Hey all! Can you believe we’re already done with the first half of 2020?!
Thanks to a lot of tight ranges, the HLHB only had a handful of valid trades in Q2 2020.
If you’ve just tuned in, know that the Huck Loves Her Bucks (HLHB) System aims to catch trends by using the 5 and 10 EMAs on the 1-hour charts of major dollar pairs like EUR/USD, GBP/USD, and USD/JPY.
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 as a parameter to weed out the fakeouts.
Check out a backtest that I did if you want to know more about the version that I’m using!
For now, here’s a breakdown of how the system did in the second three months of the year:
The drama around initial lockdowns and stimulus measures settled wound down in April and May as headlines centered around coronavirus cases and vaccine prospects.It wasn’t until the start of June when high-yielding bets rocketed over the countries reopening their economies.
While the HLHB saw a nice 140-pip win some time in mid-May, fakeouts during the sharp price moves in June also led to 149 and 150-pip losses for the trend-catcher.
By the end of the quarter, the HLHB is up by only 56 pips (+0.19%) from the pair. That’s tighter than my post-isolation pants!
Unline in the Eurozone, coronavirus cases and lockdown measures in the U.K. were more pronounced. On top of that, investors continued to worry over a hard Brexit.
This is probably why GBP/USD didn’t see ranges as tight as EUR/USD did in April and May and why the HLHB caught a few hundred winning (and losing!) trades during the period.
Thanks to three trades that gained more than 100 pips each, the HLHB was able to end Q2 with a net gain of 328 pips (+1.09%) from Cable. WIN!!!
Like in GBP/USD, USD/JPY also saw a couple of decent trends in the last three months.Unfortunately, the pair also traded on tight ranges in between those fantastic moves. More importantly, the HLHB validated a lot of those fakeouts! They can add up, ya know.
So while the HLHB clocked in a cool 114-pip gain back in April, a good number of shallow cuts whittled the profits down to a net of 66 pips (+0.22%) by the end of the quarter. That’s still in the green so I’ll take it!
That’s it for the numbers in this update!
It will be interesting to see which pairs see more volatility than the others in the next couple of months.
Some Eurozone countries will probably push for reopening during their summer months, while the U.K. navigates around reopening an economy despite high infection rates. Meanwhile, the U.S. will have to deal with a pandemic, trade and geopolitical skirmishes against China, AND pre-election drama.
What do you think? Will post-lockdown trends lead to strong price movements? Or will we see limited price action during the “sell in May and go away” period?