Fakeouts, fakeouts everywhere! This week’s trading performance is proof that taking more trades won’t necessarily lead to more profits. Here’s what happened.
Before we get to the numbers, read all about my HLHB Trend Catcher System if this is your first time hearing about it!
Basically, I’m catching trends whenever the 5 EMA crosses above or below the 10 EMA. A trade is only valid if RSI crosses above or below the 50.00 mark when the signal pops up. And in this version, I’m adding ADX>25 to weed out the fakeouts.
As for stops, I’ll continue to use a 150-pip trailing stop and a profit target of 400 pips. This might change in the future, but I’ll stick to this one for now.
Oh, and as mentioned before, I’m switching back to applying the HLHB system to the 1-hour time frame. Using 4-hour in Q1 2017 and Q2 2017 wasn’t bad, but I think using this trend-catcher on the 1-hour could yield better results.
After a back-to-back win, the HLHB hit the brakes this week. As you can see, the trend-catcher yielded two new signals for EUR/USD, four from USD/JPY, and another one on GBP/USD.
Unfortunately, more signals didn’t translate to more profits in this case. USD/JPY saw tons of mini fakeouts that set the HLHB back by 24 pips.
Meanwhile, the system missed EUR/USD downtrend with a buy signal that led to a 139-pip loss and it had to sustain a 14-pip loss on Cable to make way for a new signal.
What a bloodbath! Things are looking up, though. An open trade on GBP/USD already has 101 pips locked in, while USD/JPY’s latest signal is already limited to a stop loss of 47 pips.
Will we see more fakeouts next week? Or the HLHB go back to taking advantage of strong trends? I’m crossing my fingers for a good week ahead!