I use Xtick! See what happened to my trade a few posts up!
Good luck with the trade. The major risk events coming up make this a 50/50 play.
Awesome, awesome week for the HLHB Trend-Catcher! Thanks to the trending EUR/USD, the system was able to bag a net total of 297 pips!
With the number of high profile economic events lined up last week, the pair exhibited a lot of volatility. I thought the HLHB Trend-Catcher would get faked out a lot, but thankfully, the pair made a lot of intraday trends. That, of course, was good for my system.
Hereās a rundown of the trades it took:
- Invalid signal since RSI was below the 50.0 level the candle prior.
- Long at 1.2273. Closed at 1.2259 due to new crossover. -14 pips.
- Invalid signal since RSI was already below 50.0 the candle prior.
- Long at 1.2283. Closed at 1.2292 due to new crossover. +9 pips.
- Short at 1.2292. Closed at 1.2318 due to new crossover. -26 pips.
- Long at 1.2318. Closed at 1.2297 due to new crossover. -21 pips.
- Short at 1.2297. Closed at 1.2262 due to new crossover. +35 pips.
- Long at 1.2262. Closed at 1.2354 when 50-pip trailing stop was hit. +94 pips.
- Short at 1.2213. Closed at 1.2184 when 50-pip trailing stop was hit. +29 pips.
- Long at 1.2193. Closed when 200-pip target was hit. +200 pips.
Total Gain: +297 pips
Trade Idea: 2012-8-8 23:20
Will you look at that?!? Sexy, aināt it? EUR/USD, after touching the 61.8% Fibonacci retracement level, formed two dojis. Right after that, a bearish candlestick formed, telling me that the pair could be headed down. To add to my downside bias, there also seems to be a bearish divergence going on as price has been making ālower highsā while the Stochastic has been āhigher highs.ā
I believe that the fundamentals are also in my favor. Yesterday markets were once again reminded that the European debt crisis is still far from being over. The euro gave up ground to most of its counterparts following rumors that the ECB would hold off purchasing bonds until the German Constitutional Court approves the ESM. On top of that, S&P also lowered its credit rating outlook for Greece from stable to negative.
Sure, the shared currency sometimes rallies when risk appetite is up. But looking at the bigger picture, both fundamentally and technically, I think that markets are still bearish on the euro. Thatās just me though!
Because my technical and fundamental analysis have lined up, Iāve decided to sell at market. Iām ultimately aiming for 1.2100, but Iāll be taking part of my position every now and then if the trade goes my way. As for my stop, Iāve placed it 100 pips away, just a couple of pips above the 61.8% Fib.
To recap:
Sell at market (1.2380), PT 1 at 1.2200, PT 2 at 1.2100, SL at 1.2480. Risk disclosure.
There ya go! Thatās my trade idea for today. Whatās yours?
XOXO,
Huck
Remember the still-open trade that I cited in my last update? It closed with a 47-pip win at 1.2243 when the 50-pip trailing stop got hit.
The HLHB Trend-Catcher systemās gains were only limited last week because there were no big trends that materialized on EUR/USD. But Iām still pretty happy with my systemās performance because the RSI was able to filter a couple of fakeouts. Hereās a quick rundown of the signals that materialized:
- Invalid signal since RSI did not cross 50.0.
- Long at 1.2392. Closed due to new crossover at 1.2388. -4 pips.
- Invalid signal since RSI did not cross 50.0.
- Invalid signal since RSI did not cross 50.0.
- Short at 1.2390. Closed due to new crossover at 1.2424. -34 pips.
- Long at 1.2425. Closed due to new crossover at 1.2398. -27 pips.
- Short at 1.2398. Trailing stop hit at 1.2377. +21 pips.
- Invalid signal since RSI was not above 50.0.
- Short at 1.2351. Trailing stop hit at 1.2291. +60 pips.
- Long at 1.2314. Closed due to new crossover at 1.2275. -39 pips.
Total (including the trade from the previous week): +24 pips
Iād be lying if I told you that Iām contented with how my HLHB Trend-Catcher is doing though. I mean Iām happy with it, but I think I can tweak it more to make it even better.
Iām thinking about removing the 50-pip trailing stop for weekend trades like what I did last week. Iāll replace it with a regular 50-pip stop if the trade remains open over the weekend.
As Iāve said in my HLHB Q2 2012 review, all weekend trades that materialized during the quarter closed as winners. Also, the open trade that I pointed out in my last update couldāve hit my 200-pip profit target at 1.2396 had there been no trailing stop in place.
What do you think? Please lemme know what your thoughts are by voting in the poll! Thank you!
As for my EUR/USD trade, itās currently up 89 pips. That may seem a lot, but I also have a wide 100-pip stop.
This means that I need to let it ride the downtrend further so that my reward-to-risk ratio is more than 1:1. I am trading the daily time frame, which means Iāll be holding on to the trade longer than usual.
It looks like the trend line held. Yikes! Iām moving my stop to breakeven to be safe.
HLHB Trend-Catcher
There were a lot of fakeouts last week, but thankfully, the HLHB Trend-Catcher still ended up positive. The gain wasnāt impressive though, as the system only bagged a grand total of 15 pips.
Here are the trades and their corresponding results:
- Invalid signal since RSI was already below 50.0 before the downward crossover.
- Another invalid signal since RSI was over 50.0 before the upward crossover.
- Invalid signal since RSI was below 50.0 before the downward crossover.
- Long at 1.2296. Closed when 50-pip trailing stop was hit at 1.2225. +71 pips.
- Short at 1.2326. Closed due to new crossover at 1.2342. -16 pips.
- Long at 1.2342. Closed when 50-pip trailing stop was hit at 1.2337. -5 pips.
- Short at 1.2334. Closed due to new crossover at 1.2333. -1 pip.
- Long at 1.2333. Closed due to new crossover at 1.2323. -10 pips.
- Short at 1.2323. Closed due to new crossover at 1.2334. -11 pips.
- Long at 1.2334. Closed due to new crossover at 1.2311. -23 pips.
- Short at 1.2311. Closed due to new crossover at 1.2304. +7 pips.
- Long at 1.2304. Closed due to new crossover at 1.2283. -21 pips.
- Invalid signal since RSI was below 50.0 before the downward crossover.
- Long at 1.2325. Closed due to new crossover at 1.2349. +24 pips.
- Invalid signal since RSI was already above 50.0.
- Another invalid signal since RSI did not cross the 50.0 level.
- RSI was above 50.0 during the crossover. Invalid signal.
Total gain: +15 pips
As you can see, there were numerous fakeouts, especially during the middle of the week. What Iāve learned from the months I have been testing the system is that fakeouts are normal. Systems catch them from time to time, but you canāt completely eliminate them. Iām just glad that the system had another positive week.
I believe its about time you opened a thread to get the programming wizards to make this system into an EAā¦
You could say it was a āso-soā week for the HLHB Trend-Catcher. It came out with a gain at the end of the week, but its win wasnāt spectacular. Hereās the list of trades that the system generated:
- Invalid signal since RSI was above 50.0 before the crossover candle.
- Invalid signal since RSI was below 50.0 before the crossover candle.
- Long at 1.2507. Closed at 1.2556 due to new crossover. +49 pips.
- Invalid signal since RSI was above 50.0.
- Long at 1.2538. Closed at 1.2499 due to new crossover. -39 pips.
- Short at 1.2499. Closed at 1.2516 due to new crossover. -17 pips.
- Invalid long since RSI was below 50.0.
- Invalid signal since RSI did not cross the 50.0 level from above.
- Long at 1.2546. Closed at 1.2588. +42 pips.
Total Gain: +42 pips
Am I bummed out that my system hasnāt been raking in a lot of pips? To an extent, yes, but I have to understand that it is the summer. During this time, the market tends to range, which means less trend plays and big moves.
I should even be happy now that my system ISNāT losing. Most trend-following systems normally experience huge drawdowns in times like this.
In my last trade idea, I incorporated the 100 SMA in my discretionary system. Taking a look at the indicator on the daily timeframe of EUR/USD, we see that resistance on the moving average held!
Going into the weekend, I had a bullish bias on the pair because I was anticipating Fed Reserve Chairman Ben Bernanke to confirm QE3. Reports say that the central bank head honcho did hint at further easing. However, EUR/USD didnāt rally because of renewed concerns about Spain.
To be honest, I donāt know if I should buy or sell the pair now. Nonetheless, I will still keep close tabs on it. Iāll gauge what the more dominant theme (i.e., the prospect of QE3 vs. the possibility of a Spanish default) will be and make my decision based on market sentiment.
So, there you go! I hope yāall got in on the action on the charts last week.
For those following my HLHB Trend-Catcher, the last signal that materialized (long at 1.2584) is still open!
Do you see that very clear uptrend in EUR/USDās hourly chart? I think going long ahead of the ECB interest rate decision might be a good idea so I bought the pair at market!
With price testing support, I think I better be quick and jump in before I get left behind. After all, the pair is also exhibiting a bullish divergence, as price has made a āhigher lowā but Stochastic formed a ālower low.ā
On the fundamental side of things, it seems that investors are anticipating a big move from the ECB. Iām anticipating this optimism to last in todayās trading and provide the euro with support, enough for EUR/USD to rally to 1.2600.
Iāll be honest and tell you that I have no idea what to expect when ECB President Draghi announces the central bankās monetary policy decision. With that said, I promise to close my trade ahead of the event. I donāt want to get burned when volatility surges tomorrow!
But just in case we do see volatility pick up ahead of the rate decision, I placed my stop well below the most recent low at 1.2475. I think that would give my trade enough room to move.
So, hereās my game plan:
Long EUR/USD at market (1.2524), SL at 1.2475, PT 1.2600, 1% risk. Risk disclosure.
What do you think of my trade idea? Hit me up!
*Cross-posted from my blog, The Loonie Adventures of the Forex Noob
hey Huck
Seeing that its dropped down to level 505 - 510 right now. I am wondering what your strategy would be now? Is there any support for a bounce to break even?
cheers for the idea.
I kept it open! Iāll post an update in a bit 
I must admit that this trade gave me quite a scare at first. When I jumped in, price quickly pierced through the rising trend line, making me think that it was going to head down fast. I had half a mind to close already, but I ultimately decided to let the trade breathe.
As the London trading session rolled along, price slowly made its way higher.
According to many news reports, the pair rallied due to the marketās positive outlook on the ECB Interest Rate Decision. Iām very happy that my fundamental and technical analysis on the pair was spot on.
Total Gain: +76 pips / +1.53%
I was also looking to go long at 20. But as I was drawing my pretty lines it started bouncing back. I then got in Long at 05. I closed off at around 65 as it starting getting choppy was worried it might fall againā¦Issues of having a full time job and trading.
Thanks again. Still a happy 60 pips I made
Ah, 'tis a sad week for the HLHB Trend-Catcher 3.0. Even though the pair trended upwards, the extreme volatility during the middle of the week distorted the RSI, preventing the system to jump in on the trend. In addition, the volatility the pair experienced also kept my trades from staying long enough to profit!
But there is good news: the trade that was left open the week before ended up with a huge win. It closed at the first crossover of the week, which enabled it to bag 150 pips.
You can see clearly that EUR/USD mostly moved higher during the week. Unfortunately, the rally was also a bumpy one! The German Constitutional Courtās ruling as well as the Fedās FOMC Statement caused the pair to spike a couple of times.
Here are the signals that the HLHB Trend-Catcher generated:
- Invalid signal since RSI did not cross the 50.0 level.
- Another invalid signal. The RSI was already above 50.0 when the upward crossover happened.
- Sold at 1.2780. Closed due to new crossover at 1.2778. -2 pips.
- Long at 1.2778. Closed due to new crossover at 1.2767. -11 pips.
- Short at 1.2767. Closed due to new crossover at 1.2805. -38 pips.
- Long at 1.2805. Closed when 50-pip trailing stop was hit at 1.2822. +17 pips.
- Invalid signal since RSI was already below 50.0 prior the crossover candle.
- Invalid signal since RSI was already above 50.0 prior the crossover candle.
Overall, including the week priorās trade, the system brought in a net total of 116 pips. Not bad!
As I for my discretionary system, I didnāt get in on any action last week. I donāt want to sit on the sidelines for long though, this is why Iāll be keeping close tabs on USD/CHF in the coming days. Should a valid trade setup materialize, you can count on me to pull the trigger!
I hope you guys have a good week. Good luck!
XOXO,
Huck
It looks like thereās a bearish confluence on EUR/USD around a previous support area. So this week, Iāll try to score a win by shorting the pair. Wish me luck, pretty please!
Connecting the pairās most recent highs, we actually see that a falling trend line has materialized. I used the Fibonacci tool and realized that the trend line actually coincides nicely with the 61.8% level and last weekās low around 1.3020. Very tempting, eh?
Fundamentally, I think that there are also a lot of downside risks, especially when you take into account all the things that are going on in the euro zone at the moment.
For one, there has been no request for a bailout by Spain, and thereās nothing to suggest that itās coming soon. This is very disappointing for market participants, which has led to a lot of ārisk offā trades in the last few days.
Also note that yesterdayās PMI readings mostly came in worse-than-expected. PMIs are used to see where the economy is headed, so when they are falling, it also means that the economy is contracting.
Given the technical setup and the current fundamental landscape I have decided to place a sell order on EUR/USD at 1.3020. Here are the complete details of my trade idea:
Sell EUR/USD at 1.3020, SL at 1.3085 (above this weekās high), PT1 at 1.2920 (yesterdayās low), PT2 to be determined. 1% risk. Risk disclosure.
HLHB Trend Catcher
It looks like my HLHB Trend-Catcher 3.0 wasnāt able to mimic its performance from the week before as it produced some negative pips. Hereās a summary of all the signals generated as well as the corresponding results:
- Long at 1.3038. Closed at 1.3046 due to new crossover. +8 pips.
- Short at 1.3046. Closed at 1.3060 due to new crossover. -14 pips.
- Invalid buy signal since RSI was already above 50.0 the candle prior the crossover.
- Sadly an invalid sell signal since RSI was already below 50.0 the candle prior the crossover.
- Invalid buy signal since RSI was below 50.0.
- Invalid sell signal since RSI did not cross 50.0 from above.
- Long at 1.2992. Closed at 1.2961 due to new crossover. -31 pips.
- Short at 1.2961. Closed at 1.2970 when 50-pip trailing stop was hit. -9 pips.
- Long at 1.2974. Closed at 1.2974 when 50-pip trailing stop was hit. Breakeven.
- Short at 1.2972. Closed at 1.2933 when 50-pip trailing stop was hit. +39 pips.
- Long at 1.2937. Closed at 1.2922 due to new crossover. -15 pips.
All in all, the system generated a small 22-pip loss. While it certainly wasnāt a good week, it wasnāt a terrible one either.
Now, on to some good newsā¦
EUR/USD Short
Indeed, good things come to those who wait!
I decided to wait for EUR/USD to pullback to the 61.8% Fib level and test the falling trend line before jumping in on the downtrend. My strategy proved to be a good idea as price soon dropped and hit my first profit target at 1.2920.
The fundamentals also lined up nicely to my trade idea. According to Pip Diddy, renewed concerns about Greece and Spain caused the sell-off in the euro.
I still have half of my position left open and I think Iāll keep it there until I see any catalyst that could potentially shift market sentiment. Donāt worry, Iāve already moved my stop to breakeven!
I hope yāall had a good week too!
XOXO,
Huck