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The DIBS Method... No Free Lunch continues

  • #961
  • May 29, 2008 2:53am May 29, 2008 2:53am
Quoting Rocroy
Usually a MT trading method (which to my understanding DIBS mainly is) tries to give answers to questions like: what is the direction of the price, ie. trend, and what would be a good spot to enter.

DIBS uses daily open and price position against the daily open level as a tool for determining the trend. Not only a daily trend, but a long term trend, as DIBS profitability is based on those rare runners of several hundreds pips. Well, that does not feel very reliable way of determining the trend, does it?

The method of entering is IB, in the direction of the trend. Lets say that a pair is in uptrend, so the best way to enter is to buy on dips. Probably the developers of the method had noticed that price movement slows down when a dip is turning to uptrend again, and IBs are likely to be found there. But that is possible only if the dip bottom happens to be above the daily open level. That does not feel very effective either.

Both the way DIBS determines the trend, and entering practice are kind of "primitive" and error prone. There are far more better tools for determining trends and entries. For instance, using IBs may be a low risk entry method, but at the same time it brings along all the problems of noise, ie. one pip may stop your entry for a several hundred pip move.

In spite of the previous I believe that it is possible to make money using this method.

On the other hand, why to use DIBS, as there are better and more profitable tools to do the task?

R
Hi Rocroy,
Which better systems are you prepared to share?
PC has traded DIBS for some years (and still does), The Real Thing (who probably taught DIBS to PC) has been a pro trader for over 30 years - that gives me some confidence in DIBS. Perhaps i am just naive.

Ian
  • #962
  • Edited 3:06am May 29, 2008 2:55am | Edited 3:06am
Quoting Rocroy
On the other hand, why to use DIBS, as there are better and more profitable tools to do the task?

R
I absolutely agree and you made some valid points here. Although I donīt know what tools you are talking about, as this is a very personal thing too, most of the people here on board are looking for a strategy, that they can just trade.

That is also why they are asking the wrong questions. I see lots of discussion about the daily open and what time would be the appropriate one. Instead the question should be, why the open of the european exchanges was used and get to the right conclusion for trading asian currency pairs. I saw some here, who did that, which is the right approach.

I also tried to point out, that IBs occur pretty often early in the retracement, which results in a late entry in the move to the next high/low. That is why this system gets stopped out again. A logical approach is, to split the main lot into 3 lots instead of two and locking in some profit, if the SL for the "free ride" is hit. That makes it easier to wait for the "big move". Otherwise it lowers the leverage once your in this big move. Thats the other side of the deal.

The main key is, to see the bigger picture. This is a great chance to get it as there are no fance indicators involved. Itīs just price action and timing. You just got to look for a couple different things to be able to understand the method and realize why it will work on the long term and when its probably not working. These things are for example:

- what trend are we in (daily open is used here as an indicator, not the perfect one though)
- when does the big money come into the market (daily open as well, when London and Frankfurt wake up, there is a good chance for a good move)
- how is the situation on a bigger TF (are we trading countertrend - please note that a retracement on a daily TF is a tradable trend on the 1h TF, so although your trading against the trend of the higher TF, you have a good chance to make profits, as a retracement on a higher TF is a trend on its own on a lower TF)

The key point is to realize, how momentum comes into the market and where its likely to occur. I read a fantastic book about that. Unfortunately its in German.
  • #963
  • May 29, 2008 3:01am May 29, 2008 3:01am
Quoting ianf0ster
Hi Rocroy,
Which better systems are you prepared to share?
PC has traded DIBS for some years (and still does), The Real Thing (who probably taught DIBS to PC) has been a pro trader for over 30 years - that gives me some confidence in DIBS. Perhaps i am just naive.

Ian
It's obvious that it works for PC because he knows how to use it, which setups are better than others and so on. But then again, thats the good thing about any strategy, if you understand your strategy inside and out and it's a solid winner than you have found your edge. For us we are still learning and the more we trade it the more we will learn, if in the end we find that it doesn't suit us than fine. To say that there are better ways to trade is to me nonsaying, if you have better ways then why are you waisting your time? This is not the best method out there, especially not for everyone.
  • #964
  • May 29, 2008 3:04am May 29, 2008 3:04am
Quoting ianf0ster
Hi Rocroy,
Which better systems are you prepared to share?
PC has traded DIBS for some years (and still does), The Real Thing (who probably taught DIBS to PC) has been a pro trader for over 30 years - that gives me some confidence in DIBS. Perhaps i am just naive.

Ian
Ian,

You are not naive in thinking that the system works. It works, thatīs why they shared it. Itīs easy, itīs simple and it works. But PC also stated that he has entry methods with a 5 times higher ratio than IB. He didnīt share that one.

Question is why? Answer comes pretty easy - itīs not so easy to understand. Itīs discretionary. You canīt give a certain pattern that people should act on. It is the bigger picture that makes the difference. IB works without having the bigger picture. Once you have it though you can profit more from it.

Trade this method and you will learn and realize, what trades work better. That will take some time. I try to give hints here and explain things. Itīs pretty frustrating though to see, that no one really seems to care (there is one exception, who sent me a PM), but usually the next post after mine is - "What time do you use for the daily open - my understanding was......"

Again - itīs the wrong question, if you want to get your own edge. But again, you donīt need that, if you follow these rules. You donīt need an own edge as this system has an edge, but donīt expect major profits but do expect drawdowns, but also trust the system - because it works

Happy trading to all of you
  • #965
  • May 29, 2008 3:10am May 29, 2008 3:10am
I'm sure everyone is looking at this one...
Attached Image (click to enlarge)
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  • #966
  • May 29, 2008 3:12am May 29, 2008 3:12am
Quoting jarroo
Gbp/Jpy 0400 IB off the 0500 Open. Entered short at 207.29
Current "free trade" ( 21 pips + 9 spread). Looking to build on the next IB.
Attached Image
Indicators show the past. Price Action "Indicates" the future.
  • #967
  • May 29, 2008 3:14am May 29, 2008 3:14am
This thread is going to turn into yet another perfect example of the "forum phenomenon".

A simple, clear and straightforward something gets "processed" by the usual fear, filter and nonsense mongering(let's use the pair with the biggest spread instead of the one with the smallest, let's make an EA for something that works better with discretion(s/r etc), let's find a way to prevent all losers because I'm afraid of losses and don't understand that trading is about profit not winners or losers) and churned into unrecognizeable nonsense..

I find it fascinating that this happens not only everywhere, but also over and over again.

But it does make it crystal clear where the problem lies between traders and between trader progression.

I stopped reading this thread really pretty swiftly once I realized that all you need is Peter's posts in the original thread. Since I didn't cancel the sub yet it keeps popping up though, so I glanced again. Still the same stuff going on.
If instead of an "aha" moment a need for discussion arises, it's already gone wrong. Which makes me wonder - sorry Jarroo, this isn't directed at you, I'm actually glad you started this thread since it made me aware of and look at the original - why these things("advanced discussions") actually perpetuate themselves for so long..

I think the common FF thread logic is: if it's recognized by someone(the potential, the logic and the application sense), it will be used and adapted. If it isn't, it will be "discussed" (i.e. usually mutilated and arguments produced).

I'm not saying there's no sense in having a thread about a system. I'm saying the way threads DO develop most of the time has no sense.
Examples and backtest data should ideally be provided by those proficient(Peter's done that over in the original thread sufficiently for me to believe him).
Posting additional examples is alright(the J16 thread lives on that since it constantly demonstrates what where why), but the risk is always of things turning into a "journal and advice for everyone" ("took this trade at x, now have y, what do others think"). And the "processing" I've already mentioned and explained above.

IMHO all you really NEED is the presentation and getting the "click" of understanding. The mutilation bit is just sad to watch, so unsubscription is next.
Trust price. Know yourself.
  • #968
  • May 29, 2008 3:17am May 29, 2008 3:17am
Quoting DaBuschi
Itīs pretty frustrating though to see, that no one really seems to care (there is one exception, who sent me a PM), but usually the next post after mine is - "What time do you use for the daily open - my understanding was......"

By the way... What time do you use for the daily open?

Just kidding!

Again, "the Daily Open Monster"...

Agree with you, DaBuschi... sometimes we are so deviating of the essence of the thread... but it's human nature. As you said, we must make here (and to ourselves first!) the right questions...

zum Wohl!

HT
Many share my views with me. But I don't share them with them...
  • #969
  • May 29, 2008 3:18am May 29, 2008 3:18am
Ian, I don't think you are naive, PC and TheRealThing are imo real and i also believe they have been profitable over the years using DIBS kind of methods.

What is my solution then? On 4h / daily chart determine trend simply using trendlines. If you know how to draw them, they will serve you very well. For entries, on a shorter tf, use trendlines again, or stochs. Check one of my charts to see what stoch settings i'm using.

For stops, I use trendline based ea, which closes positions if tl is crossed. At the same time this tl defines my targets. This means that in principle positions could be open as long as the 4h trend lasts.

Is this profitable? This very simple approach has given in last two days 9.8% profit on four majors and EJ. Each position is roughly 1% of the balance. Max number of open positions at the same time during these two days was 8.

R

Quoting ianf0ster
Hi Rocroy,
Which better systems are you prepared to share?
PC has traded DIBS for some years (and still does), The Real Thing (who probably taught DIBS to PC) has been a pro trader for over 30 years - that gives me some confidence in DIBS. Perhaps i am just naive.

Ian
  • #970
  • May 29, 2008 3:23am May 29, 2008 3:23am
I think TheRealThing also send a very similar post on this subject. Sad but true.

Quoting SeekingLight
This thread is going to turn into yet another perfect example of the "forum phenomenon"...

The mutilation bit is just sad to watch, so unsubscription is next.
  • #971
  • May 29, 2008 3:42am May 29, 2008 3:42am
Quoting SeekingLight
I'm not saying there's no sense in having a thread about a system. I'm saying the way threads DO develop most of the time has no sense.
Examples and backtest data should ideally be provided by those proficient(Peter's done that over in the original thread sufficiently for me to believe him).
Posting additional examples is alright(the J16 thread lives on that since it constantly demonstrates what where why), but the risk is always of things turning into a "journal and advice for everyone" ("took this trade at x, now have y, what do others think"). And the "processing" I've already mentioned and explained above.


To me, the essence of this thread is: Why PC and TRT, traders that have been on the market for so long, use this amazingly simple system? What are the other factors they take (the discretionary factors) to do it for so long?

It may not seem at first, but it's a very deep question...
Many share my views with me. But I don't share them with them...
  • #972
  • May 29, 2008 3:44am May 29, 2008 3:44am
Quoting SeekingLight
This thread is going to turn into yet another perfect example of the "forum phenomenon".
Dear SeekingLight

Absolutely right !

Learn the system, apply it, keep it simple.

The inherent Reward : Risk advantages of DIBS can make it a profitable system if you just apply the basic rules.

Try to optimise it to death and it becomes totally counter-productive.

Instead, if we just use the forum to swap IB setups we see, and share those ideas, we are much more likely all to profit from applying Peter's DIBS principles in action in the market.

Best regards, Loudoniii
.
  • #973
  • May 29, 2008 3:55am May 29, 2008 3:55am
Quoting jarroo
Current "free trade" ( 21 pips + 9 spread). Looking to build on the next IB.
Price sometimes tests my discipline. To see if I will jump the gun and stop myself out. I just laugh and say "bring it!"
Attached Image
Indicators show the past. Price Action "Indicates" the future.
  • #974
  • May 29, 2008 3:56am May 29, 2008 3:56am
Quote
Ian, I don't think you are naive, PC and TheRealThing are imo real and i also believe they have been profitable over the years using DIBS kind of methods.

What is my solution then? On 4h / daily chart determine trend simply using trendlines. If you know how to draw them, they will serve you very well. For entries, on a shorter tf, use trendlines again, or stochs. Check one of my charts to see what stoch settings i'm using.

For stops, I use trendline based ea, which closes positions if tl is crossed. At the same time this tl defines my targets. This means that in principle positions could be open as long as the 4h trend lasts.

Is this profitable? This very simple approach has given in last two days 9.8% profit on four majors and EJ. Each position is roughly 1% of the balance. Max number of open positions at the same time during these two days was 8.

Good post R.


I think some professional traders are alwayz out to discourage newbies to trade profitably once they ascertained that a profitable method has been publicly given, they get amazed frustrated bcoz they have been profiting at taking advantage of newbies, selling unreliable methods and indicators whereby newbies lose their hard-earned money.


For goodness sake, y this confusing and conflicting post about it this method works, wot's the daily open, wot's this and wot's dat?

I know that this method work for real and for me, i have started trading live with it and i haven't been dissapointed.

every method has its discretional aspect and that's y we don't have same result. enough of this confusion! commotion!

Thanks to Dabuch for easily clarifying wot's an IB, when it happens and the ones we should be gunning for.

To any new person on this forum, plz just use wotever method you know in determining the trend and go in the direction of trend when IB is spotted and don't mind the distractors we have here,

their aim, is to try to be technically analytical as they can to get PM from newbies who are always falling prey.

test this method and use wotever you feel works best with it and trust it as possible as you can, then read PC post again to see how he trades Ib and wot currency pairs he trades with

and if u r still confused, go to babypips forum and look for james thread titled 40-100pips a day.......

we have so many enemies in fx, the big boys and some successful but greedy professional traders that won't want newbies to grow!

watch out for them, they r confusionist
  • #975
  • May 29, 2008 4:00am May 29, 2008 4:00am
Quoting jarroo
Price sometimes tests my discipline. To see if I will jump the gun and stop myself out. I just laugh and say "bring it!"

Come on baby bring it!
Attached Image
Indicators show the past. Price Action "Indicates" the future.
  • #976
  • May 29, 2008 4:01am May 29, 2008 4:01am
spotted GU IB at 5 EST
Attached Image (click to enlarge)
Click to Enlarge Name: gu.gif Size: 16 KB
  • #977
  • May 29, 2008 4:04am May 29, 2008 4:04am
Usd/Jpy trade doing great.
Attached Image
Indicators show the past. Price Action "Indicates" the future.
  • #978
  • May 29, 2008 4:05am May 29, 2008 4:05am
Quoting jarroo
Price sometimes tests my discipline. To see if I will jump the gun and stop myself out. I just laugh and say "bring it!"
Jarroo...in all the DIB chasing...you've overlooked that that was a PB + IB = perfect idea to go long

Take care all
Trust price. Know yourself.
  • #979
  • May 29, 2008 4:06am May 29, 2008 4:06am
Quoting jarroo
Come on baby bring it!
Stopped out. Break even. We will meet again Gbp/Jpy.
Attached Image
Indicators show the past. Price Action "Indicates" the future.
  • #980
  • May 29, 2008 4:09am May 29, 2008 4:09am
Quoting SeekingLight
Jarroo...in all the DIB chasing...you've overlooked that that was a PB + IB = perfect idea to go long

Take care all

The 4 hour showed potential bearish Price Action. Gbp/Jpy is a crazy chick.
Attached Image
Indicators show the past. Price Action "Indicates" the future.
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