The Happy Hunter Price Action System 4.0 (Fixed TP Variant)

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Greetings, ladies and gents! It took longer than expected, but I hereby finally present Version 4.0 of The Happy Hunter Price Action System (Fixed TP Variant).

Yes, you read that right. This is a new Version because the rules have been completely overhauled. You can read more about the changes in the List of Changes or you can go directly to the rules, whichever you prefer.

Again, these rules are for the Fixed TP Variant. If you’re looking for the rules for the Trailing Variant then you can find it here.

The Happy Hunter Price Action System 4.0 (Trailing Variant)

Both Variants use the same entry rules (that’s why they’re Variants). The difference lies in the exit method used, so if you’ve already read the entry rules, then you can go ahead and skip to the Exit Rules

Anyhow, below are the topics contained in today’s write-up. The only real changes are contained in the entry rules and exit rules, so regular readers may wanna click on that.

But if you’re a first-time reader, then I insist that you read everything, particularly my statements/disclaimers.

List of Changes
A Couple of Statements/Disclaimers
Parameters/Assumptions
The Core Patterns
Definitions
Entry Rules for Long Positions
Entry Rules for Short Positions
Exit Rules

List of Changes

Entry Type 2 has been broken down and then amalgamated with Entry Type 1, resulting in FIVE entry types based on the LHLL and HHHL patterns.
Entry Type 5 has been discarded, so we no longer use IB patterns as continuation patterns.
For convenience, entries that use LHLL and HHHL patterns have been designated as “A” rules (A1, A2, A3, A4, and A5).
Entries that use IB patterns, meanwhile, are designated as “B” rules (B1 and B2).
All entry rules now have a clear logical progression.
There are now two conditions when the SL can be moved to RSL.

A Couple of Statements/Disclaimers

Firstly, I make no claim to the profitability of this system (I’m forward testing it after all), so if you use the system to trade real money without doing your own tests, that’s on you, whether you lose money or get lucky and make money

Secondly, there’s no central exchange for the forex market, so there may be discrepancies in our data feed, and it’s highly probable that I may have a valid signal based on my charts where none exist on yours (and vice versa)

Parameters/Assumptions

Currency pair for the tests is GBP/NZD and only GBP/NZD (for now)
We only use the 1-hour chart to trade
Trading day begins at 12:00 am GMT+2 and ends at 11:00 pm GMT+2
Starting account balance is $10,000 per month
Max risk per trade is $50 or 0.50% of starting account
The lot size is variable, so learn to use (and love) the Position Size Calculator
As I’ve been stressing since I laid down my plans in My 2018 Trading Resolution, I’m assuming a fixed spread of 12-pips in all my tests; this system was designed with strict cost control in mind, so variable/floating spreads weren’t even considered
In cases where there are weekend gaps that would make the trade invalid (i.e. the market opens way beyond the TP or SL level), it’s assumed that the broker cancels pending orders, just like most of them usually do in real world conditions
But for orders that were filled before the weekend gaps, it’s assumed that we get out at TP (even if the gap greatly favors the trade) or at SL (even if the gap is not in favor of the trade) because it’s assumed that the broker guarantees our exit levels, well, that or it’s assumed that we complain and/or threaten to close out our account with the broker

The Core Patterns

This trading system uses price patterns known as Higher Highs, Higher Lows (HHHL) and Lower Highs, Lower Lows (LHLL), as well as the Inside Bar (IB) pattern to enter trades.

The HHHL pattern has the following elements:

The high of the recently closed candle must be higher than the high of the previous candle
The low of the recently closed candle must be higher than the low of the previous candle
The recently closed candle is designated as the signal bar

Pretty simple, right? Here’s an example to help you out:

The LHLL pattern, meanwhile, is just the opposite of the HHHL pattern, and it has the following elements:

The high of the recently closed candle must be lower than the high of the previous candle
The low of the recently closed candle must be lower than the low of the previous candle
The recently closed candle is designated as the signal bar

And here’s an example:

As for the IB pattern, it has the following elements:

The high of the recently closed candle must be lower than the high of the previous candle
The low of the recently closed candle must be higher than the low of the previous candle
The recently closed candle is designated as the signal bar

Basically, we’re referring to these candlestick formations:

Definitions

Take note of the following since I’ll be using them constantly when explaining the rules of the system.

HHHL – Higher Highs, Higher Lows candlestick pattern
LHLL – Lower Highs, Lower Lows candlestick pattern
IB – Inside Bar candlestick pattern
ATRH – 120-period average true range on 1H chart
SBar – Signal Bar or candle
Bar1 – the previous candlestick; the candle to the left of the signal bar
Bar2 – the candle previous to Bar1
Bar3 – the candle previous to Bar2; you get the idea…
SL – stop loss level
TP – target profit level
SW – small win; instead of getting out of a profitable trade at breakeven, we get out with a small win
SWT – small win trigger, price level the pair needs to reach before you can move your SL to SW
P1 – this is simply a 1-pip filter for our entries
RSL – reduced stop loss; basically just reduces risk by half
RSLT – reduced stop loss trigger; price level when you can move your SL to RSL

Entry Rules for Long Positions

Long Entry: Type A1

If an LHLL Patterns Forms
And if all LOWS of the 12 candles prior to the SBar are higher than SBar LOW
And if (Bar1 HIGH – SBar Low) =< (1.5 *ATRH)
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 6 hours after SBar formed, then cancel the order
Moreover, if a new LHLL pattern forms after the previous one, and the SBar LOW of the new pattern is lower than SBar LOW of the original LHLL pattern, and the existing buy stop order hasn’t been triggered yet, then reset everything based on the newer LHLL pattern

Long Entry: Type A2

If an LHLL Patterns Forms
And if all LOWS of the 12 candles prior to the SBar are higher than SBar LOW
And if (Bar1 HIGH – SBar Low) > (1.5 *ATRH)
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 3 hours after SBar formed, then cancel the order
Moreover, if a new LHLL pattern forms after the previous one, and the SBar LOW of the new pattern is lower than SBar LOW of the original LHLL pattern, and the existing buy stop order hasn’t been triggered yet, then reset everything based on the newer LHLL pattern

Long Entry: Type A3

If an LHLL Patterns Forms
And if not all LOWS of the 12 candles prior to the SBar are higher than SBar LOW
And if all LOWS of the 4 candles prior to the SBar are higher than SBar LOW
And if (Bar2 Low > Bar1 Low > Sbar Low) is TRUE
And if (Bar2 High > Bar1 High > Sbar High) is TRUE
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 6 hours after SBar formed, then cancel the order
Moreover, if a new LHLL pattern forms after the previous one, and the SBar LOW of the new pattern is lower than SBar LOW of the original LHLL pattern, and the existing buy stop order hasn’t been triggered yet, then reset everything based on the newer LHLL pattern

Long Entry: Type A4

If an LHLL Patterns Forms
And if not all LOWS of the 12 candles prior to the SBar are higher than SBar LOW
And if all LOWS of the 4 candles prior to the SBar are higher than SBar LOW
And if (Bar2 Low > Bar1 Low > Sbar Low) is FALSE
And if (Bar2 High > Bar1 High > Sbar High) is FALSE
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 4 hours after SBar formed, then cancel the order
Moreover, if a new LHLL pattern forms after the previous one, and the SBar LOW of the new pattern is lower than SBar LOW of the original LHLL pattern, and the existing buy stop order hasn’t been triggered yet, then reset everything based on the newer LHLL pattern

Long Entry: Type A5

If an LHLL Patterns Forms
And if not all LOWS of the 12 candles prior to the SBar are higher than SBar LOW
And if not all LOWS of the 4 candles prior to the SBar are higher than SBar LOW
And if (Bar1 HIGH – SBar Low) =< (1.5 *ATRH)
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 2 hours after SBar formed, then cancel the order

Long Entry: Type B1

If an IB Patterns Forms
And if (Bar2 Low > Bar 1 Low) is TRUE
And if (Bar2 High > Bar 1 High) is TRUE
And if all LOWS of the 4 candles prior to Bar1 are higher than Bar1 LOW
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 4 hours after SBar formed, then cancel the order

Long Entry: Type B2

If an IB Patterns Forms
And if (Bar2 Low > Bar 1 Low) is FALSE
And if (Bar2 High > Bar 1 High) is FALSE
And if (Bar1 OPEN > Bar 1 CLOSE) is TRUE
Then set buy stop order @ Bar1 HIGH + P1 + spread
However, if buy stop order is not triggered 1 hour after SBar formed, then cancel the order

Entry Rules for Short Positions

Short Entry: Type A1

If an HHHL Patterns Forms
And if all HIGHS of the 12 candles prior to the SBar are lower than SBar HIGH
And if (SBar HIGH – Bar1 Low) =< (1.5 *ATRH)
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 6 hours after SBar formed, then cancel the order
Moreover, if a new HHHL pattern forms after the previous one, and the SBar HIGH of the new pattern is higher than SBar HIGH of the original HHHL pattern, and the existing sell stop order hasn’t been triggered yet, then reset everything based on the newer HHHL pattern

Short Entry: Type A2

If an HHHL Patterns Forms
And if all HIGHS of the 12 candles prior to the SBar are lower than SBar HIGH
And if (SBar HIGH – Bar1 Low) > (1.5 *ATRH)
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 3 hours after SBar formed, then cancel the order
Moreover, if a new HHHL pattern forms after the previous one, and the SBar HIGH of the new pattern is higher than SBar HIGH of the original HHHL pattern, and the existing sell stop order hasn’t been triggered yet, then reset everything based on the newer HHHL pattern

Short Entry: Type A3

If an HHHL Patterns Forms
And if not all HIGHS of the 12 candles prior to the SBar are lower than SBar
HIGH
And if all HIGHS of the 4 candles prior to the SBar are lower than SBar HIGH
And if (Bar2 Low < Bar1 Low < Sbar Low) is TRUE
And if (Bar2 High < Bar1 High < Sbar High) is TRUE
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 6 hours after SBar formed, then cancel the order
Moreover, if a new HHHL pattern forms after the previous one, and the SBar HIGH of the new pattern is higher than SBar HIGH of the original HHHL pattern, and the existing sell stop order hasn’t been triggered yet, then reset everything based on the newer HHHL pattern

Short Entry: Type A4

If an HHHL Patterns Forms
And if not all HIGHS of the 12 candles prior to the SBar are lower than SBar HIGH
And if all HIGHS of the 4 candles prior to the SBar are lower than SBar HIGH
And if (Bar2 Low < Bar1 Low < Sbar Low) is FALSE
And if (Bar2 High < Bar1 High < Sbar High) is FALSE
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 4 hours after SBar formed, then cancel the order
Moreover, if a new HHHL pattern forms after the previous one, and the SBar HIGH of the new pattern is higher than SBar HIGH of the original HHHL pattern, and the existing sell stop order hasn’t been triggered yet, then reset everything based on the newer HHHL pattern

Short Entry: Type A5

If an HHHL Patterns Forms
And if not all HIGHS of the 12 candles prior to the SBar are lower than SBar HIGH
And if not all HIGHS of the 4 candles prior to the SBar are lower than SBar HIGH
And if (SBar HIGH – Bar1 Low) =< (1.5 *ATRH)
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 2 hours after SBar formed, then cancel the order

Short Entry: Type B1

If an IB Patterns Forms
And if (Bar2 Low < Bar 1 Low) is TRUE
And if (Bar2 High < Bar 1 High) is TRUE
And if all HIGHS of the 4 candles prior to Bar1 are lower than Bar1 HIGH
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 4 hours after SBar formed, then cancel the order

Short Entry: Type B2

If an IB Patterns Forms
And if (Bar2 Low < Bar 1 Low) is FALSE
And if (Bar2 High < Bar 1 High) is FALSE
And if (Bar1 OPEN < Bar 1 CLOSE) is TRUE
Then set sell stop order @ Bar1 LOW – P1
However, if sell stop order is not triggered 1 hour after SBar formed, then cancel the order

Exit Rules

If going long:

Make sure to set the following initially:

Set TP @ Entry – spread – P1+ (ATRH x 1.9)
Then set SL @ Entry – spread – P1 – (ATRH x 1.3)

If trade is triggered and price moves up, you must reduce your risk by moving your SL to RSL as soon as possible.

RSL @ Entry – spread – P1 – ((ATRH x 1.3) x 0.5)

And you can only move SL to RSL if either of two conditions are met.

The first condition is that RSLT is hit.
RSLT @ Entry – spread – P1 + ATRH
The second condition is that three consecutive candles form with higher highs and higher lows after SBar forms.

With regard to the second condition, if it’s impossible to move SL to RSL because the third candle closed below entry and too close to SL, then you can only move SL to RSL once there’s a subsequent candle that closes above entry.

Once SL has been moved to RSL, and if price continues moving higher, move your SL to SW if SWT is hit.

SWT @ TP – (ATRH x 0.2)
SW @ Entry + (ATRH x 0.2)

If going short: