HLHB Weekly Update – June 10, 2011

HLHB System

EUR/USD 4-hour Chart

The almost-valid signal from a couple of weeks ago on my HLHB system finally would have closed with a 315-pip win yesterday when another crossover materialized. However, the candle following the crossover didn’t go 30 pips below the low of the crossover candle. According to my HLHB system rules, it’s not a valid sell. Drats!

Earlier on in the week, the euro rallied up the charts like a toddler on a caffeine-high as economic reports from the U.S. disappointed one after another.

But it seemed to have ran out of fuel yesterday as traders locked in profits. Heck! Not even a hawkish European Central Bank (ECB) statement and upwardly revised growth and inflation forecasts, kept the euro from tumbling yesterday.

As for my trade ideas… Well, my analysis were essentially correct, but my greed and bias prevented me from jumping in. Let me review them on by one.

EUR/USD

If you take a look at my trade idea, you will see that I practically called a top, give or take a few pips. Unfortunately, I was too greedy in the sense that I wanted to have the perfect entry.

My plan was to sell right at 1.4650, right at the high on Monday. To be honest, I’m quite frustrated with this trade as my order was off by a ONE, yes ONE pip.

USD/CHF

I was correct in saying that a breakout was due. But one glaring mistake on USD/CHF was my directional bias. Instead of putting a straddle (buy if it breaks up, sell if it breaks down), I just stuck with a short stop order. I failed to recognize that the pair could possibly breakout either way, which made me miss the whole move.

What did I learn?

I should be flexible. While a trader must follow his or her plans, he or she must also know when to adjust. For my EUR/USD setup, the pair was already falling on Trichet’s statement. I should’ve taken that as a sign to jump in. For my USD/CHF idea, instead of having a directional bias, I must consider that the pair could break out either way.

In other news, I submitted my HLHB system to Forex Ninja’s Best Trading System of the Month contest. I know it’s not perfect, but it has been profitable in my back-testing and forward-testing. Hopefully, other traders will find it useful. If you have a trading system to share, please submit your ideas too. I’m sure a lot of traders will appreciate it.

XOXO,

Huck


  • Ewild

    Huck, What are all the currency pairs you trade with your HLHB system?

    • huck

      I based the stops of the average daily true rang of EUR/USD, so I only trade it with EUR/USD. I think you’ll have to make some adjustments if you plan to trade it on another pair. :)