HLHB Weekly Update – September 16, 2011

Yesterday, I said that I had a feeling that the euro would trade higher. What I didn’t expect was for it to go all the way up to 1.3900. Sadly, my trigger was too conservative and I missed the move again! Boo!

Looking at the brighter side of things, the HLHB Trend-Catcher System did pretty good! Last week’s signal, which was a sell at 1.4074 finally closed at 1.3679 with a whopping 368-pip win when an upward crossover materialized early in the week. Not bad, eh?

EUR/USD 1-Hour Chart

The performance of the HLHB Trend-Catcher system this week is similar to last week. It feels like déjà vu since all the four valid signals (ADX was always above 20 and RSI was below 50 for downward crossovers and above 50 for upward crossovers) during the early part of the week turned out to be fakeouts.

It’s all good though. Even though the system did lose quite a bit, the losing trades were pretty small compared to winners. Besides, every system has its flaws. As traders, the most we can do is minimize them.

As for the economic environment, it has been relatively quiet. For the most part of the, EUR/USD merely ranged as no major news came out. Only yesterday did the pair really find a catalyst in the form of an announcement.

According to Pip Diddy, risk appetite was able to make its way back into the markets on the news that the ECB, together with other major central banks like the Fed, BOJ, and SNB, would be more lenient in providing loans to European banks to help them with their operations.

Whether the positive market sentiment will continue next week is still up in the air. For now, I’m keeping my eye out on economic data! You never know when one piece of disappointing data could totally turn on risk aversion again!

XOXO,

Huck

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