HF Systems are a suite of proprietary, short-term trading algorithms developed by Howard Friend CMT 

Unlike many of the so called "expert advisors", "algos" or "trading robots" as they have become fashionably known, HF Systems have been developed, tested and traded over a very long period by a leading market practitioner with over 30 years experience.

HF Systems were initially traded on the spot FX and futures markets for a family office from 2007-2009 producing very impressive results across various asset classes, after which they were employed as a trading signals generator which was the engine of a live systematic trading signals service run for a Swiss bank. Since July 2012, HF Systems have been traded on a proprietary basis and for institutional and high net worth clients under a Swiss asset management license.

Methodology

HF Systems employ “breakout” and “false breakout” (Break and Retrace) methodologies in conjunction with trend and momentum filters. A volatility measure is factored into the position sizes so that as market volatility (as measured by average true range) rises, position sizes decline to reduce “whipsaws”.

 

The breakout systems enter a position as price breaks above (below) a pre-determined resistance (support) level aiming to benefit from follow-through buying (selling) while the false breakout systems enter a position after the identification of a potential market “trap”. Both system types are traded over the intraday and multiday timeframes with the initial stop loss for a long (short) position usually being placed just below (above) the previous or current session’s low (high) and adjusted in the direction of the trade over the course of the day to further limit risk.

 

Intraday systems

The intraday systems are day trade systems which aim to identify an emerging trend for the day with a view to entering a position in its direction and holding until the “close”. Sub-categories of intraday systems include “BCN” and “DT” which have different underlying trend, momentum and volatility characteristics. The DT systems may enter one or two trades a day per market, while BCN may enter only one trade a day per market.

COPPER BCN SYSTEM

GOLD DAY TRADER SYSTEM

Multiday systems

The multiday systems employ various entry rules, some based on breakout and some on false breakout methodologies, but only one trade entry is allowed per day per system. As the multiday systems may hold a position for up to five trading days, a proprietary trend filter is used to ensure that most of the trades are entered in the direction of the trend as defined by the trend filter.

 

While the multiday systems employ various inputs from the daily price charts, each trade is actually managed on the intraday charts (data1 and data2) which ensures that all system trades are executed in real time and are not based on end of day data which can give a false impression of the risk/reward profile of the system.      

EUR/JPY MD SYSTEM

EUR/USD MD SYSTEM

While each system works well on a stand alone basis, the best results can be obtained by trading a selection of systems as a portfolio. HF Systems can be viewed in real time via the HF Systems Model Trading Portfolio, a subscription-based service offered to professional market participants who require access to an additional, proven source of alpha.

For further details, email hmfsystems@gmail.com