Greetings, ladies and gents!
I said last week that I plan to move on the next phase of trading system development, which is to forward test the two variants of the Happy Hunter System.
Well, I’ll be finally putting that plan into action when I officially start with daily updates tomorrow.
For today’s write-up, I’ll be showing how the two variants fared during the February 1-9 trading period. Why apply the system on those dates? Well, for the sake of completion, I suppose, since I’ll be evaluating the system on a monthly basis. And it wouldn’t do to miss the first few days of February.
Oh, if you’re a newbie who somehow stumbled across this write-up and have no idea what I’m writing about, then click on the links below to see the rules of the system.
- The Happy Hunter Price Action System (Fixed TP Variant)
- The Happy Hunter Price Action System (Trailing Variant)
Before we move on, let me first make the following 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)
Also, take note of the following parameters for the forward tests
- Currency pair for the tests is GBP/NZD and only GBP/NZD
- 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
- 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 spread wasn’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 whine and threaten to close out our account with the broker
That last part made me LOL after rereading it. Anyhow, the only real objective going forward is that the system does not reach a peak-to-trough drawdown of 20%.
In the (hopefully) unlikely event that the system suffers a 20% drawdown, then the system is automatically considered a failure and it’s back to the drawing board for me. Although it’s very likely that I’ll be evaluating the continued viability of the system once it reaches a drawdown of 10%.
Moreover, if I introduce tweaks to the system during the forward test, then I’ll have to redo every forward test already conducted based on the new tweaks. This is just proper record-keeping. Also, it motivates me not to make any tweaks, which is why I worked so hard and did my homework properly during the backtesting phase.
With all of that out of the way, it’s finally time to show y’all how the Happy Hunter fared during the February 1-9 trading period.
Below is a 1-hour chart of GBP/NZD for the covered testing period. The numbers on the chart refer to trades that were executed. The details of each trade are contained in the table below the chart.
Do note that I included the values for ATRH, SBar High, SBar Low, Bar1 High, and Bar1 Low. This is mainly because of the probable discrepancy in our data feed, so I’m showing y’all what I see on my own chart. Also, you can use it for practice for calculating the TP and SL levels (if you want).
For the sake of your convenience and record-keeping, I also note the entry type used in the last column of the table. Also, I included the usual equity curve and performance stats.
Oh, do note that trade #27 is still actually active, so you won’t find it on the table. I’ll probably include it in tomorrow’s update, assuming it’s closed by then.
Okay, that’s it. Enjoy!
Fixed TP Variant
Not a bad start for both variants, with the Fixed TP Variant raking in a decent 2.43% in 7 days and the Trailing Variant with a return of 3.42%.
What I personally find really surprising is that the Trailing Variant’s drawdown was shallower compared to the Fixed TP Variant.
And looking at the comparison of the equity curves of the two, it looks like trade #12 is the reason why the Trailing Variant’s drawdown was shallower, given that the Fixed TP Variant only won $47.44 or 0.47% while the trailing variant was able to capture $72.44 or 0.72%.
Also looking at the equity curves, we can see that both suffered a losing streak, thanks to the choppy price action on February 2 and the later half of February 5.
The Fixed TP Variant was also able to start recovering more quickly. However, the Trailing Variant quickly picked up the pace, thanks to the strong intraday trends on February 7 and February 9, so much so that it won out in the end.
Pretty exciting, right?
Anyhow, tune in until next time. And as always, if you have any questions, or if you just want to say “hi” then don’t be shy and write a comment down below!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.