This week, market sentiment toward the dollar was similar to what I feel for the immature children – I hate them! The greenback sell-off in all areas, particularly against the euro and pound.
The only currency that the dollar was able to win was against the yen … that’s not really saying much since the yen has lost practically all of the coins out there too.
Why did this happen?
I think it’s due to the fact that inflation in Europe and the United Kingdom has experienced inflation above central banks in their respective goals! When inflation rises, central banks typically respond by the types of funds, which is bullish for the currency. A news report I read also said that the European Central Bank (ECB) is expected to rates at its next meeting.
In other news, I’ve been getting many comments on my HLHB system. Some of you think that might be more profitable if I can make some modifications. And I agree … So for the next week or so I will backtest the new rules of my system HLHB.
Go with what one of my readers suggested in a previous post of my, here are the changes they plan to do on my system HLHB:
1. Tickets are still based on moving average crossovers. But this time, I want to generate more signals HLHB, so I’ll change my SMA 5 and 21.
2. Replace the Stochastic RSI. I know that the oscillators are like two drops of water, but I will not pay attention to prices that are oversold and overbought. Instead, I use the RSI to confirm a trend.
3. If the RSI is above 50, that means the couple is in an uptrend and should go long. On the other hand, if the RSI is below 50, I take that as a sign that the market is in a downtrend and use that as a confirmation to go short.
4. I keep my filter, but instead of 30 pips, I will be reduced to just 20. So if there is a crossing higher and RSI is above 50, my order will be set 20 pips above the high of the candle beam.
I have also decided to include the three candles of success after the intersection instead of one. Why three? Well, that’s what my 20-pip filter may cover both European and U.S. sessions. Looking back, I realized that I missed a few transactions because of the trend during the U.S. session not maintained in the Asian session due to lack of volatility.
Here are some sample configurations:
The first was a valid configuration to go as long as there was an upward crossing and the RSI was above 50. My entry would have been started just after the crossing of the candle after closed 20 pips above the high of the candle beam. The second also meets my requirements for entry, but it would have been for a short operation.
On the other hand, the last settings you have made void the next three candles after the crossing was not more than 20 pips above the candle.
As for the rules of my departure, I think I’ll keep them as they are. My stop will be set 10 pips below / above the low / high of the candle before crossing the candle and I capped my stop about 150 pips. So I’ll go with whichever is less.
Okay, that’s all. So for the next week or so, I’ll be busy backtesting HLHB the new system. If it shows promise, to pass the test. If not, then I will return to the original HLHB.