Fakeout galore! The HLHB is off to a weak start in May, as it saw a yuuuge fakeout that dragged the system’s coffers in the red. Here are the deets!
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.
Unlike in last week’s trading, there are actually fewer signals from the major dollar pairs this week.
That didn’t help the HLHB System much, though, especially when it saw a HUGE fakeout from GBP/USD.
As you can see, the HLHB validated a short signal right before Cable enjoyed a strong intraweek rally. I’m talking 125 pips worth of wrong signal!
And as if that doesn’t hurt enough, EUR/USD and USD/JPY’s open trades from the previous week also ended up in the red. Boo!
Over the next couple of days I’m holding an anti-dollar party with a long trade on EUR/USD and GBP/USD and an open short trade on USD/JPY. Pip Diddy tells me that the dollar had a mixed performance last week.
Think the Greenback will have a decent chance at losing against its counterparts next week?