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The DIBS Method... No Free Lunch continues

  • #11,241
  • Apr 12, 2018 6:41am Apr 12, 2018 6:41am
Quoting smikester
{quote} Good work. I did it too. Considering using the 20dma to trail this one, currently at 1.2327.
Well, got stopped few hours later. The big trouble is to control the expectations/anxiety after so many failed tries.

Now it's UJ turn, which is trading in a very narrow range (90 pips) for over a week. Had a nice breakout today.
Attached Image (click to enlarge)
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"The reason I was born and came into the world is to testify to the truth."
  • #11,242
  • Apr 17, 2018 6:27am Apr 17, 2018 6:27am
The UJ trade above was stopped. It broke the weekly resistance very shortly and then retraced back. That must be the time when people say that DIBS doesn't work... Of course! Any breakout method will bring lots of losses if the market stays caged inside a 120-pip range for almost two weeks and you keep trying to trade it everyday!

To keep trading a choppy market like UJ is frustrating, even a "suicide". Nevertheless, I consider it a good exercise on learning to lose. No one can trade DIBS successfully without learning to take loss after loss (small ones, of course), patiently, until the time comes and the hoped breakout cover all our losses.


I do believe there is a beautiful story to be told about DIBS on the crosses, even though I try to stick to the majors at this initial phase. One example is GBPCHF: a very smooth uptrend since March 7th, when you could have taken a 16-pip long IB @1.3017 and produced almost 800 pips after 40 days without a sweat!

It might be late now but I decided to enter a small long order @1.3782 and see where it goes. The BOE might bless us with a rate hike and bring the pair up a little more.
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Click to Enlarge Name: 20180417-GBPCHF-H1.png Size: 33 KB
"The reason I was born and came into the world is to testify to the truth."
  • #11,243
  • Apr 18, 2018 2:26pm Apr 18, 2018 2:26pm
It's quite hard to trade UJ at the moment. Ridiculously small daily ranges (33 pips yesterday, 40 pips today). It's a miracle that I was still able to get any profit at all this month.

I'm ashamed to confess that I "faked" an IB yesterday at @107.11, when two bars were almost identical, and entered long. Later on there would be a real IB anyway @107.15.

But even worse: I made the SL bigger than usual (25 pips), hoping that the support @106.86 would be respected. After it fell under @107.00 I added a smaller position at @106.95, hoping that a retracement would help my cost average. Totally undisciplined!

Anyway, the trade is still alive right now but without conviction. As Mad Max would say: "Hope is a mistake".
Attached Image (click to enlarge)
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"The reason I was born and came into the world is to testify to the truth."
  • #11,244
  • Apr 25, 2018 4:37am Apr 25, 2018 4:37am
Eliminating emotions from trading - you have to learn to lose and to win:

Inserted Video
"The reason I was born and came into the world is to testify to the truth."
  • #11,245
  • May 2, 2018 7:42am May 2, 2018 7:42am
Thing are so quiet here

I found a post from 2016 which seems very interesting. It has some backtesting results.

There is one thing that I would like to point out in that quoted post: it's expected that some periods won't bring the same results than others. Still, only E/U was tested and we can expect that the result may vary depending on the pair. So if, according to the quoted post, some years might bring weak results for E/U, the result can be totally different for U/J, G/U and G/C. It's necessary to backtest all four pairs in order to know what the real drawdown would be if all of them are traded on a same account.

Trading all four pairs brings a nice diversification and I could see its results on my own backtest (which was limited to less than 12 months).


Quoting GlobusFX
(...) I've read thru the whole thread and decided to made some backtesting based on info provided here. Actually what I would like to discuss is some mixed results I've got - I've backtested for years 2008 to 2014. Here is the EA I've made to backtest the strategy - you are welcome to use it.
"The reason I was born and came into the world is to testify to the truth."
  • #11,246
  • May 2, 2018 10:41am May 2, 2018 10:41am
I am trading the method again but there's nothing more to be said.

Only reason I'm posting here is because trading gets lonely and boring so I look around ff sometimes to pass the time.

Good luck to all trading DIBS. It looks like we may be in for some profitable times ahead.
  • #11,247
  • May 6, 2018 2:35am May 6, 2018 2:35am
the method still wording ????? any update????
  • #11,248
  • May 7, 2018 5:30am May 7, 2018 5:30am
Quoting saidsadalla
the method still wording ????? any update????
Yes, this method still works in its simplest form. Find trending pairs and get cracking!
Gone to a better place
  • #11,249
  • May 7, 2018 5:33am May 7, 2018 5:33am
Quoting harvest3r
Thing are so quiet here I found a post from 2016 which seems very interesting. It has some backtesting results. There is one thing that I would like to point out in that quoted post: it's expected that some periods won't bring the same results than others. Still, only E/U was tested and we can expect that the result may vary depending on the pair. So if, according to the quoted post, some years might bring weak results for E/U, the result can be totally different for U/J, G/U and G/C. It's necessary to backtest...
I'm sorry it is so quiet. I like to read your posts. I don't post much here because I feel everything has been said that is worthwhile. I have nothing to add. Sometimes I get the urge to post succesful trades, but that seems like swanking about, because I should also post all the failed trades.
Gone to a better place
  • #11,250
  • May 8, 2018 6:25am May 8, 2018 6:25am
Thanks everybody for the replies. It's fine, I'm not feeling thaaaat lonely LOL

Same feeling here: don't want to let the thread die, but there is nothing useful/significant to say... well, maybe there is, just not sure if it was mentioned in the previous 10,000 posts!

Last week was tragic, not a single winner trade. Biggest drawdown since I started in February.

I managed to write some scripts to process historical data from the last 10 years (tks Oanda). Results were mixed. In general, even my weird version of DIBS is profitable but some pairs got a much better results than others. I need more time to test different exit strategies.

Example: USD/CHF is moving sideways for years. In the first semester 2016 there were only 3 winners for 33 losses. I'm not willing to spend six months trading for no profit

That's why it became much clearer for me the necessity to search for the "hot hand". Ranging/unprofitable pairs have to be skipped somehow. On the other hand, by doing that, you can miss the entry point for a great breakout.

One idea is, instead of concentrating on a single "hot hand", to skip the "cold hand(s)" and to continue trading the other 2-3 pairs.

@smikester: I saw some of your posts back in 2008, you are a living witness . Ten years later, what can you say about DIBS? Would you recommend it to a newbie looking for a simple and profitable strategy?
"The reason I was born and came into the world is to testify to the truth."
  • #11,251
  • May 9, 2018 3:10am May 9, 2018 3:10am
Quoting harvest3r
That's why it became much clearer for me the necessity to search for the "hot hand". Ranging/unprofitable pairs have to be skipped somehow. On the other hand, by doing that, you can miss the entry point for a great breakout. One idea is, instead of concentrating on a single "hot hand", to skip the "cold hand(s)" and to continue trading the other 2-3 pairs. @smikester: I saw some of your posts back in 2008, you are a living witness . Ten years later, what can you say about DIBS? Would you recommend it to a newbie looking for a simple and...
Hot hand is key. I use the 20 dma. If it has slope and the price has left it, then I will look for trades. I like smaller inside bars and it is possible to define these using ATR. Pile in hard when you see a good one. Leave the ranging ones alone. Look at yesterday's range. If you are trading inside that, you are usually wasting your time with this method.
Gone to a better place
  • #11,252
  • May 10, 2018 3:55am May 10, 2018 3:55am
Quoting smikester
{quote} Hot hand is key. I use the 20 dma. If it has slope and the price has left it, then I will look for trades. I like smaller inside bars and it is possible to define these using ATR. Pile in hard when you see a good one. Leave the ranging ones alone. Look at yesterday's range. If you are trading inside that, you are usually wasting your time with this method.
Sounds interesting. What do you mean by "the price has left it (the 20 dma)"? Does it mean that the previous daily bar didn't touch it anymore?

The only trouble I have with this approach is that, by the time you try to enter the trade, no IBs will come up and you simple miss the entire trend. Example: if you take the latest GBP selloff from 1.43 to 1.35, there was no DIBS entry point until 1.3678 (the others were either stopped or too late in the day). Imagine if there was a small valid IB inside a range, right before the big breakout, and you weren't trading!

But I understand your point. You may lose all your account trying to catch one single breakout which may never happen or take months to happen. I think I have to backtest what you described and see what comes up.
"The reason I was born and came into the world is to testify to the truth."
  • #11,253
  • May 10, 2018 5:36am May 10, 2018 5:36am
Quoting harvest3r
{quote} Sounds interesting. What do you mean by "the price has left it (the 20 dma)"? Does it mean that the previous daily bar didn't touch it anymore? The only trouble I have with this approach is that, by the time you try to enter the trade, no IBs will come up and you simple miss the entire trend. Example: if you take the latest GBP selloff from 1.43 to 1.35, there was no DIBS entry point until 1.3678 (the others were either stopped or too late in the day). Imagine if there was a small valid IB inside a range, right before the big breakout, and...
Yes, my personal definition is if the daily candles have left the 20dma. Then, how about 1.9 to 1.4? or 1.6 to 1.2? Using the 20ma, the monthly chart on cable is still in an up trend. Better if they all line up like Usd/Chf is starting to do.
Gone to a better place
  • #11,254
  • May 11, 2018 12:21am May 11, 2018 12:21am
Quoting harvest3r
{quote} Well, got stopped few hours later. The big trouble is to control the expectations/anxiety after so many failed tries. Now it's UJ turn, which is trading in a very narrow range (90 pips) for over a week. Had a nice breakout today. {image}
Have you thought of looking at the 4hr chart for entries?
  • #11,255
  • May 11, 2018 4:35am May 11, 2018 4:35am
Harvest3r what's going on with your trading?

Trading has been really slow this week. Just a few losses here and there. How's everybody else doing?
  • #11,256
  • May 11, 2018 1:27pm May 11, 2018 1:27pm
Hi guys,

no good news LOL no single winner trade in the last two weeks

But the worst is this: I managed to make some backtest on data from the last 9-10 years and the results so far are no good.

Here is a table with the number of pips won/lost for the entire year:

_PAIRS_ 2017 2016 2015 2014 2013 2012 2011 2010 2009
EUR_USD +400 -500 + 68 + 73 +202 - 87 + 82 +210 +296
USD_JPY +235 +538 -380 +249 +721 +484 -673 +285 +1339

One might say it's still profitable in the long term, but it's far from ideal. I can't imagine trading the entire year in 2016 and finish losing 500 pips on one pair! And one cannot know in advance if the current year will bring -500 or +500 pips, so you have to go through and take the risk (or drop the method completely).

One thing is to handle a "healthy" number of losses; another thing is to keep going blindly, down the hill. On the other hand, if we try to add indicators in order to avoid the drawdown, we miss the point of DIBS: simplicity.

I would like to bring to discussion the following chart (below). It's from Feb 3rd, 2016 to Aug 4th, 2016. Take heed, sirs: in that entire semester you would earn ONE winner in the first candle, ONE winner in the last one and ONE winner right in the middle (on May 13th). In between you would get 46 losses. We are talking about half of a year, waking up in the dark to trade for 10 hours and, in the end, lose around 800 pips. Would you still be there on Aug 4th? LOL

Of course the results on the table above are given for each individual pair - they won't be the "hot hand" everytime, so we can cut some losses. Still, I don't believe it will solve the problem of having an extremely long losing streak - even the single winner in May may go away.

So can anyone see anything wrong on this chart? Feel free to dismiss my post if it has already been discussed in the past.
Attached Image (click to enlarge)
Click to Enlarge Name: 20160201_EURUSD_D.png Size: 42 KB
"The reason I was born and came into the world is to testify to the truth."
  • #11,257
  • Edited 1:48am May 13, 2018 1:27am | Edited 1:48am
Quoting harvest3r
Hi guys, no good news LOL no single winner trade in the last two weeks But the worst is this: I managed to make some backtest on data from the last 9-10 years and the results so far are no good. Here is a table with the number of pips won/lost for the entire year: _PAIRS_ 2017 2016 2015 2014 2013 2012 2011 2010 2009 EUR_USD +400 -500 + 68 + 73 +202 - 87 + 82 +210 +296 USD_JPY +235 +538 -380 +249 +721 +484 -673 +285 +1339 One might say it's still profitable in the long term, but it's far from ideal. I can't imagine trading the entire year in 2016...
like i said many times, trading inside bars just because they are "abnormal bars" beliving that they have some sort of hidden secret or power is not profitable in fact almost all patterns don't have an edge/positive expentancy if you take them blindly. you need some context, some filters.

what is the point to short every ib setup on usd/jpy from 2012 to 2016?
what is the point to short every ib setup on usd/rub from 2013 to 2016?
what is the point to short every ib setup on usd/try from 2012 to present?
what is the point to go long every ib setup on eur/usd and/or gbp/usd from 2014 to 2015/2016?
what is the point to go long every ib setup on oil from 2014 to 2016?
just recent market history.

trading markets using lower timeframes and using publicly know trading patterns without knowing when to be long/short a market or whay this ib setup is better than the last in a particular market is the slow way to the poor house.
don't be disapointed, just backtest again:

define long term trend in a higher timeframe and take signals on lower timeframes (state of market filter nullish/bearish)
define some context/filter to tell you this ib is better than last one from a risk2reward pov (use toby crabel concetps nr4 or nr7 and take only that signals or bet a little more on them)
define some context/filter to analyse the bar before the ib ( for ex: the bar before the ib was an outside bar)
or just trow to the bin the state of the market (bullish/bearish doesn't matter) simple, take the breakout from ib only if the range of the ib was the lowest range in the last 20 bars in that trading timeframe
or ask1: the bar before the ib made the highest high/lowest low in 10 or 20 bars
or ask2: the bar before the ib made the highest high/lowest low in 10 or 20 bars and this ib is near the high/ low of last bar
or ask3: can i use ib to build positions in a percived trend (the volatility is not static, so if a trend last for 10 months for ex and you have 4 winners maybe one will be 2x risk, one 1x risk, one 1.7x risk and one 7x or 30x risk)
or ask4: should i place the stop at low/high of ib, the candle before ib, using atr as concept, at yesterday low/high or 2 days ago low/high.

take care and have fun backtesting
Price itself it's an indicator
  • #11,258
  • May 14, 2018 3:33am May 14, 2018 3:33am
Quoting harvest3r
So can anyone see anything wrong on this chart?
There is no clear trend. It's definitely not a "hot hand". harvest3r, with respect, you are missing the point of this strategy by a country mile.
Gone to a better place
  • #11,259
  • May 15, 2018 7:19am May 15, 2018 7:19am
Thanks for the reply, m3rlin.

Quoting m3rlin
{quote} like i said many times, trading inside bars just because they are "abnormal bars" beliving that they have some sort of hidden secret or power is not profitable in fact almost all patterns don't have an edge/positive expentancy if you take them blindly. you need some context, some filters.
As obvious as it seems, I still cannot be so sure of that. No, I don't think there is any "magic" on DIBS - there is only a feeling that the market has an intrinsic property: breakouts of any IB will tend to reach BE (and go beyond that) more often than not. In other words: real breakouts are more common that false ones, or at least bring more pips than the aggregated losses. The current testing results, so far, tend to prove that.


Quoting m3rlin
what is the point to short every ib setup on usd/jpy from 2012 to 2016?
Funny enough, the 2012-2016 was quite profitable for USD/JPY. So even if anyone would keep shorting valid IBs all the way up, it wouldn't hurt or even add some small profit.

When TheRealThing told about one 450:1 trade, I'm almost sure he entered it because, at some point, he "gambled" against the long-term trend and caught the turning point. That's why I still couldn't convince myself of trading only on one direction, as obvious as it sounds.


Why am I trying something so stupid like that? I remember PeterCrowns saying something like "simple is best". From my point of view, "simple" means: A) clear rules, B) minimum chart interpretation and C) no indicators (unless absolutely necessary). Right now I am reaching the limit on A), so now it's time to add some filters on the charts. But I want to be very careful with those filters. They have to be few and simple.


All said, I do believe that all your arguments are absolutely reasonable and even expect them to be true. I just want to prove each one of them to myself through numbers, by backtesting.
"The reason I was born and came into the world is to testify to the truth."
  • #11,260
  • May 15, 2018 8:20am May 15, 2018 8:20am
Quoting smikester
{quote} There is no clear trend. It's definitely not a "hot hand". harvest3r, with respect, you are missing the point of this strategy by a country mile.
Respect acknowledged. Sure you are right :-) but I'm still not that convinced about the "hot hand" interpretations.

The chart I posted is a Daily one. There are similar charts which were very profitable. So that's why I wanted to bring it to discussion.

When PeterCrowns mentioned the "hot hand", it's related to the previous week's close; he didn't mention any longer term trend/chart at that moment. He did say later: "If you are also in tune with the weekly and monthly trends is when it gets exciting!" So my understanding is that the tuning between short and long term trends is a bonus, not a rule/bias/filter for individual trades.

So I believe you are right regarding the necessity not to trade until the trend is absolutely clear, but my strict analysis of PC's post says that the trend is built during the current trading week. Is it right? Just want to be sure that this new rule will really bring an edge, so next task is to add it to my backtesting.

By the way, I didn't forget the dma20 stuff. It's even plotted on some of my charts. It's something I want to investigate further.
"The reason I was born and came into the world is to testify to the truth."
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