slipshod wrote: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 wrote:... 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 wrote: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.