HLHB Weekly Update – April 23, 2010

PoD Chart

I popped up my HLHB charts and I saw a lovely purple candle, indicating a downward crossover… but once again, I couldn’t enter! The 30 pip filter didn’t get hit and I failed to catch that 250 to 300 pip move. Gosh darn it! I keep missing out on all these nice moves!

What the Huck is wrong with my system! I haven’t had a signal in about a month! I think I need to make some adjustments on my mechanical system. Any suggestions fellas? A different oscillator? Reduce my 30-pip filter? Opinions please!

In any case, this week proved to be an exciting one. The wild ride all started on Monday, when Goldman Sachs, one of the biggest securities firm in the world, was accused of defrauding their investors. This caused a serious round of risk aversion, pushing the dollar higher against most major currencies.

Needless to say, the case had a huge impact on market sentiment. I mean imagine that… Placing your hard earned money in company that will use it in high risk ventures without telling you about it! Goldman sucks, if you ask me!

Then again, I guess these are all just unproven allegations. In fact, the equities market rallied sharply when the votes on the charge that was pressed against the firm only showed a 3-2 count, suggesting that the US Securities and Exchange Commision’s evidence was not compelling enough.

Then, on Thursday, when I thought the market was settling down, it took another spike downwards when the concerns regarding Greece’s debt situation resurfaced. According to Eurostat, Greece’s debt-to-GDP ratio will spike to around 14% by the end of 2010, higher than the 12.7% they predicted initially!

Sooner or later, I think Greece will be forced to tap its rescue package that was provided by other euro zone member nations and the International Monetary Fund. Things are looking pretty grim for Greece…

What’s next? Sue Sylvester and Will Schuester find themselves madly in love with each other on Glee? Batman making an appearance on Iron Man 2? Huck gets a boyfriend? Hah, I wish!

  • gulzaar

    Hello there.
    You are right about your 30 pip filter being a little too much. Perhaps you can go back to previous crossovers that were good but failed the 30 pip test, and see how big on average those candles were. That can be your new filter.
    Oscillators wise, all 4 hour oscillators will be too slow to confirm your trade immediately. Maybe you can use a 15 minute oscillator for confirmation.
    Good luck, and keep pipping!

  • gulzaar

    Hello there.
    You are right about your 30 pip filter being a little too much. Perhaps you can go back to previous crossovers that were good but failed the 30 pip test, and see how big on average those candles were. That can be your new filter.
    Oscillators wise, all 4 hour oscillators will be too slow to confirm your trade immediately. Maybe you can use a 15 minute oscillator for confirmation.
    Good luck, and keep pipping!

  • sunglow

    You have missed a good trade here and I am not so convinced about your 30 pip filter. Your EMAs crossed and that is as good a sign as any that the market has changed. Perhaps, with the 30 pip filter, you are trying to find the perfect entry point, which is a bit like trying to find the holy grail. Presumably, you are keeping a record of the times when the EMAs crossed and whether it would have been a successful trade or not, with and without invoking this 30 pip filter. In other words, is the 30 pip filter, over the longer term, really saving you from being faked out. (I nearly typed flaked out there – what was I thinking of?) The other point is the stochastics indicator. I favour much shorter trading periods than you and I have found that on the fifteen minute charts, whether the stochastics is oversold or not has little bearing on the outcome of the trade. I dutifully record it every time I make a trade, along with many other indicators, just to see if there is a pattern. Of all the indicators, I have found that the stochastics, with the same settings as yourself, has proved no help at all. There is no quick solution to your dilemma. All you can do is to record every cross over and record what all the indicators were showing at the same time. When you have a reasonably large number of these, you will be able to see whether your 30 pip filter is a help or a hindrance and whether any of the other indicators available assist you to pin point trading opportunities. This is going to take a lot of patience, which I appreciate does not come easy to you youngsters.

  • sunglow

    You have missed a good trade here and I am not so convinced about your 30 pip filter. Your EMAs crossed and that is as good a sign as any that the market has changed. Perhaps, with the 30 pip filter, you are trying to find the perfect entry point, which is a bit like trying to find the holy grail. Presumably, you are keeping a record of the times when the EMAs crossed and whether it would have been a successful trade or not, with and without invoking this 30 pip filter. In other words, is the 30 pip filter, over the longer term, really saving you from being faked out. (I nearly typed flaked out there – what was I thinking of?) The other point is the stochastics indicator. I favour much shorter trading periods than you and I have found that on the fifteen minute charts, whether the stochastics is oversold or not has little bearing on the outcome of the trade. I dutifully record it every time I make a trade, along with many other indicators, just to see if there is a pattern. Of all the indicators, I have found that the stochastics, with the same settings as yourself, has proved no help at all. There is no quick solution to your dilemma. All you can do is to record every cross over and record what all the indicators were showing at the same time. When you have a reasonably large number of these, you will be able to see whether your 30 pip filter is a help or a hindrance and whether any of the other indicators available assist you to pin point trading opportunities. This is going to take a lot of patience, which I appreciate does not come easy to you youngsters.

  • BeerMonster

    Given that you admitted your discrecionary trading is quite profitable, surely you would be better focusing on this rather than the mechanical system?

  • BeerMonster

    Given that you admitted your discrecionary trading is quite profitable, surely you would be better focusing on this rather than the mechanical system?

  • fxhitman

    I developed a visual filter method within the last week so this is in the hindsight category but it may be useful if used in conjunction with your own method.

    Open a 4H chart and on it put EMA(34) and EMA(3).

    Note that the maximum of the EMA(34) was at 12:00 and 16:00 on 4/15; EMA(3) crossed over at 20:00 on a red candle. Enter a short position on the next candle since the open was still in a downtrend. For stop loss use the EMA(34) + 10 at the beginning then drag the stop down.

    Exit the trade on the blue engulfing candle at 08:00 on 4/19.

    Reenter the short position when the EMA(3) drops below its value at the original exit, at 16:00 on 4/20, and ride it down to the doji at 20:00 on 4/22.

    Another approach is to follow the rule that the gap beween Friday’s close on 4/23 and Monday’s open would fill up by following the behavior of the EMA(3)–enter, close, reenter.

    (Thanks to Queen Cleopiptra for discovering the very useful EMA(34) which is also a Fibonacci number).

  • fxhitman

    I developed a visual filter method within the last week so this is in the hindsight category but it may be useful if used in conjunction with your own method.

    Open a 4H chart and on it put EMA(34) and EMA(3).

    Note that the maximum of the EMA(34) was at 12:00 and 16:00 on 4/15; EMA(3) crossed over at 20:00 on a red candle. Enter a short position on the next candle since the open was still in a downtrend. For stop loss use the EMA(34) + 10 at the beginning then drag the stop down.

    Exit the trade on the blue engulfing candle at 08:00 on 4/19.

    Reenter the short position when the EMA(3) drops below its value at the original exit, at 16:00 on 4/20, and ride it down to the doji at 20:00 on 4/22.

    Another approach is to follow the rule that the gap beween Friday’s close on 4/23 and Monday’s open would fill up by following the behavior of the EMA(3)–enter, close, reenter.

    (Thanks to Queen Cleopiptra for discovering the very useful EMA(34) which is also a Fibonacci number).

  • Huck

    Yeah, that oscillator looks a too slow. I may have to change the settings on that one, or replace it with another one, or even remove it completely. As for the 30-pip filter, I’m 100% sure it has saved me more often than not.

    I would LOVE to dive into a smaller time frame, but I can’t. I do have a day job and I can’t keep an eye on the charts 24/5, sadly…

  • Huck

    Yeah, that oscillator looks a too slow. I may have to change the settings on that one, or replace it with another one, or even remove it completely. As for the 30-pip filter, I’m 100% sure it has saved me more often than not.

    I would LOVE to dive into a smaller time frame, but I can’t. I do have a day job and I can’t keep an eye on the charts 24/5, sadly…