The Kill Zone Asian Breakout

[Dewey McG]

Thanks for sharing, Dewey. Sure wish more of these strategies worked in US time. London open to close+2 is 1am - 11am for me. That's pretty tough, even if I didn't have to work for a living.

I don't suppose GG53 shares the source for his indicators? I hate using black-box "magic" indicators. I want to look at the code and understand what they're doing, and maybe modify them for my own use.

garyfritz,

Gadi_OBV "channel breakout" strategy is for ANY area of consolidation, not just the Asian session.

G.

To do this on other areas GG53 explains it well here: http://www.forexfactory.com/showthread. ... ost5976398

Attached is an indicator to make it easier. You have to insert two vertical lines named OVBSTART and OVBEND and it will draw the channel.

[Kruspe]

Hey guys,

it looks like a really great system and I like the logic behind. I see a lot of potential in this kind of strategy. I try to watch it and I´ve got some questions. We have to wait for OBV close out of range ? And only first breakout is valid. Once it is broken we do not trade that pair until next day, right ?

Btw, there are some differences between brokers. GP vs Cowboy IBFX (I don´t know what´s the problem?)

Thanks, Kruspe

[Dewey McG]

Hey guys,

it looks like a really great system and I like the logic behind. I see a lot of potential in this kind of strategy. I try to watch it and I´ve got some questions. We have to wait for OBV close out of range ? And only first breakout is valid. Once it is broken we do not trade that pair until next day, right ?

Btw, there are some differences between brokers. GP vs Cowboy Cowboy IBFX (I don´t know what´s the problem?)

Thanks, Kruspe

You don't have to wait for the bar to close--GG53 says to take the trade as soon as the Gadi_OBV breaks out of the channel. I always wait a few seconds to make sure it doesn't just pop out and back in again. Chart time will give you a better feel. On another forum someone suggested moving down to the 5 min chart and then waiting for the bar to close. I stick with the 15 min and just wait a few seconds unless it is moving fast (I am sure programmers HATE instructions like that).

I asked GG53 about taking 2nd trades. He said after the first breakout the channel is no longer valid. Just doing a quick visual back test though it looks like signals going in the opposite direction of the first trade aren't bad if you want to experiment, but I would definitely avoid 2nd trades in the same direction.

Anytime you use and indicator based on volume there will be differences between brokers. They may not be big but they are there. I know some of the forums that do VSA (Volume Spread Analyses) talk about which brokers they prefer. I use TheCollectiveFx. You might try to do a visual back test on a few to eliminate any that are quite different from all the others.

[garyfritz]

Yeah, for volume-based approaches you have to remember forex is a non-centralized, non-exchange-traded market. Every broker has a different view of the market and thus liquidity. Hopefully they're all fairly similar, but...

[Dewey McG]

Today's session so far:

There were already big moves on the AUSUSD, NZDUSD and USDJPY during the Asian session, so no trade. The GBPUSD was no trade for me because the entry candle was too large.

[Dewey McG]

Made a quick TP on EURUSD and am heading to bed.

[Dewey McG]

Killian posted an EA for this here: http://www.forexfactory.com/showthread. ... ost7042711

He will be busy for a couple weeks but the EA needs tweaking if anyone wants to have a go at this.

Here are the issues:


1. I am not sure what the issue is with the trailing stop. Even when I set larger numbers I cannot get this to take a profit greater than 15 pips.


2. If the EA passes on a trade because the candle is too large, it should not take any trades in that direction for the rest of the session.


3. The EA should never take trades when the channel is broken from above for a long or from below on a sell.


4. Rather than just saying TVI above 0 for longs and below 0 for sells, we need to look at the angle.

[123Reverse]

To the OP, some questions in relation to the assertions of you last posts. (in case it helps)

2/. Candle too large:

There is the obvious question as to how you define too large. Also from a trading aspect, the start of many moves commence with a momentum candle. Unfortunately, as per your charted example, so to do the end of moves. It's not a given that you can not have a good trade after the first momentum candle.

3/. Channel is broken or touched from above for a long:

In watching this I have seen examples of a good trade when the indi gives a pullback to the top of the channel.


Sorry if I am wrong as I do not know the first thing about EA's, but as I understand the concept for this EA, it's all based on volume leading price. Yet there does not seem to be any requirement for it to do so. Obviously nothing works all the time, and so volume does not always lead price.

I wonder if a requirement that volume be moving ahead of price at the time of the OBV breakout, maybe an alternative to some of your suggestions?

[Dewey McG]

To the OP, some questions in relation to the assertions of you last posts. (in case it helps)

2/. Candle too large:

There is the obvious question as to how you define too large. Also from a trading aspect, the start of many moves commence with a momentum candle. Unfortunately, as per your charted example, so to do the end of moves. It's not a given that you can not have a good trade after the first momentum candle.

Thanks for your input.


The rule comes from GG53, the originator of this method “DON'T enter a trade if the entry bar is larger than X2-X2.5 than its average previous ones.” You are correct in that this trade will work out many times anyways, but it is not as strong a trade. The EA does not take these trades, but it will be more profitable I believe, if it then doesn't take any trades in the same session going the same session.

3/. Channel is broken or touched from above for a long:

In watching this I have seen examples of a good trade when the indi gives a pullback to the top of the channel.

Maybe there are some good trades that way, but I see a lot of losers when testing the EA when it does this. I would rather give up some trades but have a higher hit rate.

Sorry if I am wrong as I do not know the first thing about EA's, but as I understand the concept for this EA, it's all based on volume leading price. Yet there does not seem to be any requirement for it to do so. Obviously nothing works all the time, and so volume does not always lead price.

I wonder if a requirement that volume be moving ahead of price at the time of the OBV breakout, maybe an alternative to some of your suggestions?

Can you please explain what you mean?

[Dewey McG]

Trades from Thursday and Friday--not my best. I am thinking I should not take as many different trades across somewhat correlated pairs and take solid signals so I am managing less at one time. Some of the pairs had bigger moves in the Asian session so no trade anyways.


Thursday should have been a BE + 1 but I actually took a small loss for hanging on too long. Friday I was lucky--not supposed to be trading Fridays per rules, but I look to see if there are strong signals. I hit the sell button too early but it worked out and I hit TP anyways.