What goes up must come down! Thanks to a fakeout on USD/JPY and a triggered stop loss on GBP/USD, the HLHB capped the week a few pips in the red. Boo!
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, all three major dollar pairs actually saw strong trends in the last couple of days. Unfortunately, EUR/USD, GBP/USD, and USD/JPY also saw periods of consolidation that was just asking for fakeouts.
It wasn’t all that bad though! The HLHB also validated a short EUR/USD signal right before the pair dropped near the end of the week. It’s just that GBP/USD’s intraweek trend ran counter to last week’s open trade while USD/JPY caught a fakeout before a massive move.
Looks like I’ll be starting the week with short trades on EUR/USD and USD/JPY. I’m basically betting on last week’s trends to continue this week. Think this week’s open trades will have a chance next week?