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Thursday, June 4, 2015

HLHB Forex Trend-Catcher System EA

This is a Forex system created by Huck from, whose trades she updates every week. As BabyPips has hundreds of thousands of readers from all over the world I thought it would be a good idea to fully automate this system and quickly back test it to see what it gives.

The rules:
The system is explained here

These are the rules:

Entry Rules
BUY when the 5 EMA crosses above the 10 EMA from underneath and the RSI crosses above the 50.0 mark from the bottom.

Sell when the 5 EMA crosses below the 10 EMA from the top and the RSI crosses below the 50.0 mark from the top.

Make sure that the RSI did cross 50.0 from the top or bottom and not just ranging tightly around the level.

Exit Rules
Use a 50-pip trailing stop and a 200-pip profit target.

Here is a sample valid Buy signal:

Sadly, this system does not seem to have a positive edge, and results are frankly mediocre in all the currency pairs. Here is the EURUSD for example during 2014. A $10,000 account playing 0.1 lots per trade:

The equity curve seems to be going nowhere, just up and down with no clear edge in almost 400 trades.

I did my best to implement the system exactly as described, including the Trailing Stop and everything. But there's always a chance that I may have missed something, so I'm sharing the source code in case somebody is interested in inspecting it.

BabyPips is a huge site. According to Alexa it is ranked 15966 in the world in terms of traffic among 30 million websites as of this writing. That rank folks is huge. Hundreds of thousands of newbie Forex traders look at this site for reference everyday and it is a pity that a system like this one is published and followed as viable. It would have been perhaps wise to do a quick back test and check if there was in fact some merit in the ideas behind this strategy.

Download HLHB Trend Catcher EA

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An expectancy analysis of Regular MACD Divergences for the EURUSD currency pair

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  1. Hi LT. Enjoyed your Options course. I'be been toying with a system over the last month, but would like to some more extensive testing. Unfortunately my programming skills are average at best (though still learning). I was wondering if you'd consider helping out. Kind Regards, Steve McMahon.

    1. Hello Steve,

      Glad to hear about the Options Course. If you ever have any question, please send them my way.

      When you talk about your system, are you talking about a Forex system or an Options system?

      My ability with the ThinkScript language, is pretty basic (I think that's what they call the ThinkOrSwim language), so I would need time to study and pick it up. But sure, I can provide you with my opinion if you want.

      Thanks for dropping by Steve.

    2. Hi Henrick. Thanks for your reply.

      The system is Forex. I live in New Zealand and have had some success trading EUR during Asia session. However, the system is prone to the odd "lively" drawdown & I was hoping to do some further backtesting.

      I've also been trading Options over the last year (which is what led me to your site) and would benefit from having a general discussion with you about the Option strategies I'm trading.

      Would it be Okay to take this discussion to email? My gmail is


    3. Sure Steve. Feel free to email me on your free time at