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The DIBS Method... No Free Lunch continues

  • #8,861
  • Nov 5, 2009 6:35am Nov 5, 2009 6:35am
Quoting Islander
Good Morning Jarroo and all.

Thanks for starting this new thread, I'll be posting when I can - after I've got my head round the overnight -for me! - action....not a lot it seems http://www.forexfactory.com/images/icons/icon12.gif
hi i will like to say that the system is cool
  • #8,862
  • Nov 5, 2009 4:18pm Nov 5, 2009 4:18pm
the trades that have gone 2:1 and stop out are not painful.........its the 4 and 5 to 1's that get stopped out if you are trailing with a big number (say a 40 period MA) that get a little annoying from time to time

Having a positive EV makes you profitable

Quoting PinMan
This system, DIBS, is known to have an edge. But everything I'm seeing on here is about traders trying to improve their win/loss ratio and generally to avoid losses. Let me spell it out in clear terms: HAVING A WIN/LOSS RATIO OF GREATER THAN 50% WILL NOT AUTOMATICALLY MEAN THAT YOU ARE PROFITABLE. I lose regularly, small and often, and I occasionally win big. I can only do that by cutting my losses and letting the profits run. At the end of the day, every time you take a trade, one of two things will happen: you'll either be stopped out for your...
  • #8,863
  • Nov 5, 2009 4:27pm Nov 5, 2009 4:27pm
James......I beat you........im up for 1 am EST

I am a total zombie.................


Quoting james996
The hardest part of trading is sticking with something long enough to experience a positive outcome.

To summarize what I mean. It takes time and patience to stick with a given methodology. All proven methods have there strengths and weaknesses. One must find what works with there personality and back test it. Then back test it again and again and again. Then one needs to allocate a time frame long enough to reap the rewards. I'm not talking about a few months here either. Do you think personal financial freedom is achieved by trading for a few...
  • #8,864
  • Nov 5, 2009 6:06pm Nov 5, 2009 6:06pm
most people fail to realize the power of a system with even the the smallest of edges

I have one system - not DIBS, that has an edge that ranges from .95 to about 2.3 per trailing 100 trades(I evaluate my edge over groups of 100 sequential trades). Since I started, the system itself has an edge of about 1.83 and about a 35% win rate

Even an edge/profit factor of 1.1 resulted in a 13% gain of over the course of 100 trades from Sept 9 to yesterday - 2 months. IF you want to be simple, multiply that by 6 to get an annual return (I know, you cant really make that assumption, but it more of a demonstration) of about 78% and all that edge means is that for every 100 of price action I take, i make 110 of profit........

the point of this post is to say that if you are comfortable with DIB's edge - and its magnitude has been alluded too before.......stop worrying about losses. If you want a suggestion of how you can "filter out" some lower probablity trades, think about this. Say for example you are going to use a 20 MA for a trailing stop and you get a proper entry signal, down day, short dibs set up, but it is above the MA, how could you possibly use the MA as a trailing stop when its already telling you not to get in the market........I use that rule for my other system and it keeps me out of way more bad trades than good

Quoting PinMan
I run at an actual win/no-win ratio of less than 50%.

Typically I have about 35% of trades that get stopped out for a -2:1 loss (i.e. the free trade didn't kick in)
About 25% of trades stop out for no loss (i.e. the free trade kicked in but then my stop was hit, so 1:1 win and then a -1:1 loss)
The rest of my trades I exit according to my EMA line, which typically means the running trade being closed at somewhere between 0.5:1 and 6:1 (on top of the 1:1 I already took for the free trade cushion). The best was one I let to run to 15:1.

My rules...
  • #8,865
  • Nov 6, 2009 9:43am Nov 6, 2009 9:43am
Thanks for the kind words about my posts - I'll tell TheRealThing later today when I call him (after the NFP action finally slows down).

Your results obviously show the benefits of being willling to hold onto winners and put up with multiple losers, over and over again.

In the for-what-its-worth department:

You really do get past the pain of losses at some point. When you finally realize that the losses are necessary discouragement to the individuals/institutions on the other side of our trades who haven't realized (or could care less about) the power of the "long tail".

It simply becomes a matter of immediately saying (internally) after a loss, "next...."

It's too bad that I don't get much chance to review this thread and only get to from time to time. You guys have done very well in making it possible for newer traders to see on the other side of the curtain.

(I called TRT a few minutes ago about how large the DIBS thread has gotten. He told me that it is the perfect case of "less is more", as in a few short posts inspiring some of the best traders reading it to excel. In my view, the DIBS concept gets all the credit. Simple maybe- but psychologically difficult to implement; just the way optimal trading really is.)

Thanks again to you and all the others who contribute to this great thread.

PeterCrowns


Quoting PinMan
Hi All,

First post - but I thought I'd drop in to say how great this forum is. I've perused a lot of the posts in this forum, notably the posts by PeterCrowns, Bemac, TheRealThing, and RazorTrader. There's a lot of good sense in here. I've been successfully using IB trading for the last four years and I've seen an average 4x per annum growth on my account - I started out with £500 and used a spread bet platform rather than a broker (after initally getting hacked off with requotes), I'm not here to boast but I'll let you do the math! I've done...
  • #8,866
  • Nov 6, 2009 9:53am Nov 6, 2009 9:53am
Quoting PeterCrowns
Thanks for the kind words about my posts - I'll tell TheRealThing later today when I call him (after the NFP action finally slows down).

Your results obviously show the benefits of being willling to hold onto winners and put up with multiple losers, over and over again.

In the for-what-its-worth department:

You really do get past the pain of losses at some point. When you finally realize that the losses are necessary discouragement to the individuals/institutions on the other side of our trades who haven't realized (or...
Welcome back and thank you for the kind words, im sure there are alot of people here who would like to thank you and Joel for the time you have given and the ideas that have allowed a more simple way of trading.

My personal thanks for the helping me develop my trading around the ideals of this thread.

Razor
  • #8,867
  • Nov 6, 2009 10:02am Nov 6, 2009 10:02am
Quoting PeterCrowns
Thanks for the kind words about my posts - I'll tell TheRealThing later today when I call him (after the NFP action finally slows down).

PeterCrowns
Wow its good to see you here. I learned so much from you and Mr "infinite yield".
THANK YOU!
  • #8,868
  • Nov 11, 2009 5:13am Nov 11, 2009 5:13am
All,

I’ve been having a chat privately with another member today and one thing that is useful would be a trend gradient indicator.

I’m no programmer so does anyone know how to program an oscillating indicator that shows dy/dx (i.e the gradient) of the line, be it EMA or SMA or whatever? It would need to be able to be user-configurable to set the size of the MA.

Anyone able to help?

Cheers
PinMan
  • #8,869
  • Nov 11, 2009 7:05am Nov 11, 2009 7:05am
Quoting PinMan
All,

I’ve been having a chat privately with another member today and one thing that is useful would be a trend gradient indicator.

I’m no programmer so does anyone know how to program an oscillating indicator that shows dy/dx (i.e the gradient) of the line, be it EMA or SMA or whatever? It would need to be able to be user-configurable to set the size of the MA.

Anyone able to help?

Cheers
PinMan
How would it be useful?
  • #8,870
  • Nov 11, 2009 11:49am Nov 11, 2009 11:49am
Quoting PinMan
All,

I’ve been having a chat privately with another member today and one thing that is useful would be a trend gradient indicator.

...
MT has one called Momentum but is normally called Rate of Change. (RoC).

Momentum is the gradient of price, I don't think you can apply it to a MA.

That said, Razor has a point, using momentum is the same as using price, just with more noise. Applying it to an MA just introduces lag. So you have a noisy, lagging indicator.
  • #8,871
  • Nov 11, 2009 1:23pm Nov 11, 2009 1:23pm
Quoting jzw
MT has one called Momentum but is normally called Rate of Change. (RoC).

Momentum is the gradient of price, I don't think you can apply it to a MA.

That said, Razor has a point, using momentum is the same as using price, just with more noise. Applying it to an MA just introduces lag. So you have a noisy, lagging indicator.

I think PM might be eludng to this being of use for determining the direction in which to take the break, or at least aid in that decission.
  • #8,872
  • Nov 12, 2009 4:17am Nov 12, 2009 4:17am
Quoting geoffrod
I think PM might be eludng to this being of use for determining the direction in which to take the break, or at least aid in that decission.
Actually, it's a rubbish idea - I can just look at the gradient of the MA and work out whether the general trend is up or down, strengthening or fading out. The reason I was asking was I won't trade against the trend in a strong trend, but I will when it looks like it is weakening. Even then though, it's sometimes only a retracement and I get knocked out.

PM.
  • #8,873
  • Nov 12, 2009 12:43pm Nov 12, 2009 12:43pm
Any price derived indicator like MACD will tell you that.

I'm not sure it will improve DIBs but tell us how you get on.
  • #8,874
  • Edited 5:30am Nov 13, 2009 5:16am | Edited 5:30am
Here's an example of a profitable DIBs from Thursday on EUR. If you'd taken this you could have made 100 pips on approx 30 pip risk. This was a particularly nice DIB because its forms in a downtrend off 1.50 and on the M5 chart you can see the consistent pattern of lower highs.

However look at the M5 chart. Each hour on the M5 chart is a different colour. There are 2 things to notice. The low on the H1 DIB does not correspond to a swing low on the M5 chart. The real break-out level is 2 pips lower. Secondly if the hour had began 5 mins later the preceding H1 bar would not have enclosed the DIB i.e. you would not have had an inside bar.

My point is that highs and lows on an H1 bar don't always correspond to any meaningful price high/low. It also means that DIB set-ups are somewhat random. Some price patterns will miss being a DIB just because of where the H1 bar opens/closes.

I like DIBs as a technique. But I think that it is a subset of the more general idea of a break-out from a low volatility coil.
Attached Image (click to enlarge)
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  • #8,875
  • Nov 13, 2009 5:33am Nov 13, 2009 5:33am
too BAD Peter didn't told us ALL secrets, take a look on g/u now on 1 hour and 15 min charts! what do YOU think?
  • #8,876
  • Nov 13, 2009 5:52am Nov 13, 2009 5:52am
Quote
too BAD Peter didn't told us ALL secrets
Well you have to have something to do while you wait for the next DIB to form.

G/U - looks a valid DIB for a long break-out.

I don't like it because the break-out is 1.6690 and Wednesdays lows are 1.6710 which is the first obvious resistance. But just my opinion.
  • #8,877
  • Nov 13, 2009 6:01am Nov 13, 2009 6:01am
Quoting jzw
Here's an example of a profitable DIBs from Thursday on EUR. If you'd taken this you could have made 100 pips on approx 30 pip risk.

However look at the M5 chart. Each hour on the M5 chart is a different colour. There are 2 things to notice. The low on the H1 DIB does not correspond to a swing low on the M5 chart. The real break-out level is 2 pips lower. Secondly if the hour had began 5 mins later the preceding H1 bar would not have enclosed the DIB i.e. you would not have had an inside bar.

My point is that highs and lows on an H1 bar don't...
I agree with the above but would add there are many nuances to trading that no system can encompass. The concept or methodology of dibs risk/reward should be ones main focus. Dibs trades are elegant in their simplicity but not all encompassing. Everything else the trader should bring to the table.

kind regards

ic


ps good post jzw i said i wouldn't post here again but just could stop myself lol if you've not already read about infinite yield theory (im sure you have it's more for anyone else reading) then you should google it.

pps, as far as entries go i apply the concepts to all my trading
  • #8,878
  • Nov 13, 2009 6:20am Nov 13, 2009 6:20am
From the first start of my forex trading i started with teb63 concept tor trade on multiple timeframes. I like'd it BUT all the indy's repainted! i blew my account!!! but education cost money, right?
so now i'm with DIBS method, last month was great! 200 +pips, but anyway, somehow i'm at b/e. so starting from this week i'm trading only un 1 hour timeframe waiting for inside bar, when it happens i switch to 15 min AND wait for another inside bar. So far so good. i will inform you about this concept.

good luck jzw!

edit: i took that trade on g/u got my 12 pips, i exit on 1;1 ratio
  • #8,879
  • Nov 14, 2009 6:53pm Nov 14, 2009 6:53pm
Quoting jzw
~
On the point about what PC used to have higher probability trades - are people sure is was a technical filter?
I wondered if it had to do with the judging the direction. ie to enter long or short. Peter said to use the daily open (long above, short below) but the way he said it left me thinking that's not what he does.
Good Trading
  • #8,880
  • Nov 15, 2009 7:08am Nov 15, 2009 7:08am
There have been in the past an number of messages regarding hidden meanings, or missed information, secrets not told about the method from the man PC. My take on the situation is that having spent years trading and doing things the hard way, loosing money and doing what he needed to do to get his edges, it is just nice that he gave up a little piece of the pie.

Most of the people who read this thread do not have the dedication to go out of there way to make something happen for themselves, in fact that would go for the vast majority that visit any thread. The signs are all the same, you want the secrets, the formulas and everything else wrapped in a neat little box so that you can make millions. Heres the thing, even if they were wrapped in a neat little box you would still loose because you lack some fundamental components that cannot be given to you. 2 of those would be at the least dedication and discipline. Without them you could have all the ingredients and still not bake the profits.

Too many just come by and think things should be given, without effort and in alot of cases without any manners. I see alot of post, can you give me this and that. I also have been seeing more and more post, not primarily this thread but it has happened time and time again, in respect to questions that have been answered umpteen times. These questions get asked because the person asking doesnt have the dedication or discipline to respect the information given, for free, and go back and read the thread. In most cases (generally all depending on the length of the thread) the question being asked by the lazy, quick to get rich, person (i wouldnt label you a trader) has more or less been answered a few times because someone was kind enough to help out a past lazy individual (unless the question was unique in which case that doesnt apply).

PC dropped by the other day and apart from Nicola (elitejets) and I, it seem nobody actually noticed. Im not sure if that is because my measure of a person who gave so much time early in the picture, to divulge and help with some pretty simple steps to trading a particular setup that can over the period of time prove to be very profitable. He and Joel, to me, are very import for helping me make a fundamental shift and for that a simple thanks, which I made for myself and most loyal followers, was the least I could do.

Sphinx I am not going to read to much into your comment about PC and how BAD it is that he didnt divulge all his secrets, I am sure it was harmless and like I say, I am probably putting to much into this because of my thoughts above. I believe PC gave everyone more than enough information for them to go out, tackle the situation and learn from it themselves. The truth is that everyone will trade these differently and in the end if you feel you need to add some complications to the formula with the use of indicators and filters in order for you to feel comfortable then by all means do so. It is about some trial and error, learning from the mistakes just the same as all full time, profession traders have too. Its a dog eat dog environment and only the ones that are prepared for the long journey will survive. Failure to incorporate some basic discilpine and dedication, to learn from trading live (or demo) and furthering your knowledge base (through both active reading and trading) will usually see you struggle for consistancy.

I hope you all had a good weekend, the above is not to put people offside, just merely the thoughts of someone who found added respect from someone who recently came back, someone who was here to start and in his spare time still keeps a small eye on this thread.

Razor
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