consolidating. If I remember correctly, Big Pippin pointed out in his Daily Chart Art earlier this week, that there’s a triangle in the 4-hour timeframe.
Maybe if a new theme emerges that would dictate market sentiment we’ll see more action on the pair, and hopefully more profitable setups from my system. Correct me if I’m wrong, but it seemed like there wasn’t any major event that rocked the markets. Sure, German Chancellor Merkel and French President Sarkozy’s meeting sparked risk appetite while Morgan Stanley’s downward revision to its outlook on global economic growth and disappointing reports from the U.S. triggered risk aversion. However, none of them seemed to have left a lasting effect on the markets.
Anyway, back to my dilemma, let me know what you think. Pretty please with candy sprinkles and kisses on top? Hit me up with your thoughts on Facebook or Twitter (@LoonieAdventure)! Or if you like, you can also write in the comment box below.
Thanks a lot guys! I really appreciate all the feedback. I haven’t really had the time to respond because I’ve been doing double shifts at the coffee shop for the past few weeks. But rest assured, I am reading each and every one of them. Just keep your suggestions coming!