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The gg53 "Killing Zone"

  • #101
  • Sep 2, 2012 4:17am Sep 2, 2012 4:17am
Quoting Sarythsaya
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...

Sarythsaya,

In betwwen your lines you will find the answer why we need an automatic lines indicator.

We need this "Auto-Lines" indicator with external parameters in order to find what is optimal the size of a "Big Move", how many alternating bars qualify as a good "Killing Zone", etc.
We need an EA to BackTest the "Auto-Lines" for different market situations.
After that - Yes, we will not need it anymore...

G.
  • #102
  • Edited 5:18am Sep 2, 2012 4:22am | Edited 5:18am
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.
BlackStack,

Believe me, there is no price in the Gadi_OBV and no MA of any kind.
I klnow, I wrote it...

I'm strongly against any kind of MA's in trading - but that's a whole seperate chapter in itself.

G.
  • #103
  • Sep 2, 2012 4:25am Sep 2, 2012 4:25am
Quoting Sarythsaya
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 -...
Sarythsaya,

Hey, you are better explainer than me !!

G.
  • #104
  • Edited 4:45am Sep 2, 2012 4:34am | Edited 4:45am
Quoting futurespec
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.
M,

Bars continue to be created after the initial 6 (?) as time goes by.
If any of those bars create a new VOLUME HIGH or VOLUME LOW - Than we draw a new line when the bar is closed.
Since it created a new VOLUME High/Low, in most cases BEFORE the bar was closed - by definition we are in a trade already.
The new Volume High/Low doesn't affect the open trade - only MM affect it after it was open.

You can see on the chart that there was a VOLUME (Gadi_OBV) breakout just before bar #10 was closed - so the H1/L1 boundries was still valid - and its breakout is a BUY signal.


G.
  • #105
  • Sep 2, 2012 5:11am Sep 2, 2012 5:11am
Quoting futurespec
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.
M,

Let's make a video...

Use the chart from this post (enlarge the chart):
http://www.forexfactory.com/showthread.php?p=5976892#post5976892

Put a big piece of paper to cover the whole right side of your screen after bar #6.
Move the paper very slowly to the right and watch only the Gadi_OBV and it's "Killing Zone" (H1/L1 boundries).
Just after bar #9 and before bar #10 - you will see an H1 BREAKOUT.
That's a BUY signal - and we trade it immediatly.
Continue moving slowly - and you will see bar #10 close and a new VOLUME high on Gadi_OBV is formed.
Now you draw the H2 - (and yes, we are still in a trade if the MM didn't stopped it).

G.
  • #106
  • Edited 6:43am Sep 2, 2012 6:19am | Edited 6:43am
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.
BlackStack,

RSI is indeed a very good indicator.
And yes, they look very similiar on the chart.

Good observation !!
Just another confirmation of the validity of Gadi_OBV...


The differences:

RSI uses "Price" - and price movement is a RESULT of VOLUME.
RSI uses "Moving Average" - therefor it's lagging.
RSI value is valid only AFTER the bar is closed.

Gadi_OBV uses VOLUME numbers that CAUSES price to move.
Gadi_OBV uses pure market numbers, without any MA's.
Gadi_OBV value is valid at any given time - even BEFORE bar close.
Gadi_OBV is more sensitive than RSI (see attached chart)

G.
Attached Image (click to enlarge)
Click to Enlarge Name: rsi_gadi_obv.gif Size: 23 KB
  • #107
  • Sep 2, 2012 6:29am Sep 2, 2012 6:29am
Quoting gg53
BlackStack,

RSI is indeed a very good indicator.
And yes, they look very similiar on the chart.

Good observation !!
Just another confirmation of the validity of Gadi_OBV...


The differences:

RSI uses "Price" - and price movement is a RESULT of VOLUME.
RSI uses "Moving Average" - therefor it's lagging.
RSI value is valid only AFTER the bar is closed.

Gadi_OBV uses VOLUME numbers that CAUSES price to move.
Gadi_OBV uses pure market numbers, without any MA's.
Gadi_OBV value is valid at any given time - even BEFORE bar close.
Gadi_OBV...
Hi...sorry 4 my english...i'm italian
this obv is normal or modificate?
Good system..
  • #108
  • Sep 2, 2012 6:32am Sep 2, 2012 6:32am
Quoting Tom Joad
Hi...sorry 4 my english...i'm italian
this obv is normal or modificate?
Good system..
Hello Italy !

It's modified OBV.
Indicator is on post #1.

G.
  • #109
  • Sep 2, 2012 6:41am Sep 2, 2012 6:41am
Quoting gg53
Hello Italy !

It's modified OBV.
Indicator is on post #1.

G.
thanks!!! I am looking at this system on the bund on 30'... it seems fantastic
I have Fastbrokers and the oscillator modificate is possible only in easy language...now i see your post n1
Thankyou very mach
  • #110
  • Sep 2, 2012 6:48am Sep 2, 2012 6:48am
Quoting Tom Joad
thanks!!! I am looking at this system on the bund on 30'... it seems fantastic
I have Fastbrokers and the oscillator modificate is possible only in easy language...now i see your post n1
Thankyou very mach
The credit goes to jusiur
http://www.forexfactory.com/jusiur

It's his Forum/Thread.
I'm only a guest here.

G.
  • #111
  • Sep 2, 2012 6:50am Sep 2, 2012 6:50am
Quoting gg53
The credit goes to jusiur
http://www.forexfactory.com/jusiur

It's his Forum/Thread.
I'm only a guest here.

G.
Thanks
  • #112
  • Sep 2, 2012 6:55am Sep 2, 2012 6:55am
What time frame is correct for this system?
Sorry..i see the pdf but my english is a disaster...
  • #113
  • Edited 7:23am Sep 2, 2012 7:12am | Edited 7:23am
Quoting Tom Joad
What time frame is correct for this system?
Sorry..i see the pdf but my english is a disaster...
Gadi_OBV is valid in any TimeFrame.
The only consideration when choosing a Time Frame is wether or not I'm going to profit.

Somewhere in this forum I posted an M1 test result (can't find it right now).

The "test" shows that I made 4 pips "profit" in 1 Min.
Was Gadi_OBV accurate? Yes.

"Profit" ?!?! NO !! if you take into account the broker fees and the fact that you are not able to exit at the lowest point - this kind of trade will result in a LOSS.

I'll try to discuss the Time Frame issue in a separate post - but it's not related to Gadi_OBV accuracy.
Choosing the "right" Time Frame is where you feel confortable - taking into consideration the broker fees, SL/TP ratio, and the draw-down that you are willing to "suffer".

Again, I'll discuss this in a separate post.

G.

EDIT:
Found the M1 test on post #48:
http://www.forexfactory.com/showthread.php?p=5976253#post5976253
  • #114
  • Sep 2, 2012 7:21am Sep 2, 2012 7:21am
Quoting gg53
Gadi_OBV is valid in any TimeFrame.
The only consideration when choosing a Time Frame is wether or not I'm going to profit.

Somewhere in this forum I posted an M1 test result (can't find it right now).

The "test" shows that I made 4 pips "profit" in 1 Min.
"Profit" ?!?! NO !! if you take into account the broker fees and the fact that you are not able to exit at the lowest point - this kind of trade will result in a LOSS.

I'll try to discuss the Time Frame issue in a separate post - but it's not related to Gadi_OBV.
Choosing the "right"...
Thanks ...for disponibility and humility
  • #115
  • Sep 2, 2012 7:46am Sep 2, 2012 7:46am
what should be the exit strategy, nothing has been discussed abt it ?

Quoting gg53
Gadi_OBV is valid in any TimeFrame.
The only consideration when choosing a Time Frame is wether or not I'm going to profit.

Somewhere in this forum I posted an M1 test result (can't find it right now).

The "test" shows that I made 4 pips "profit" in 1 Min.
Was Gadi_OBV accurate? Yes.

"Profit" ?!?! NO !! if you take into account the broker fees and the fact that you are not able to exit at the lowest point - this kind of trade will result in a LOSS.

I'll try to discuss the Time Frame issue in a separate post - but it's not...
  • #116
  • Sep 2, 2012 8:43am Sep 2, 2012 8:43am
As already mentioned before - I want to make this forum a productive one.
A few days after concept introduction and more than a 100 Q&A and FAQ's - It's time to get to work.

Targets:

1. Build an indicator that will automatically draw the vertical and horizontal lines on Gadi_Obv of the "Killing Zone" start.
Need to be with EXTERNAL parameters:

a. "Big Move" identificatio as multiplication of previous bar (decimal, default 2)
b. Number of MINIMAL consecutive altrnating (Up/Down) that follows the "Big Move" (int, default 6)
[N-1] of Up/Up or Down/Down is Ok.
c. Number of consecutive Up or Down (N) that signals "Killing Zone" end. (int, N, default 3).
d. continuously update the horizontal lines AFTER bar close and new high/low is created.
e. Delete the "Killing Zone" lines after "End" signal.

2. Test (all of us) the indicator and point out bugs, and suggest different setting.

3. Write a simple EA that trade the above combined indicators for BackTesting - not looking for "profit" - but for extreme cases that will need our attention.

4. New Chapter - How to trade in-trend with Volume.
We'll start the indicator/EA process again after coherent explantion and your suggestions.

5. New Chapter - How to choose WHAT pairs to trade - Currency strength, Currency Correlations.
Here we go again...

6. New Chapter - Time Frame - general discussion and formulation.

Anyone for the ride? Volunteers for indicators coding?

G.
  • #117
  • Sep 2, 2012 8:46am Sep 2, 2012 8:46am
gg,

I still have a couple of questions:

1. The three consecutive bar rule- Lets say the big move bar is the third consecutive bull bar. Do you forget it and look for another set up?
Since the KZ does not begin until the bar after the big move, do we care about the candle pattern leading up to it?

2. If we're waiting for a KZ to form after a big move and another big move occurs, do we forget the first one and concentrate on the second one? This happens a lot.

Thanks
  • #118
  • Sep 2, 2012 8:53am Sep 2, 2012 8:53am
Quoting jusiur
This thread is dedicated to the concept of "killing zone" kindly shared by gg53. Welcome all.
Thanks gg for the concept, and Jusiur for starting this thread.
To help visualise the killing zone better, have put together an indicator to:
1. Identify Last Big Move - Red Arrows. It Uses a Factor(1.5) times ATR14.
2. Consecutive bars for Resetting the Killing Zone.
Pink Arrows-Bearish
Aqua Arrows- Bullish

However, looking at the chart, it might be possible to ignore some consecutive bars that fall within the range of the initial 6-7 bar killing zone.
EP
Attached Image (click to enlarge)
Click to Enlarge Name: eu19.jpg Size: 160 KB
  • #119
  • Sep 2, 2012 8:59am Sep 2, 2012 8:59am
Quoting billbss
gg,

I still have a couple of questions:

1. The three consecutive bar rule- Lets say the big move bar is the third consecutive bull bar. Do you forget it and look for another set up?
Since the KZ does not begin until the bar after the big move, do we care about the candle pattern leading up to it?

2. If we're waiting for a KZ to form after a big move and another big move occurs, do we forget the first one and concentrate on the second one? This happens a lot.

Thanks

billbss,

1. If the bar is x times bigger than its previous one - that's the first condition. I don't care what happend before that.
BUT - it's NOT a start signal unless it is followed by (6?) consecutive up/down/up/down.

2. Yes. In this case we are in a trade (breakout occured before bar close) - but the "Killing Zone" is no longer valid. You let the MM to handle the open trade.

G.

EDIT:
Oooops, misunderstood your No.2 question.

The correct answer is:
2. NO !!!. you just update the "Killing Zone" to new high/low levels after that bar close.
In this case we are in a trade (breakout occured before bar close) - but the "Killing Zone" is changed. You let the MM to handle the open trade.


Sorry...
  • #120
  • Sep 2, 2012 9:43am Sep 2, 2012 9:43am
Quoting EaglePip
Thanks gg for the concept, and Jusiur for starting this thread.
To help visualise the killing zone better, have put together an indicator to:
1. Identify Last Big Move - Red Arrows. It Uses a Factor(1.5) times ATR14.
2. Consecutive bars for Resetting the Killing Zone.
Pink Arrows-Bearish
Aqua Arrows- Bullish

However, looking at the chart, it might be possible to ignore some consecutive bars that fall within the range of the initial 6-7 bar killing zone.
EP
Quote
However, looking at the chart, it might be possible to ignore some consecutive bars that fall within the range of the initial 6-7 bar killing zone.
EP

EP,

That's what we are doing - after initial setup (6? consecutive bars) we trade the breakout of "Killing Zone".
the "Killing Zone" remains active and valid untill the "End" signal.

Or maybe I didn't understand your "ignore" term?

G.
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