Manually trading SAFT to see if its profitable

[slipshod]

Hi Michael, yes I'm following that thread closely. gg53 made a good suggestion re placing horizontal lines on either side of a consolidation "kill zone" with both the OBV and price and not trading until there's a breakout, even though his example chart would still have whipsawed you badly as the initial up-break was false & the subsequent down-break didn't look much better

Consolidations can provide their own special kind of false break behaviour that is often even more wicked than false breaks of a trendline. The only way of making sense of them that I've seen is using VSA and Richard Wyckoff methods to analyse what's going on, but that's well beyond the scope of SAFT.

[MichaelM]

I don't see what you're seeing... he does mention to trade the breakout of the Gadi_OBV from the horizontal lines... not the PA.

[slipshod]

I read it as both price and OBV, he actually isn't specific, but on his chart he draws horizontal lines on both OBV and price so I assumed that's what he meant.

I've included the chart below with some annotations showing how this method can still leave you open to whipsaws. Had you entered on the first upward break (yellow circles) of both price and OBV, you'd presumably have had your stop below the kill zone - and the later down-spike would have taken it out. If you'd then entered short (second lot of yellow circles) you'd be in danger of the same thing happening in reverse, as the price trendline is under threat and the OBV downtrend already broken.

mod_obv_killing_zone2.gif

I'm not saying his method isn't without its merits, just pointing out that while it saves you trading in the kill zone (once you've identified that the zone exists!) its no guarantee of avoiding losses when breakouts occur.

[slipshod]

... and here's a perfect example from yesterday.

saft_summation.png

There's no way to filter this kind of thing out, it was a strong move that looked for all the world like an upwards reversal out of the sideways consolidation, and turned out to be nothing more than a bull trap.

Happens too often imho for this system to be profitable, and that ends my experiment in trading it. Pity it didn't work out, but them's the breaks (or false breaks). My history trading SAFT, such as it is, can be seen below:-

saft_history.png

It could be said that I traded this at the worst possible time, 2nd half of August with an illiquid market, but I've also used the trade simulator EA to go through a stack of trading from other time periods with similar outcomes. I don't think false breaks are a feature of an illiquid market, rather they're caused by big money deliberately pretending to drive the market one way before a real move in the other direction. This kind of behaviour has been around for over a century, its nothing new I'm afraid...

[slipshod]

Btw if anyone else would like to try trading SAFT & share their results, please feel welcome to use this thread. It could be that the method is highly profitable and I'm just a sucky trader

[gg53]

I read it as both price and OBV, he actually isn't specific, but on his chart he draws horizontal lines on both OBV and price so I assumed that's what he meant.

I've included the chart below with some annotations showing how this method can still leave you open to whipsaws. Had you entered on the first upward break (yellow circles) of both price and OBV, you'd presumably have had your stop below the kill zone - and the later down-spike would have taken it out. If you'd then entered short (second lot of yellow circles) you'd be in danger of the same thing happening in reverse, as the price trendline is under threat and the OBV downtrend already broken.

mod_obv_killing_zone2.gif

I'm not saying his method isn't without its merits, just pointing out that while it saves you trading in the kill zone (once you've identified that the zone exists!) its no guarantee of avoiding losses when breakouts occur.

I'm VERY specific.
Trade the breakout of GADI_OBV !!.
Complete thread is on ForexFactory - "gg53 "Killing Zone".

G.

[gg53]

... and here's a perfect example from yesterday.

saft_summation.png

There's no way to filter this kind of thing out, it was a strong move that looked for all the world like an upwards reversal out of the sideways consolidation, and turned out to be nothing more than a bull trap.

Happens too often imho for this system to be profitable, and that ends my experiment in trading it. Pity it didn't work out, but them's the breaks (or false breaks). My history trading SAFT, such as it is, can be seen below:-

saft_history.png

It could be said that I traded this at the worst possible time, 2nd half of August with an illiquid market, but I've also used the trade simulator EA to go through a stack of trading from other time periods with similar outcomes. I don't think false breaks are a feature of an illiquid market, rather they're caused by big money deliberately pretending to drive the market one way before a real move in the other direction. This kind of behaviour has been around for over a century, its nothing new I'm afraid...

Your "Killing Zone" setup is competly wrong.
Instruction are on FF "gg53 Killing Zone".

G.

[slipshod]

Hi GG, yes I noticed you clarified the rules of the killing zone breakout in later posts - I posted the above off your first post about it in the SAFT thread, my apologies if I got it wrong.

Anyway, this thread isn't about trading that zone, but focuses on specifically on SAFT. If I get interested in running a trial of the killing zone method I'll create a separate thread for it, and make sure I get the rules right

[gg53]

I read it as both price and OBV, he actually isn't specific, but on his chart he draws horizontal lines on both OBV and price so I assumed that's what he meant.

I've included the chart below with some annotations showing how this method can still leave you open to whipsaws. Had you entered on the first upward break (yellow circles) of both price and OBV, you'd presumably have had your stop below the kill zone - and the later down-spike would have taken it out. If you'd then entered short (second lot of yellow circles) you'd be in danger of the same thing happening in reverse, as the price trendline is under threat and the OBV downtrend already broken.

mod_obv_killing_zone2.gif

I'm not saying his method isn't without its merits, just pointing out that while it saves you trading in the kill zone (once you've identified that the zone exists!) its no guarantee of avoiding losses when breakouts occur.

slipshod,

I DON'T trade PA. Only Gadi_OBV breakout.
Almost each breakout on Gadi_OBV occurs BEFORE price close - and I trade them immediatly.
See the post on FF "How to Trade Blindly" and see it in action on post "Let's make a Video".

Initialy I marked the "Killing Zone" on the chart PA in order to show other how to avoid trding in this area - even if they are using other trading methods.
I stopped doing that after understanding that it is confusing.

G.

[slipshod]

For goodness sake, read my latest post. What you're quoting is old, dating from before you went into detail about your killing zone method, and your first post about it was not specific.

Also as I said, your killing zone is not the focus of this thread, SAFT is, and my experiment in trading it did not prove successful. I would not have mentioned your killing zone in this thread if someone else hadn't asked about it. If you want to start a thread here about trading the killing zone in this forum by all means go ahead, but please no more discussion about it here.