HLHB Weekly Update – November 25, 2011

I swear, I think my HLHB Trend-Catcher System is trolling me. Just when I have decided to change it, the system gives me another winning week.

EUR/USD 1-Hour Chart

As you can see, even though there were a couple of whipsaws, my system came up on top due to the large drop in the latter part of the week. Let’s review all the trades that the system caught.

1.) This was the open trade from last week. It didn’t turn out very well as price reversed and the trade stopped out. Gain/Loss: -30 pips
2.) Signal 2 was another whipsaw as price did not rally enough to hit the profit target. It had to close due to a new crossover. Gain/Loss: -23 pips
3.) Whipsaw. Price fell initially but found support at 1.3450, rallied, and hit the stop loss. Gain/Loss: -43 pips
4.) Invalid signal since the ADX was less than 20. Phew. No trade
5.) Ah, this was the big winner. After entry, price experienced a huge fall. At 150 pips, half position was taken off and the other half was left with a 150-pip trailing stop to ride the trend. First position: +150 pips. Second position: still open. Gain/Loss: 150+ pips

All in all, my system bagged 54 pips and counting (due to the still-open second position). I know it’s not much, but it’s enough to make me think twice about changing my system.

I think it was able to rack up pips because a dominant theme emerged that dictated price action for the most part of this week’s trading. Europe’s sovereign crisis once again took the market’s spotlight. According to Pip Diddy, poor bond auctions, credit rating downgrades, and issues on liquidity seem to have rallied enough bears to send the euro plunging on the charts.

However, my worry is that it’s not all the time that the market will be trending. Based on what I have observed with my system, it doesn’t do so well in times of consolidation. The ADX and RSI don’t usually filter out whipsaws like I hope they would.

What do you think I should do? Should I stick to my system or should I come up with a new one? I still have a few weeks to come up with a decision on what to do with it. So hit me up with your suggestions please!



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  • PAL 1

    Get rid of all the indicators. Use S/R (Fibs, P.points, eye-ball) and keep the fundies in mind.

  • Sumit Sarawgi


  • Intrigueme18

    I’d use stochastic instead of rsi