HLHB Weekly Update – May 27, 2011

EUR/USD 4-hour Chart

Will you look at that! Stochastic actually saved me from a fakeout! Remember the signal I pointed out last week? Well, as it turns out, price only rallied 60 pips before falling again. Too bad my HLHB system seemed to have ran out of charm. Stochastic and my 30-pip filter weren’t able to keep it from another fakeout.

A crossover materialized at the start of the week. Shorting at 1.4121 would’ve been a valid trade since Stochastic still wasn’t in the oversold area then, and the following candle went 30 pips below the low of the crossover candle. However, after dipping below 1.4000, the pair rallied back up. The trade would have ended with a 57-pip loss when a new crossover materialized.

It wasn’t a valid buy signal though, as the candle following the crossover didn’t go over 30 pips its high.

On the economic front, it seems like neither the euro nor the dollar had what it took to become the forex market‘s top currency. Concerns about Greece’s fiscal health put spotlight back to Europe’s sovereign crisis.

For instance, yesterday we heard that the debt-ridden country may not be granted a tranche of financial aid from the International Monetary Fund (IMF) if it cannot prove that it can finance itself this year.

With risk aversion rearing its ugly head back into the market a few times, you’d think the dollar should’ve had a field day, right? But it didn’t. Worse-than-expected data from the U.S. hint which economic growth is slowing in the country, kept buyers at bay.

The most recent disappointing reports that we saw from the U.S. was the data on unemployment claims which jumped to 424,000 and the preliminary GDP report for Q1 2011 that fell short of the consensus by 0.4% when it printed at 1.8%.

EUR/USD Hourly Chart

In other news, I have won my trade for this week (similar to Pipcrawler)! This morning, right before heading to work around 8:00 am, I was able to get in short in EUR/USD when it found resistance at the 61.8% Fibonacci retracement level and the 1.4200 major psychological level.

I was ultimately hoping for 1.4000, but that level was so far away that I decided to split my position into two. My first position aimed for 1.4100 while the other aimed for 1.4000.

My first profit target eventually got hit, but price had a tough time going lower. I decided to close out my second position too, as I was afraid of erasing my gains.

Here’s a recap of the trade:

Shorted at 1.4184 with a 100 pip stop
Closed half at 1.4100: +84 pips / +0.42%
Closed other half at 1.4164: +20 pips/ +0.10%
Total Gain: +104 pips / +0.52%

Alright! That’s it for Huck this week. Don’t forget to follow me on Twitter and like my Facebook page. Toodles all!

3 comments

  1. Brit in Michigan

    Even newer newbie here. So how long have you been using your mechanical system and how well has it done for you. Best wishes down here in the Elementary school :-) 

    Reply
  2. ケー ちゃん

    Hey Huck, that was a good trade. Thanks for showing us the set up. Feels nice to made 100+ pips before weekend.

    Reply

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