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Aaaaand the final results are in. So, how the two Variants of the Happy Hunter fare during the fifth month of forward testing?

Well, go ahead and click on the relevant jump links below for the deets.

And if you need to look at the trade details, you can find them by clicking on the relevant links below:

Okay, time for the actual evaluation!

This Month’s Final Results

Equity Curve Comparison (June 1-29)
Equity Curve Comparison (June 1-29)

This Month’s Verdict

Both Variants of the Happy Hunter Trading System were able to close out the month of June in the green, with the Fixed TP Variant up by 2.75% and the Trailing Variant up by 3.39%.

Not too bad, overall. Well, those returns are certainly better compared to what happened back in May when the Fixed TP Variant registered its first losing month and the Trailing Variant only managed to eke out a measly 0.34% gain.

However, it is worth highlighting that the Fixed TP Variant had a high water mark of +7.98% while the Trailing Variant enjoyed +9.37% in gains at one point.

And given that context, the final results are somewhat a bit underwhelming. In fact, they’re even a bit disappointing.

As to why, both Variants closed out the month way below their respective high water marks, that’s due to the terrible trading conditions during the last trading week of June.

June 26 and June 28 were especially bad. In fact, those two terrible days were responsible for wiping out 5% worth of gains from both Variants.

Let me repeat that: two horrible days wiped out a very large chunk of the gains harvested over the course of three weeks. Wowsers!

This is almost exactly the same as that painful, four-day losing streak back in May. And looking back, the same trading conditions were also present: choppy, sideways price action with limited volatility.

And after looking at the system’s performance, and then taking into consideration that the system was meant to perform under historically “normal” trading conditions, it becomes clear that the system is having a hard time because relatively “normal” trading conditions have been exceedingly rare during the five months of forward testing.

And admittedly, I didn’t really factor such a prolonged period of unfavorable trading conditions.

But whether it was due to the way the system was designed or just plain luck, both Variants have managed to survive for now.

Just kidding! I know for a fact that the system is surviving because of the way it was designed. Also, the system’s true enemy is spread. And remember, I use a fixed 12-pip spread in each and every trade to simulate trading conditions with a fixed-spread broker.

And to illustrate my point that the system’s design is sound and that system’s true enemy is spread, here’s how the system would have fared under a fantasy zero-spread environment.

Equity Curve Comparison (June 1-29) Under A Zero-Spread Environment
Equity Curve Comparison (June 1-29) Under A Zero-Spread Environment
Performance Under A Fantasy Zero-Spread Environment
Performance Under A Fantasy Zero-Spread Environment

Anyhow, it’s time for the verdict. And as a refresher, here are the main goals I laid down for the system when I first laid down my plans in My 2018 Trading Resolution way back in January.

  1. My peak-to-trough drawdown must not exceed 20%
  2. My reward-to-risk ratio must be at 1:1 or better
  3. I must open at least one new trade per day
  4. No losing year (Easy Mode)
  5. No losing month (Normal Mode)

And here are my bonus goals (some are obvious jokes).

  1. A win rate of 50% or better
  2. No losing week (Hard Mode)
  3. No losing day (Harder Than Hard Mode )
  4. No losing hour (This Is A Joke Mode)
  5. No losing minute (Holy Grail Mode)
  6. No losing second (Delusional Fantasy Mode)

Again, monthly growth targets are not listed in my goals since the system is still in the forward-testing phase.

Okay, time to give the verdict.

Both variants did not exceed the 20% drawdown threshold, so both Variants obviously met that goals. And after five months of forward testing, both Variants also have yet to breach the 10% “panic level” so it’s probably safe to say that both Variants will likely never invalidate this goal.

With regard to the goal to have a reward-to-risk ratio of 1:1 or better, I’ll just skip that as usual, since that’s not really applicable since the Trailing Variant has no set TP while the Fixed TP Variant has a reward-to-risk ratio that is inherently less than 1:1 because of the relatively large 12-pip spread.

As a side note, both Variants do consistently have a win rate that’s above 50%, so they’re meeting one of my bonus goals at least, which makes up for missing out on the reward-to-risk ratio goal.

Next, there was at least one trade per day in June, so the system easily meets that goal.

As for the fourth goal, that’s still in progress and we won’t know until next year, but both system are still in the green for the year so far, so we will probably meet this goal.

As for the fifth goal to have a winning month (each month, every month), well both Variant already messed up on that one.

As noted earlier, the Fixed TP Variant recorded its first losing month back in May. The Trailing Variant, meanwhile, failed a month earlier when it ended the month of April with a 1.71% loss.

Overall, both Variants are still meeting my critical goals, well, except for the goal to have a winning month every month. Even so, that’s not enough of a reason to stop the forward tests and scrap the system. There is still room for improvement, though.

Going Forward

Version 5.0 is meant to finally address the Fixed TP Variant’s poor reward-to-risk ratio. Well, that was the original intent for Version 5.0, and I was actually almost done with it.

However, the terrible experience we had during the four-day losing streak in May had a lingering effect on my mind in that it made me want to address that problem.

And thanks to the two days of pain during the last week of June, I realized that the same thing can happen again.

I therefore resolved to incorporate that into Version 5.0 as well. As to how I’d address it, I’m actually stumped at the moment.

However, the problem lies with having a ton of trades during periods of prolonged, choppy price action, since a lot of losing trades get generated.

Two options would therefore be to (1) give the system more leeway by increasing the stop loss and allow it to ride out the periods of choppy price action or (2) use a filter to reduce the number of trades.

I’m kind wary of taking the first option since it’s a real pain to balance it out, given that the trade off for a wider stop is a lower win rate. As for the second option, well, there are so many ways to do it, but I’ll probably go with refining the entry rules further. At this point, however, I’m open to using technical indicators as trade filters.

Anyhow, if I can’t find a solution by the end of the month, I’ll probably just implement the current Version 5.0 and then introduce the planned tweaks as Version 6.0 later.

Okay, that’s enough for today. It’s back to the daily updates tomorrow. And as always, I enjoy your feedback. So if you have any questions, or if you just want to say “hi” then don’t be shy and write a comment down below!