Read all about my HLHB Trend Catcher System if this is your first time hearing about it!
Overall the system is effective in catching trends. Granted, it didn’t do so well on both EUR/USD and GBP/USD in the first months of the year when major central banks were mostly sticking to their established monetary policies.
It wasn’t until the second half of the year when things got interesting for the dollar and European currencies. For starters, geopolitical tensions in Russia, Ukraine, and even Syria encouraged risk aversion. It also didn’t help that Mario Draghi was already slowly hinting at possible QE.
The pound also took a beating after BOE’s Mark Carney did a U-turn from his hawkish stance and suggested that positive employment numbers won’t necessarily translate to interest rate hikes. In addition, the U.K. was also dealing with the uncertainty surrounding Scotland’s referendum at the time.And then there’s the Greenback, which found strong support from speculations that the Fed would hike its rates in early 2015. Overall risk aversion, as well as hawkish dollar bets, helped maintain the currency’s momentum until the end of the year.
The system has an average gain of 99 pips and an average loss of 61 pips from EUR/USD while it has an average gain of 213 pips and an average loss of 127 pips on GBP/USD per month. By the end of the year, the system gained a total of 463 pips on EUR/USD and 518 pips on GBP/USD.
Though the headline numbers aren’t as good as the 2013 HLHB System performance, it’s not too far either. I’ll take it! The RSI filter was really helpful in filtering fakeouts while the 50-pip trailing stop loss helped limit the system’s losses.
There you have it, folks! The HLHB Trend-Catcher is a legit system for catching trends! I don’t think I’ll be making any changes to the system. I’m thinking of adding USD/JPY to my watchlist though. What do you think?
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