oscarvs

BITCOIN KILL ZONES v2

Kill Zones

Kill zones are really liquidity events. Many different market participants often come together and act around these events. The activity itself may be event driven (margin calls or options exercise related activity), portfolio management driven (buy-on-close and asset allocation rebalancing orders) or institutionally driven (larger players needing liquidity to get filled in size) or a combination of any/all three. The point is, this intense cross current of activity at a very specific point in time often occurs near significant technical levels and trends established coming out of these events often persist until the next Kill Zone in approached/entered.

Specifically, there are three Kill Zones and each has its own importance/significance.

1. Asian Kill Zone (1900 - 2300             EST) Considered the "institutional" zone, this zone represents both the launch pad for new trends and also too a reloading area from the post American session. It is the start of a new day (or week) for the world and as such it makes sense this zone will often set the tone for the rest of the world's trading day. Since it is very wide (4 hours) one should pay attention to the Tokyo open (2100 EST) the Beijing open (2120 EST) and the Sydney open (0650 EST previous day).

2. London Kill Zone (0200 - 0400 EST) Considered the center of the financial universe for more than 500 years, Europe still carries a lot of influence within the banking world. Many larger players use the Euro             session to establish their positions. As such, the London open often sees the most significant trend establishment activity through any given trading day. Indeed, it has been suggested 80% of all weekly trends are established through Tuesday's London Kill Zone.

3. New York             Kill Zone (0830 - 1030 EST) The United States is still by far the world's largest economy and so by default New York's open carries a lot of weight and often comes with a big injection of liquidity. Indeed, most of the world's trade-able assets are priced in US dollars which gives even more significance to political and economic activity within this region. Because it comes relatively late in the globe's trading day, this Kill Zone often sees violent price swings within it's first hour leading to the time tested adage "never trust the first hour of North American trading.

Additional notes:
It has become apparent these Kill Zones are evolving over time and the course of world history. Since the end of the second world war, New York             has slowly encroached on London's place as the global center for commercial banking. So much so through the later part of the 20th century New York             was considered indeed, the new center of the financial universe. With the end of the cold war that leadership seems to have shifted back toward Europe and away from The United States. Additionally, Japan has slowly lost its former predominance within the global economic landscape while Beijing's has risen dramatically.

Only time will tell how these kill zones will evolve given each region's ever changing political, economic and socioeconomic influences.

Trading Notes:
If you have specific levels of interest odds are the bigger players have the same levels too. If it is indeed a solid level, look for price to trade to your level through the kill zone because the zone is a liquidity event where the bigger players can find enough size to get their big orders filled.

Try to avoid taking positions heading into Kill Zones and look for confirmation of your levels coming out of the event. For the more advanced trader, look to take positions on those level hits through the zone but understand higher time frame players often have far deeper pockets then day traders and can endure far more volatility then us little guys.

Thanks for the contribution to @CRInvestor and @ICT_MHuddleston
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// Created by https://www.tradingview.com/u/oscarvs @ 18 October 2014 | @theoscarvs
// Inspired by @ICT_MHuddleston concepts and @CRInvestor courses, code based on @ChrisMoody scripts
// https://github.com/oscarvs/bitcoin-killzones
// Time sessions are directly sync from exchange/tv data (Change manually if you need to adjust DST Daylight saving time)

study(title="Bitcoin Kill Zones v2 [oscarvs]",shorttitle="Bitcoin Kill Zones v2", overlay=true)
timeinrange(res, sess) => time(res, sess) != 0

// **** Checkboxes and custom Session
iKZNY = input(true, title="New York Kill Zone")
iOpenKZLondon = input(true, title="London Open Kill Zone")
iCloseKZLondon = input(true, title="London Close Kill Zone")
iAsiaKZ = input(true, title="Asia Kill Zone")
KZNY = input('1230-1430', type=session, title="New York Kill Zone")
LondonOpenKZ = input('0600-0800', type=session, title="London Open Kill Zone")
LondonCloseKZ = input('1500-1700', type=session, title="London Close Kill Zone")
AsiaKZ = input('2300-0300', type=session, title="Asia Kill Zone")

iRealOpenSessionAlertBar = input(true, title="Real Open Session Alert Bar")
NYOpenAlertBar = input('1330-1345', type=session, title="New York Open Session")
LondonOpenAlertBar = input('0700-0715', type=session, title="London Open Session")
LondonCloseAlertBar = input('1545-1600', type=session, title="London Close Session")
AsiaOpenAlertBar = input('0000-0015', type=session, title="Asia Open Session")

// **** Logic
sessToUse = iKZNY == 1 ? KZNY : '0000-0000'
sessToUse2 = iRealOpenSessionAlertBar == 1 ? NYOpenAlertBar : '0000-0000'
sessToUse3 = iOpenKZLondon == 1 ? LondonOpenKZ : '0000-0000'
sessToUse4 = iRealOpenSessionAlertBar == 1 ? LondonOpenAlertBar : '0000-0000'
sessToUse5 = iCloseKZLondon == 1 ? LondonCloseKZ : '0000-0000'
sessToUse6 = iRealOpenSessionAlertBar == 1 ? LondonCloseAlertBar : '0000-0000'
sessToUse7 = iAsiaKZ == 1 ? AsiaKZ : '0000-0000'
sessToUse8 = iRealOpenSessionAlertBar == 1 ? AsiaOpenAlertBar : '0000-0000'

// *** Apply custom rules
bgPlot = (iKZNY == 0 ? time(period) : time(period, sessToUse)) 
bgPlot2 = (iRealOpenSessionAlertBar == 0 ? time(period) : time(period, sessToUse2)) 
bgPlot3 = (iOpenKZLondon == 0 ? time(period) : time(period, sessToUse3)) 
bgPlot4 = (iRealOpenSessionAlertBar == 0 ? time(period) : time(period, sessToUse4)) 
bgPlot5 = (iCloseKZLondon == 0 ? time(period) : time(period, sessToUse5)) 
bgPlot6 = (iRealOpenSessionAlertBar == 0 ? time(period) : time(period, sessToUse6)) 
bgPlot7 = (iAsiaKZ == 0 ? time(period) : time(period, sessToUse7))
bgPlot8 = (iRealOpenSessionAlertBar == 0 ? time(period) : time(period, sessToUse8))

//**** Plot as background
bgcolor(iKZNY and bgPlot > 0 ? red : na, transp=90) 
bgcolor(iKZNY and iRealOpenSessionAlertBar and bgPlot2 > 0 ? red : na, transp=70) 
bgcolor(iOpenKZLondon and bgPlot3 > 0 ? green : na, transp=90) 
bgcolor(iOpenKZLondon and iRealOpenSessionAlertBar and bgPlot4 > 0 ? green : na, transp=70) 
bgcolor(iCloseKZLondon and bgPlot5 > 0 ? olive : na, transp=90) 
bgcolor(iCloseKZLondon and iRealOpenSessionAlertBar and bgPlot6 > 0 ? olive : na, transp=70) 
bgcolor(iAsiaKZ and bgPlot7 > 0 ? orange : na, transp=90) 
bgcolor(iAsiaKZ and iRealOpenSessionAlertBar and bgPlot8 > 0 ? orange : na, transp=70) 
Oh, Yesssh! thank you, Oscar
+1 Reply
Amazing work Oscar!
+3 Reply
If only regular traders would trade Bitcoin, then it would make sense to apply Forex kill zones to Bitcoin. But for example the entire crash down to $275 happened during a weekend, while no classic broker was sitting on his desk.
+2 Reply
ChartArt ChartArt
Overall thank you for creating this awesome script :)
Reply
ChartArt ChartArt
Your script ignores weekends, while Bitcoin trades 24/7/365 and Forex trades only from Monday to Friday. Here is the crash using your script:

snapshot
+1 Reply
oscarvs PRO ChartArt
sadly I can't chart weekends directly (pinescript) because TV use regular sessions (mon-fri)... but, I think is good to use killzones only during "market" hours... maybe next version we can add more data as Bitcoin grows.
Reply
oscarvs PRO ChartArt
yes :) I think bitcoin is building his own rules/killzones, so, maybe this is a good start. check out london open/close, those are powerful liquidity events.

zoom out a little the chart and you can see how important was that 30k wall on monday london Open... after that $275 weekend... is REALLY interesting.
Reply
ChartArt oscarvs
I noticed it. But what really happened that hour is that the BearWhale removed the last remaining BTC from his massive sell wall. It weren't traders in London suddenly buying the entire sell wall. Maybe it was both, but I doubt London session opening was the main factor. Always be careful that correlation is not causation :)

snapshot
+1 Reply
ChartArt ChartArt
The bearwhale sold 24,580 coins of the original 31,487 BTC on Bitstamp. After removing his sell wall the bearwhale has still 6907 BTC (worth ~2 million US Dollar) left to dump on the market.
Reply
http://i.imgur.com/ugDKIut.png

That is presuming that was his total holdings. I think it was only a percentage. 10% or even less.
Reply
oscarvs PRO ChartArt
agreed, correlation :)

Lets see how this Killzone concept apply to bitcoin next months. this timeframe (mostly Asia) are a little modified to match bitcoin reality and not forex/stocks.
Reply
ChartArt oscarvs
Yes, it's mainly Asia and especially China who are moving the Bitcoin market. I've seen it with my own eyes how the USD exchanges (Bitstamp, Bitfinex) and even BTC-E already had a stable bottom around $450, but Chinese traders on OKCoin, Huobi, BTC China continued to dump and then the USD traders followed the downtrend and that's how we sank down further to $275.

BTW: It was Chinese "Golden Week" holiday during Oct. 1 - 7 when the price first crashed down to $275 and then bounced:

"China's National Day is a festival of great importance to the people nationwide and they celebrate it with great felicitation. In 1999, the Chinese government decided that the three days designated for the National Day celebration be combined with the two weekends on either side, thus giving people a seven-day vacation. it is regarded as another Golden Week for the Chinese people when they can do things people like to do."

Sources: http://www.travelchinaguide.com/intro/festival/ , http://www.travelchinaguide.com/essential/public-holiday.htm
+1 Reply
I found a problem:

The London Open Kill Zone is set to be from 0200 - 0400 EST, New York. This means it would be 0700 - 0900 UTC, in London. Therefore when I set the TradingView chart in the settings to use UTC as time zone the green "London Open Kill Zone" should appear from 0700 - 0900 UTC. But it shows up at 0445 - 0705 UTC and not definitely not 0700 - 0900 UTC.


snapshot


snapshot



It's currently still British Summer Time (BST) (meaning UTC +1 hour) until the end of October (Oct. 26) in London, Britain. Therefore 0700 - 0900 UTC +1 hour would actually be even later 0800 - 1000 UTC and not earlier.


Where is my error? Or is the error in the script?
Reply
oscarvs PRO ChartArt
idk why yours show 0445-0705 UTC, mine shows 0600-0800 UTC.

feel free to modify hours session to adapt British Summer Time (BST). If you have any technical issues, PM me and I can help better.
snapshot
+1 Reply
ChartArt oscarvs
It would be interesting to learn what is showing up when zan5hin and grahvity (who commented here) set their time zone to UTC in TradingView. I'm going to ask them via PM.
Reply
Hi Oscar, great indicator, but I have also a similar issue, charts on utc but killzones are showing up on wrong times.
Reply
It doesn't show future kill zones if you move the chart to the right. Would be nice for charting if that worked.
Reply
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