Hello, forex friends!
As you may notice from my feed, I’m trying to look at possible ways to tweak the HLHB System’s parameters from 2016 so that I could get the same fantastic results without having to log in bajillions of signals.
READ: HLHB System’s original parameters
Experiment #3
I think I’m on to something here.
In my first tweak, I used the same SMA and RSI settings but applied them on the 4-hour time frame instead of the 1-hour charts. I also extended my stop loss limits and profit targets. They ended up being profitable, but the 18-month backtest profits were waaaaay lower than 2016 results.
READ: HLHB System tweak #1 backtest results
My second tweak was a little bit better. I basically just added an ADX (14) filter to my tweak #1 rules. Win rates and average pips per win shot up, but were still short of the overall gains that we saw in 2016.
READ: HLHB System tweak #2 backtest results
This time around, I’m looking to ease my ADX filter a little. See, I only traded signals that had ADX > 25 and noticed that there were one or two (or twenty) invalidated signals that would’ve yielded serious moolah. In addition, I also read that some traders are comfortable using lower ADX filters, thinking that the ADX hitting 20 or 25 might be too late for a trend catcher.
So, next week I’ll be using tweak #2 with a lower ADX filter in my backtest. As usual, I’ll be doing covering 18 months (6 trading quarters) from Q3 2015 to Q4 2016.
Wish me luck!
USD/JPY’s Backtest Results
Thank goodness for trend-catching fans out there!
As some of you have mentioned, I have yet to post USD/JPY’s backtest results for my previous tweaks. After all, I have pinky sworn to add the major dollar pair to my HLHB ways this year.
This one’s for you, friends!
Unlike in EUR/USD and GBP/USD, USD/JPY’s results actually plummeted when I added the ADX (14). Sure, signals were halved and average pips per winning trade inched higher, but profits barely hit 26% of the first tweak. Heck, even win rate suffered!
One possible explanation is that there were a lot of legit trends during the period that got filtered out by the ADX filter. One more reason to relax my ADX requirements, don’t you think?
See also:
My Q4 2016 Forex Trade Review and Reflections
HLHB System’s 2016 Performance Summary
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