It’s the start of a brand spankin’ new trading year! This trend catcher caught three valid trades in the last few days. Here’s what happened.
Before we get to the details, 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.
As you can see, EUR/USD, GBP/USD, and USD/JPY all saw strong intraweek moves in the first full trading week. Unfortunately, the HLHB missed most of the move as it only validated signals towards the end of the week.
There was no valid signal on EUR/USD, two on Cable, and one on USD/JPY. I had to close the first GBP/USD trade because, you know, rules.
The closing of a GBP/USD trade led to an 18-pip loss for the HLHB this week. Not a good start, but I’m hopeful!
For now, I’m waiting to see what happens to these open shorts on GBP/USD and USD/JPY. What do you think? Will the dollar extend its gains, or will the bears finally step in after going on (a week-long) hibernation?