Hey friends! The end of another trading quarter means another chance to review the HLHB’s performance!
Tbh, the results were weak across the board with losses, losing streaks, and higher average losses seen in the major dollar pairs.
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 last three months:
There were actually tons of trending opportunities from July to the end of September as EUR/USD flirted with the 1.1900 resistance and tested and then broken below the big 1.1700 support.
Unfortunately, a few key fakeouts in the last weeks of September dragged the HLHB’s performance on EUR/USD. Heck, the last two trades make up 54% of all the system’s losses on the pair!
After 15 valid signals, the HLHB lost a whopping 485 pips (-1.62%) on EUR/USD. Ouch!
Cable didn’t trend as much as EUR/USD did from July to September but we did see a few legit intraweek trends from the pair.
The HLHB still didn’t fare much better, though, thanks to the last two trades pretty much erasing the system’s gains for GBP/USD.
The average losses almost doubling against the average gains likely contributed to the HLHB capping Q3 126 pips (-0.42%) in the red.
You know when someone tries to swim by throwing limbs around and ends up making a lot of noise and not a lot of distance covered?
That’s how I feel about the HLHB’s performance on USD/JPY. Sure there were 20 valid signals and a 65% win rate.
But if the average losses are more than double the average wins, it’s not surprising that the HLHB still lost 68 pips (-0.23%) from all the effort this quarter.
USD/JPY did see more ranges than EUR/USD or GBP/USD so there were fewer opportunities for wins. The results are still not a good look though.
That’s it for Q3’s update!
One big thing I’ve noticed about this quarter’s results is that the HLHB can still lose pips even when the majors present big intraweek trends.
It’s possible that the EMA crossover filter is also throwing tons of fakeouts especially in an environment where tight ranges are followed by bursts of volatile one-directional moves.
Do you think there’s a better filter than using 5 EMA and 10 EMA? What do you usually use to filter your trend signals?
I think it may be time to explore other filters and/or entry and exit strategies to maximize the dollar’s moves in the next couple of months…