It was an unfortunate week for the HLHB System, which saw tons of fakeouts and a strong trend that went in the opposite direction of an open position. 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.
If you’ve read last week’s update, then you’ll know that the HLHB System saw a deep 135-pip loss thanks to tons of fakeouts that popped up among the major pairs.
Unfortunately, the trend-catcher dealt with the same fate this week. As you can see on the chart below, the system was faked out by valid signals from EUR/USD and GBP/USD.
And as if that’s not enough damage, USD/JPY also trended lower, which is the OPPOSITE direction of an open trade from last week. Ouch!
The HLHB has two open trades going into the week. Will EUR/USD and GBP/USD yield enough pips to offset the previous weeks’ losses? I sure hope so!