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The gg53 "Killing Zone"

  • #81
  • Sep 1, 2012 11:09am Sep 1, 2012 11:09am
Quoting gg53
reachjj,

How did you come to that conclusion?

G.


Well he came to that conclusion cause according to your charts if you buy when the bar close or the value of the OBV closes on that timeframe(if you trade without charts) then after that bar or value of OBV closed it was all downhill......

I have understood your concept of the breakout of the range.....but on those charts....its a loss

Please correct me if I am wrong...please show me where is the profit.....cause according to the charts you posted that is what it is....

Pipaholic
  • #82
  • Sep 1, 2012 11:23am Sep 1, 2012 11:23am
By the way so there won't be no misunderstandings.....

I really like your concept and indicator, I find the indicator really valuable....

It is just that particular trade that I can't see.....profit....

Pipaholic
  • #83
  • Sep 1, 2012 11:43am Sep 1, 2012 11:43am
Quoting 4xPIPAHOLIC
Well he came to that conclusion cause according to your charts if you buy when the bar close or the value of the OBV closes on that timeframe(if you trade without charts) then after that bar or value of OBV closed it was all downhill......

I have understood your concept of the breakout of the range.....but on those charts....its a loss

Please correct me if I am wrong...please show me where is the profit.....cause according to the charts you posted that is what it is....

Pipaholic
Pipaholic,

Look at the chart and explanation again...
There is no OR...
BUY if Gadi_OBV > .... (volume - marked on the right of indi window.)

Also, there is no close - ignore the chart and trade the value.

See post:
http://www.forexfactory.com/showthread.php?p=5976932#post5976932
that's same chart on M1 pointing the Price breakout.
The volume breakout happened even before that - resulting in +17 pips.

I think that we more than covered this subject.

G.
  • #84
  • Edited Sep 2, 2012 6:52am Sep 1, 2012 11:48am | Edited Sep 2, 2012 6:52am
Quoting 4xPIPAHOLIC
By the way so there won't be no misunderstandings.....

I really like your concept and indicator, I find the indicator really valuable....

It is just that particular trade that I can't see.....profit....

Pipaholic
Pipaholic,

I think that most of you are so acustomed to BARS, Close, and charts that you can't see that I'm not using it for trading.
I use it only to draw the killing zone - and after that you can hide the chart.

See the "Let's Trade Blindly" post.
just one simple rule - buy if volume > xxx.

G.
  • #85
  • Sep 1, 2012 11:49am Sep 1, 2012 11:49am
Quoting gg53
Pipaholic,

Look at the chart and explanation again...
There is no OR...
BUY if Gadi_OBV > .... (volume - marked on the right of indi window.)

Also, there is no close - ignore the chart and trade the value.

See post:
http://www.forexfactory.com/showthread.php?p=5976932#post5976932
that's same chart on M1 pointing the Price breakout.
The volume breakout happened even before that - resulting in +17 pips.

I think that we more than covered this subject.

G.

Ok there is a misunderstanding.....I am not talking about this one.....I am taking about the USDCHF witch is on the 1 hour time frame.....on post #70....
  • #86
  • Sep 1, 2012 11:52am Sep 1, 2012 11:52am
Quoting gg53
Pipaholic,

I think that most of you are so acustomed to BARS, Close, and chrts that you can see that I'm not using it for trading.
I use it only to draw the killing zone - and after that you can hide the chart.

See the "Let's Trade Blindly" post.
just one simple rule - buy if volume > xxx.

G.

I am not talking about the chart......I am talking about the OBV value......do you wait when that value closes outside the channel before you take the trade.......cause if your answer is YES then it is a loosing trade....on post #70....
  • #87
  • Sep 1, 2012 12:07pm Sep 1, 2012 12:07pm
Quoting 4xPIPAHOLIC
I am not talking about the chart......I am talking about the OBV value......do you wait when that value closes outside the channel before you take the trade.......cause if your answer is YES then it is a loosing trade....on post #70....
He's indicated he does not wait for a close before entering. He enters as soon as he sees the OBV exceed a certain value.

The problem with that is there will be many entry signals that cannot be seen looking back on a chart. It has to be forward tested.
  • #88
  • Sep 1, 2012 12:17pm Sep 1, 2012 12:17pm
Quoting billbss
He's indicated he does not wait for a close before entering. He enters as soon as he sees the OBV exceed a certain value.

The problem with that is there will be many entry signals that cannot be seen looking back on a chart. It has to be forward tested.

THANK YOU very much billbss

And the other question now is......are there a lot of false breakout signals when you do not wait for that value to close outside the channel?
or does the OBV value contract enough ....meaning back into the channel once it breaks out?
  • #89
  • Sep 1, 2012 12:32pm Sep 1, 2012 12:32pm
Quoting 4xPIPAHOLIC
THANK YOU very much billbss

And the other question now is......are there a lot of false breakout signals when you do not wait for that value to close outside the channel?
or does the OBV value contract enough ....meaning back into the channel once it breaks out?
I'm sure it would, although I have not watched the indicator in real time.

I suspect a completed bar with a long wick had signaled a false breakout, then the OBV had retreated back into the channel.

Maybe gg53 can correct me.
  • #90
  • Sep 1, 2012 12:34pm Sep 1, 2012 12:34pm
Quoting 4xPIPAHOLIC
I am not talking about the chart......I am talking about the OBV value......do you wait when that value closes outside the channel before you take the trade.......cause if your answer is YES then it is a loosing trade....on post #70....
4xPIPAHOLIC,

I don't wait. see the rule:
BUY if Gadi_OBV > xxx (volume).

There is no "close" or wait condition.

There is a reason for that.
If I wait for something - the whole concept is worthless.

The idea is simple - the market is in some kind of equilibrium for sometime now (remember the 6 alternating bar rule?).

The breakout is a signal that here comes something that changes the equilibrium. I'm sure that this will "jump" the price. why wait?
If you need confirmation - than you don't believe that equilibrium break will change the price - and we can all close this forum and go home

BTW:
I think that most of you are puzzled by the fact that such small, tiny breakout can yield profit. You are forgetting that this is a signal of game-change. A new player enter the market and rock the boat.
Unlike Price Action - even tiny breakouts are a game-changers.

G.
  • #91
  • Sep 1, 2012 12:37pm Sep 1, 2012 12:37pm
Quoting billbss
He's indicated he does not wait for a close before entering. He enters as soon as he sees the OBV exceed a certain value.

The problem with that is there will be many entry signals that cannot be seen looking back on a chart. It has to be forward tested.
billbss,

You are right.
Once we have the indicator that draws the automatic lines - we can back test this.

G.
  • #92
  • Edited Sep 2, 2012 6:40am Sep 1, 2012 12:45pm | Edited Sep 2, 2012 6:40am
Quoting billbss
I'm sure it would, although I have not watched the indicator in real time.

I suspect a completed bar with a long wick had signaled a false breakout, then the OBV had retreated back into the channel.

Maybe gg53 can correct me.
billbss & Pipaholc,

My technique for this is simple (mentioned in several posts):
BUY if Gadi_OBV > xxx +10 (volume).
Where [10] is some small number - need to optimize this when we get the auto-lines indi.

Even with such a small number there are very very few "false signals".
As to profit - most of the losses are not because of false signal - but poor money management.

Our system - based on this - is VERY profitale.

G.
  • #93
  • Sep 1, 2012 12:56pm Sep 1, 2012 12:56pm
I have a few questions about the basic rules:

1. Does the "big move" candle have to be in the opposite direction from it's previous candle?

2. Lets say the big move candle is a bear candle and is followed by two more bear candles, does that eliminate the possibility of a Kill Zone being established?

3. You only trade beginning with the London open. Can the KZ be formed prior to that time? Do you mean you only take breakouts after the London open?

4. When do you stop taking breakouts from a particular KZ? I know you stop after at least one breakout from each side. What if that does not occur for a couple of days? Is there a time limit on how long a KZ is valid?

Thank you.
  • #94
  • Sep 1, 2012 1:07pm Sep 1, 2012 1:07pm
Quoting billbss
I have a few questions about the basic rules:

1. Does the "big move" candle have to be in the opposite direction from it's previous candle?

2. Lets say the big move candle is a bear candle and is followed by two more bear candles, does that eliminate the possibility of a Kill Zone being established?

3. You only trade beginning with the London open. Can the KZ be formed prior to that time? Do you mean you only take breakouts after the London open?

4. When do you stop taking breakouts from a particular KZ? I know you stop after at least...
billbss,

1. No.

2. Yes - 3 consecutive candles = End. Wait for next setup.

3. Yes. I don't care when it formed. I that regard I'm only trading London open till London close +2.
But this rule has nothing to do with KZ. Just personal preferences that apply to all my trades.

4. The KZ is valid as long as it not ended by the known rule.
If you look at the "How to Rob a Swiss Bank" - it's weeks...
I have a Buy-Stop and Sell-Stop orders that grew beard there...

I trade every breakout, even if its on the same direction - unless I have an already open position there.

In any case don't trade the same breakout if you where stopped and you think that there is more potential.


Glad to help.

G.
  • #95
  • Sep 1, 2012 3:55pm Sep 1, 2012 3:55pm
Quoting gg53
4xPIPAHOLIC,

I don't wait. see the rule:
BUY if Gadi_OBV > xxx (volume).

There is no "close" or wait condition.

There is a reason for that.
If I wait for something - the whole concept is worthless.

The idea is simple - the market is in some kind of equilibrium for sometime now (remember the 6 alternating bar rule?).

The breakout is a signal that here comes something that changes the equilibrium. I'm sure that this will "jump" the price. why wait?
If you need confirmation - than you don't believe that equilibrium break...
Yes,Yes I agree with you on this.....know I understand what you are looking for........the acceleration of the volume compared to the last 6 bar volume average .....witch we will see that on the OBV........if I understand correct....
  • #96
  • Sep 1, 2012 4:51pm Sep 1, 2012 4:51pm
Quoting 4xPIPAHOLIC
Yes,Yes I agree with you on this.....know I understand what you are looking for........the acceleration of the volume compared to the last 6 bar volume average .....witch we will see that on the OBV........if I understand correct....
Yep.

G.
  • #97
  • Sep 1, 2012 5:41pm Sep 1, 2012 5:41pm
It appears to me that while automatic kz lines and ea's seem to be on the cards, they are unnecessary for this system. It only took a fairly basic explanation from a couple of posts for me to see the value in this methodology and not really require further explanations from gg.

From my fairly small level of experience with this indicator/setup it appears to me that you can improve your hit rate and size of winning trades by being a little bit more selective in what you are looking for in relation to the obv breakout. For example - if you look for longer consolidation periods in price - you should find the subsequent breakout to be a really nice move - rather than just looking for relatively small 'kill-zones'.

Thanks for the system/methodology gg- but who needs an ea or automatically drawn KZ's when an edge is this good!!
Enter Signature
  • #98
  • Sep 1, 2012 10:59pm Sep 1, 2012 10:59pm
Is this really trading volume? Put an RSI (10) indicator on the chart under the Gadi OBV, and there is not that much difference from RSI to the OBV indicator. Indicator looks a lot more like price than volume.
  • #99
  • Edited 3:06am Sep 2, 2012 2:32am | Edited 3:06am
Quoting BlackStack
Is this really trading volume? Put an RSI (10) indicator on the chart under the Gadi OBV, and there is not that much difference from RSI to the OBV indicator. Indicator looks a lot more like price than volume.

RSI and OBV in many cases look very similar - but each have different components which create the indicator.

The RSI uses closing prices (up or down) and the difference between the last closing price.

The obv uses closing prices (up or down) and the difference between the volume on the previous price bars.

If volume isn't increasing then we are likely to get a breakout in price but not in OBV - and the move is unlikely to be sustained.

Another limitation to RSI is that it is within a range of 0 - 100 - so as you can see in the picture - almost as soon as RSI breaks out from its previous range - it hits a ceiling and starts diverging from price.

The main principle behind this methodology is that volume leads price. The bottom line is that RSI has nothing to do with volume.
Attached Image (click to enlarge)
Click to Enlarge Name: rsi v obv1.gif Size: 62 KB
Enter Signature
  • #100
  • Sep 2, 2012 2:54am Sep 2, 2012 2:54am
G.

One last try!

The thing that I do not understand is when you change the levels of the OBV zone. (after the first 6 bars).

Can you please explain under what conditions you change the OBV zone levels.
Do these changes relate in any way to whether or not you have a trade open?

(attachment from your example).

M.
Attached Image (click to enlarge)
Click to Enlarge Name: KZ ex.jpg Size: 167 KB
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