As you can see from the chart above, my HLHB system generated a bearish crossover on Wednesday but stochastics was already below the 25 mark. This means that the sell signal was invalid, and I should wait for another crossover.
After six months of trading my HLHB system, it seems that it is pretty good. Despite some missed trades here and there, the positive results of my forward testing and back testing show that my HLHB system is actually quite profitable and is able to generally avoid fakeouts.
Thank goodness for that because what a wild, wild week it’s been! The markets have just been everywhere!
First, on Monday, EURUSD rose and recouped its losses from last week. Then, it dropped during the next two days as it seemed that risk aversion was back in play… but only to give back those gains yesterday! What the Huckie is going on?!
Just as Fed head Bernanke pointed out, the economic outlook is a bit murky and that growth prospects are “unusually uncertain” lately. I guess this explains why traders have been uneasy about taking on more risk. Add to that the upcoming release of the EU stress test results and we’ve got everybody at the edge of their seats!
On top of that, we’ve been seeing some instability in the US economy, which has led to the demise of the dollar in past weeks. But then equities have been posting some decent earnings this past days, which has also sparked risk appetite. Is the dollar just on the short end of everything right now? Will it continue to suck with bad data and good earnings?
It looks like a lot of economic events are still lined up for today and we have yet to wait and see whether risk appetite will stay for good. Stay tuned, everyone!