Pure and simple DIBS trading

This will be a pure DIBS trading thread. When I started out trading DIBS I tried to tweak the strategy, as somehow our brain is designed to do this to every strategy we encounter. After a short while I realised I was being an idiot for changing a strategy that has proven itself for decades. I was sabotaging my own trading success, as so many of us do.

So I thought I start a trading journal. This journal is mostly for myself to keep a track record of my trades and as leverage to keep on trading the ‘correct way’. This thread is also partly for the people reading this. Mainly to show you guys that it is possible to make money on a consistent basis if you follow your plan and stick to the strategy.

I only recently turned to live trading. I have successfully traded this method in demo for about 4 months. I will now trade the strategy live while trading it on larger timeframes on demo just to see if that is profitable as well. So I’ll trade it on 1hr live and trade the 4hr and daily timeframe on demo, if the 4hr and daily are profitable for 3 months I will trade them live to.

I will be trading DIBS as first described by Peter Crowns on this forum. If you want to learn about DIBS yourself you can just go to this thread: http://www.forexfactory.com/showthread.php?t=86766 you’ll find a nice recap of the strategy there. In my opinion it’s best to focus on the words of Peter and just leave the thread alone. Just as I did the first time I saw the strategy the thread is filled with people trying to change the strategy.

I will be posting all my trades and some random thoughts around forex. I don’t expect anyone to contribute as this thread is mostly for me and newbies, but feel free to comment if you feel like it.

Some other stuff to consider:
In the 4 months I traded the strategy I made around 150% profit. I was pretty lucky I must admit but at least this is proof that it is a great strategy. Please realise that 3 months is by no way a long enough timeframe to be proof that a strategy is profitable. But the fact that Peter traded it successfully for a really long time is enough proof for me. It still amazes me to have people ask questions like: uhh is there anyone trading this strategy profitable?? And people saying that the strategy is ‘outdated’ of ‘doesn’t work anymore’.

The 150% profit was realised using 1% risk on every position. The idea of this strategy is having half the position be losers, 40% going to BE and 10% go for extreme profits. This means that almost all the profit flowed out of about 6 positions. So is this system profitable? If I can manage to make enough profit for 2 years using conservative money management then yes, the system is probably profitable. Now I’m not saying this system is some sort of holy grail, THE ONLY THING I want to teach you is that you can take so much proven strategies, just demo them, learn to trade them, go live and start making money. The only thing that’s in your way is yourself, your arrogance, your ignorance. If you are having these problems then solve them. Go read books, don’t expect the magical solution to fly your way without any work or effort at all. Start reading trading in the zone for example, I try to read it every month…

Last thing before I will focus on putting up charts:
I will post the charts in mt4, but I don’t trade on mt4. I only use mt4 as my charting software. The actual trading I do is on a web based platform of another broker. I will not get in discussions about which broker I use because it doesn’t matter for the strategy and there are enough threads discussing what the best broker is. I do all my live and demo trading with this broker so I will not be posting the actual results, only the charts I use to make my decisions, my entries and my exits.

Some trading examples on the USD/CAD. I trade the 4 majors and the CAD, just because it's the only pair other then the majors with a relatively low spread (at least where i trade it is)



These are the last four trades on this pair. This is a pretty typical example for what you will encounter when trading this strategy. I took all these trades except trade 2.
Trade 1:
The trade just barely doesn't make BE and is stopped out.
Trade 2 (wasn't at my laptop so didn't trade this one):
This one just barely made BE, if your entry was wide it would just miss BE, no big deal anyway.
Trade 3:
A bread and butter trade for this strategy. You set your pending order, the trade takes off and goes to +12% right away. currently at about +10%, will keep this one open until a big retrace comes up and takes the sl out.
Trade 4:
Goes to BE, then gets takes out

So in recap:
-1%, 2 BE trades and 1 trade that is still open currently about 9.5% in profit, will try to keep this trade open for as long as i possibly can

Some more examples of this trading strategy. As I mentioned before I am trading this live on 1hr charts and trying out 4hr and daily chart trading on demo. So far the experience with both are very good. I took a trade yesterday on EUR/USD and thought I take the opportunity to show you the potential for trading the daily TF. I have a chart with all the trades if all rules are followed, I only took the last one as I only recently started trading this strategy on the daily timeframe. The last trade is currently a ‘free ride’ (so half the position is closed at 1/1 and the other half will remain open for as long as possible)
Please ignore the green and red line, they are the entry and sl from a hourly trade I made when I was using demo on mt4.

There are 8 trades if all the rules are followed, as I said I only took the last one in real time because I have not been trading this strategy on daily for a long time. This is just an example of how powerful the strategy is. Take in consideration that there is a 6.5 month time period for all these trades so there is allot of patience needed to trade this way.



The trades I didn’t mark on the charts are either not according to the rules or they went BE and then got stopped out. If I missed a trade feel free to tell me but take note that it wouldn’t really change the profitability.

Trade 1:
Perfect trade, small sl and stays alive.
Trade 2:
Slightly larger sl but still pretty perfect trade.
Trade 3:
Doesn’t make it to BE so -1%
Trade 4:
Takes a bit long to enter after the insidebar but I take these trades almost always if the price doesn’t go too far away from the entry level.
Trade 5:
Loser, -1%
Trade 6:
Good trade, but didn’t have a lot of time to develop into a big winner yet.
Trade 7:
Third and final loser, -1% normally there are more losers then this so no problem at all.
Trade 8:
Actually took this trade, currently at +1%, this is a ‘free ride’ now.

As you can see this result is pretty insane, normally there are a bit more losers then this. Not all timeframes and pair are going to be like this but it is a good example of how the strategy can work.

Recap:
-3% for the losers, some BE trades not worth mentioning, about 51% profit -3% so 48% profit in total. Not bad but this took almost half a year. Still if I could do this on 3 or 4 pairs that would be more than enough profit.

Couldn't update due to some weird connectivity issue, will try to keep this thread daily updated, because that's the only way to keep yourself on the right path imo.

Only took 1 trade this monday, no trades on friday. There were 2 potential trades on friday, 1 on EUR/USD which was to late for me and 1 trade on the USD/JPY which i didn't take because of the weakened uptrend.

The trade i did take today was a loss on the USD/CAD:

Bit of a boring week so far, the dust from the CHF settled down. The week will finally get interesting tomorrow when the ECB hold their press conference. I will look to get in some positions early in the morning so I have some free rides that will either go BE or profit massively.

Took 1 trade today, not very glorious: a loser on the EUR/GBP. This gets compensated by the move on the USD/CAD which was massively in my favour.



When trading this strategy, almost all your profit comes from 2-5 trades. This means that in between those trades you will have numerous BE trades and a lot of losses as well. However if you manage to keep 2-5 trades open for a couple of months in the direction of the trend that means you now have almost always at least 50% profit. That might take you a while, it might be boring and you might lose more than 20 trades in the meantime but it still means you made 30%. And here is the best part: if you keep those 5 trades open for a couple of months in the direction of the trend your losses will still be around 20 but the profit you make will very likely be more then 100 or 150%.

This is obviously also the thing that makes this strategy so mentally draining. Your waiting to get into a few trades, 90% of your trades will do nothing for you, waiting for your trades to profit big and most of all mentally surviving endless amounts of price swings back and forth.

3 trades today. A little bit of everything: 1 BE, 1 loss and 1 free ride that’s +4% now. The BE and loss were on the GBP/USD. The free ride was on the euro, my longer term positions also profited nicely from the trend continuation. The euro trade:



Always funny how your effective trading happens in a couple of minutes while your watching those charts for an entire week.

No trades today. All the pairs were going in the opposite direction of the bigger trend. Not really a big problem as the pairs didn’t move to much against my positions. One of those days where you can just leave early and move on with other things in your life. If you see the movement is at the wrong side of the daily open for the first 5 market hours, you really don’t have to keep watching the markets meticulously.
Only disadvantage of going away is you might miss some late trades on the 4hr, which I trade all day. Still only demo because I haven’t been testing the 4hr and daily for nearly long enough and it’s not in the original strategy.

Thanks for starting this thread.
I'll be interested to follow this journey.

I've dipped into the other thread you've linked to and loaded an inside bar and the Dibs indicators on my chart.
Maybe, you can tell me whether I've got the idea?



Also, I was wondering about avoiding the famous break-out traps. Seems one could easily become prone to that with this approach. Are there filters or certain conditions you trade or don't trade this method. Context is everything isn't it? Perhaps, we'll see more of the picture come together.

thankx

USDJPY H1

I'll try to answer all the questions as well as i can:

@livindaylight:

You definitely got the idea, just a couple of small thing missing. First you seem to take the daily open as the horizontal line for making decisions, according to the dibs rules you should use the 6 GMT open as the line to use for making long or short decisions. The person that posted this strategy for the first time said I doesn’t matter to much what time you take, but there’s definitely a difference between 0 gmt and 6 gmt. Your chart already said you need to change the indicator so you’ll probably already done this. what i mean is try changing the daily open indicator to 6 gmt, it should be possible in the settings.

The other trade on the double IB was not a trade in my book because it was on the wrong side of the 6gmt open. About avoiding fakeouts, there are a couple of built in ways this strategy deals with them. First of trade mainly during the early market hours, stronger volatility so more chances of going at least BE, also no trading in off-market hours, these hours always have a higher chance of fakeouts. Second and probably most important is that by trading IB’s you trade relatively small SL’s so your trades will quickly go to BE before a fakeout happens. Other than that you’ll just have to deal with fakeouts, like any strategy not all pitfalls can be avoided.

Hope that answers your questions, if you have any more I’ll be happy to answer them.

About trading the retrace, i only do this when the trade didn't make 1:1 R:R yet. In this the trade would have already been closed half because the trade moved enough as far as the sl (so then we close half the postion and leave the other half open). I don't see nearly enough retraces that happen like this to make this into a strategy spinn off, and yes this is also because i just love the simplicity the original rules provide us.

I wanted to make 1 more point that is very important. Trade with the trend. The intention of the strategy is to open positions with a small SL and try to keep them open for several weeks. This means that if you take positions that are not in line with the overall trend they have a very small chance of staying open. To determine the trend i take the weekly TF (as suggested by original strategy spreader). A simple look if the line goes up or down is enough. If you go look at the majors now you'll see that means that i currently only short the EUR/USD and GBP/USD, i currently don't trade the USD/CHF for obvious reasons, I don't trade the USD/JPY untill it starts going with the uptrend again, lastly i buy the USD/CAD.

Hope all of that helps and i answered all your questions.

Yes, you have nevie - thank you very much.
I did not ''get'' that the 6gmt line was the line in the sand for orienting our decision, so glad I asked and thanks for clarifying that one especially.

Yes, context is everything, and as a trend continuation method InsideBars make sense. Perhaps, if its clear that one is in a correction phase then one can countertrend too; its just a case of being aware I guess, where one is overall on a chart and price/time-cycle.

Looking forward to some more charts examples and studies of this way of trading

EURJPY

From HTF perspective this might have been against momentum but that aside for a moment, on principle would this one have qualified. Curious, about IB forming prior to 6AM

This was a big topic of discussion in the DIBS community for a while. I can't remember if it was in the original or in the continuation thread. From what i understand you can take trades from IB's that are formed before 6am as long as the entry lines are not broken before 6. Personally i wait until the 7-8am bar because that's the time i wake up. You can trade from 6am and take entries from bars that formed between 3-5 but keep in mind the volatility will be lower. Because i don't think staring at charts from 06.00 to 20.00 i healthy i restrict myself to the most important market hours, the hours your trade is the most likely to stay alive anyway. I personally trade from around 8 to 2-3, which is 7 to 1-2 in GMT time.

Don't put to much focus in the specific hours to start trading from or to take as your daily open, in the end trading this strategy disciplined and having patience are key to trading.

Added the standard template and indicators for anyone that needs them.

Thank you for your comments and further clarification, nevie.
FF needs a 'Like' button

Not a lot of action today. Everytime there is a countertrend move you have to stop trading or use another strategy in the meantime. Personally i think the knowledge that the trend will continue and good trades is enough but that might not satisfy everyone. The loss was the only trade that could be taken in the earlier hours. The buy on the USD/CAD:



Other than that not to much action today, just waiting for the trend to resume. Just took a demotrade on the eur/usd daily tf, see how that one turns out.

Hi Nevie!

Congratulations for 150% on 4 months at 1% risk .

I will to read the original thread to understand better.
Is it posible make/automatize this system for make a EA ?

Thanks for your time.

Do you mean this Daily IB



On the H1:



correction: dibs indy did paint the green horizontal line. I somehow missed it. Usually, there is the red one too, but that's definitely not there. Still getting to know this tool