Hey, guys! I’ve finally finished backtesting my latest tweaks on the HLHB Trend-Catcher System!
As I mentioned last week, I’m making changes to the Huck Loves Her Bucks (HLHB) system to find a more sustainable pace for tracking its signals.
For those who just tuned in, know that the HLHB System is simply a mechanical system that uses EMAs and an RSI filter to catch trends.
You BUY when the 5 EMA crosses above the 10 EMA and the RSI crosses above the 50.00 mark. Or,
You SELL when the 5 EMA crosses below the 10 EMA and the RSI crosses below 50.00. I also use a 50-pip trailing stop and a 200-pip profit target for my exits.
Pretty simple, right?
I know I said that I would keep the original rules and only switch up the time frames this week, but I found out (the hard way) that using 50-pip stops on 4-hour charts is just asking for a margin call. Ditto for using 100-pip trailing stops.
So, after three batches of backtests, I have found that using a 150-pip trailing stop and a 400-pip profit target will at least yield profits.
Here are the deets from backtesting the last 18 months:
As you can see, the tweaks did their job at significantly reducing the number of signals (take note that I’m comparing 18-month backtest vs. the 12-month performance of the previous parameters).
Another thing that I liked is that the average wins are still more than twice the size of losses throughout the period. Last but not the least, win rates have gone up thanks to a wider trailing stop that made enough room for medium-term volatility.
What I’m not a fan of is the % profits, which sucks since it’s also the most important part. I’ve only gained +0.39% on EUR/USD against the 5.88% increase in 2016, while GBP/USD’s wins dropped from 13.19% to 6.34%.
I also noticed that the tweaked version of the HLHB still caught A LOT of fakeouts and missed out on some pretty solid trends.
For now, it looks like the search isn’t over for a set of tweaks that would make the HLHB system more sustainable while still retaining its profitability.
Got any ideas on what I can change? Maybe something that could help out with the fakeouts?
See also:
My Q4 2016 Forex Trade Review and Reflections
HLHB System’s 2016 Performance Summary
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