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  • #2,441
  • Jun 20, 2008 10:55am Jun 20, 2008 10:55am
Quoting billbss
That would seem to be a contradiction. He may have been talking about a strong trend on a higher time frame.
This is what someone asked Peter in the other thread:

At the beginning of each trading session, when price is moving just under or above (sometimes both) yesterday's close, do you look for breakouts in one direction? both directions?

And Peter's reply:

Yes, at this point I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

These trades have the MOST potential for the day. Think TREND DAY!


Maybe I'm not unsertanding what Peter is saying but sounds like close to open = greatest potential...

But at this point the market hasn't shown any strength or weakness so hence my confusion
  • #2,442
  • Jun 20, 2008 10:58am Jun 20, 2008 10:58am
Quoting billbss
Look at the 4H on GBP/USD.
There is a strong down trend since Mar. 14. There is a pronounced up trend since June 18, 0400GMT.

How would you trade it? On any chart there is contradictory evidence regarding which trend we're in.
I understand the concept of different trends on different timeframes...took me a while to get my head around it when I first started but the point I was making was different...see previous post
  • #2,443
  • Jun 20, 2008 11:00am Jun 20, 2008 11:00am
Quoting bobbybrown
This is what someone asked Peter in the other thread:

At the beginning of each trading session, when price is moving just under or above (sometimes both) yesterday's close, do you look for breakouts in one direction? both directions?

And Peter's reply:

Yes, at this point I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

These trades have the MOST potential for the day. Think TREND DAY!


Maybe I'm not unsertanding what Peter is saying but sounds like close to open = greatest potential...

But at this point the market hasn't shown any strength or weakness so hence my confusion
That's the basic rule of the system.

I don't think that answers his remark about buying in strong bull markets and selling in strong bear markets.

I think he's talking about two different things.
  • #2,444
  • Edited 11:34am Jun 20, 2008 11:12am | Edited 11:34am
I'm still confused Bill

In my head I see a big contradiction between the 2 thoughts...How can we consider being or selling a pair that is still around the open when others must have moved already?...Wouldn't this pair be playing catchup which is something Peter said not to consider trading?

Like I said it's probably my lateral thinking brain over complicating thisngs but would be good to have clarity on the matter...things like this always play at the back of my mind and drive me crazy until I understand

Bobby

*EDIT* maybe the key here is at the beginning of the session. Price has to be at or close to the open! At this point a trend wouldn't have been formed yet. Anyone else have any thoughts on this?
  • #2,445
  • Jun 20, 2008 11:50am Jun 20, 2008 11:50am
Quoting bobbybrown
Price has to be at or close to the open!
Where does it say that?

Read again:

Quote
I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

It's ABOVE or BELOW, not "close to". Maybe you've misunderstood his mention of "yesterday's close"...

The inside bar has a range, sometimes it can be, indeed, so close to the 6:00 am open that both sides of the bar can be considered as a breakout point, but also it can be far away, the point here is, if the range of the IB is ABOVE the price of the open bar at 6:00 am, only longs are to be considered, and if the range of the IB is BELOW that price, only shorts.

Example:
open price 1.9450
IB range: high 1.9525 low 1.9490
Price range is ABOVE open price. So we place longs at the breakout point (high of the IB range)

The inverse for shorts.
  • #2,446
  • Jun 20, 2008 11:54am Jun 20, 2008 11:54am
Quoting billbss
That's the basic rule of the system.

I don't think that answers his remark about buying in strong bull markets and selling in strong bear markets.

I think he's talking about two different things.
My undestanding in relation to this method is by inference to what Pete has said - 1. buy the stronger currency/ sell the weaker. 2. Its a hot hand if the weekly is in same direction to the daily/hourly signal. I suppose you get days/weeks/months when markets are bullish or bearish generally, so in a bull market you wouldn't be wanting to sell!! We see that in the stockmarkets, similar concept!

Hope above makes sense!

Pardy
  • #2,447
  • Jun 20, 2008 1:08pm Jun 20, 2008 1:08pm
Quoting HouseTrader
Hey moneda, you'll burn in trader's hell if you stretch the method this way and don't read the thread!.... Just kidding, man!

No sir, if you got an IB in the daily direction you may take it IN THE SAME DIRECTION, but if that IB is formed on late hours, after reaching or exceeding the daily range, that would be a low probability trade, so, take your discretion, take smaller positioning, take some shortcuts to get soon a free ride, whatever you may use to MINIMIZE your risk. That's what trading is about, besides patience. You cut your losses, the profits take care of themselves... I, personally, am very inclined to don't take such a trade. Remember, if you have a good reason (like exceeding range, strong S/R, those Fibs stuff that my medical brain doesn't understand, your guts...) to don't take the trade, be sitting on your itching hands... there will be another better chance soon.

But taking a "correction" IB is not DIBS... there are some other methods of playing corrections, but not DIBS...

Hope that helped....

Cheers

HT

Hey Doc!

Do you have a special lotion for itchy hands?

I will not go to trader's hell because..... I continue to read and reread PC's posts....

Seriously though, your points are well taken. Thank you for taken the time to help.
Unus pro omnibus, omnes pro uno
  • #2,448
  • Jun 20, 2008 1:33pm Jun 20, 2008 1:33pm
This is what someone asked Peter in the other thread:

At the beginning of each trading session, when price is moving just under or above (sometimes both) yesterday's close, do you look for breakouts in one direction? both directions?

And Peter's reply:

Yes, at this point I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

These trades have the MOST potential for the day. Think TREND DAY!

I know that above open = look to buy and below open = look to sell.

But my remark and indeed Peter's reply was regarding a specific situation. At this point we don't know if it's a strong market as price is still 'just under or above (sometimes both) of yesterdays close'.

Maybe I'm not maiking myself clear (I do have a habit of over complicating things). At this point...the begining of the session...price just above/under/both of open...How do we know if it's a strong/weak market if IB is just above/below respectively near the open of the session? But Peter in a round about way says (I think he does anyway) these have most potential even though the market hasn't moved drastically yet...maybe this is one of his sectrets I don't know.

Any ideas? Anyone?

Bobby
  • #2,449
  • Jun 20, 2008 1:47pm Jun 20, 2008 1:47pm
Quoting bobbybrown
This is what someone asked Peter in the other thread:

At the beginning of each trading session, when price is moving just under or above (sometimes both) yesterday's close, do you look for breakouts in one direction? both directions?

And Peter's reply:

Yes, at this point I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

These trades have the MOST potential for the day. Think TREND DAY!

I know that above open = look to buy and below open = look to sell.

But my remark and indeed Peter's reply was regarding a specific situation. At this point we don't know if it's a strong market as price is still 'just under or above (sometimes both) of yesterdays close'.

Maybe I'm not maiking myself clear (I do have a habit of over complicating things). At this point...the begining of the session...price just above/under/both of open...How do we know if it's a strong/weak market if IB is just above/below respectively near the open of the session? But Peter in a round about way says (I think he does anyway) these have most potential even though the market hasn't moved drastically yet...maybe this is one of his sectrets I don't know.

Any ideas? Anyone?

Bobby
Peter defines an "up day" as price being above the 0600GMT open. A "down day" as price being below the 0600 GMT open.

We'll talk about longs. If early in the day (remember the "day" begins at 0600) a breakout occurs above the 0600 open, Peter says this is a good potential trade, because the day has just begun.

When they occur later in the day, odds are price has gone up all day and the run is exhausted. There may not be much movement left. Also, IBs are rare after price starts moving in a trend..

All he's saying is that an early breakout has more money making potential than one later in the day.

Look at a chart of a big trending day and you'll see what I mean.
  • #2,450
  • Jun 20, 2008 2:05pm Jun 20, 2008 2:05pm
Quoting bobbybrown
But Peter in a round about way says (I think he does anyway) these have most potential even though the market hasn't moved drastically yet...maybe this is one of his secrets I don't know.

Any ideas? Anyone?

Bobby
The only idea that I could relate to this is the fact that, usually (at least on GBPUSD you can see it quite strongly) there is a huge "surge" in prices around 5:45-6:10 GMT, that occurs generally in the same direction of the trend of the day. So the potential is precisely this, the fact that Europe/London markets just open and volumes are higher so the strength or weakness of a currency is more visible at that time. Of course this will vary depending on news and other factors, but if you go back and check you will see that just before the "open" time there is a strong directional movement that seems to define the possible continuation.
  • #2,451
  • Jun 20, 2008 2:13pm Jun 20, 2008 2:13pm
Quoting billbss
Peter defines an "up day" as price being above the 0600GMT open. A "down day" as price being below the 0600 GMT open.

We'll talk about longs. If early in the day (remember the "day" begins at 0600) a breakout occurs above the 0600 open, Peter says this is a good potential trade, because the day has just begun.

When they occur later in the day, odds are price has gone up all day and the run is exhausted. There may not be much movement left. Also, IBs are rare after price starts moving in a trend..

All he's saying is that an early breakout has more money making potential than one later in the day.

Look at a chart of a big trending day and you'll see what I mean.
Oh OK

But I suppose downside to this is that there may be a few stop losses hit before the market does move...but I guess thats all part of getting in early...with low risk and potentially high reward...fair trade off.

Thanks for your patience and effort...I've been a bit of a hog posting so much today. so note to self shhhhhhhhhhh

Bobby
  • #2,452
  • Jun 20, 2008 2:29pm Jun 20, 2008 2:29pm
Quoting bobbybrown
This is what someone asked Peter in the other thread:

At the beginning of each trading session, when price is moving just under or above (sometimes both) yesterday's close, do you look for breakouts in one direction? both directions?

And Peter's reply:

Yes, at this point I am looking to buy above an inside hourly bar where the breakout point is above yesterday's close (and today's open) or sell below the low of an hourly inside bar below the open of today.

These trades have the MOST potential for the day. Think TREND DAY!

I know that above open = look to buy and below open = look to sell.

But my remark and indeed Peter's reply was regarding a specific situation. At this point we don't know if it's a strong market as price is still 'just under or above (sometimes both) of yesterdays close'.

Maybe I'm not maiking myself clear (I do have a habit of over complicating things). At this point...the begining of the session...price just above/under/both of open...How do we know if it's a strong/weak market if IB is just above/below respectively near the open of the session? But Peter in a round about way says (I think he does anyway) these have most potential even though the market hasn't moved drastically yet...maybe this is one of his sectrets I don't know.

Any ideas? Anyone?

Bobby
...well, we don't know (Peter probably does ) It's best not to over analyse this imo.

Our focus is on getting the orders in to cover both sides of the early IBs you describe, for the market to pick up in whatever direction. Having 'hot hand' clues before these IB straddles trigger, might help determine size for the trade, but beyond that we're gambling on a trend for the day developing.

Peter suggests that consistently applying this 'edge' works....well.
  • #2,453
  • Jun 20, 2008 2:38pm Jun 20, 2008 2:38pm
Quoting ChowClown
...well, we don't know (Peter probably does ) It's best not to over analyse this imo.

Our focus is on getting the orders in to cover both sides of the early IBs you describe, for the market to pick up in whatever direction. Having 'hot hand' clues before these IB straddles trigger, might help determine size for the trade, but beyond that we're gambling on a trend for the day developing.

Peter suggests that consistently applying this 'edge' works....well.
I'm going to try to find out if it works this weekend.
I have a hunch it doesn't. I see too many full stop outs. With the MM method of scaling out 1/2 the trade at 1:1, it takes a sizable run to get back what is lost in the stop outs.

I like the idea of this, and I hope I'm wrong. I hope it's profitable.
  • #2,454
  • Jun 20, 2008 3:28pm Jun 20, 2008 3:28pm
Quoting billbss
I'm going to try to find out if it works this weekend.
I have a hunch it doesn't. I see too many full stop outs. With the MM method of scaling out 1/2 the trade at 1:1, it takes a sizable run to get back what is lost in the stop outs.

I like the idea of this, and I hope I'm wrong. I hope it's profitable.
...without testing thoroughly (and note PC's comments about backtesting DIBs) my guess is that taking every IB would result in a downward equity curve over a decent sample of trades.

Peter's advice on what to filter the IBs against (first 9-10hrs of session, "hot-hand", range covered pre-IB vs ADR for the pair etc) are some of the keys to unlocking the positive expectancy of the approach. If he had decided to keep posting about DIBs, he might have described which particular IB breakouts were better than others.

If you manage to test every IB, the results will be very interesting to note. Many thanks in advance for your effort.
  • #2,455
  • Jun 20, 2008 3:36pm Jun 20, 2008 3:36pm
Quote
I'm going to try to find out if it works this weekend.
I have a hunch it doesn't. I see too many full stop outs. With the MM method of scaling out 1/2 the trade at 1:1, it takes a sizable run to get back what is lost in the stop outs.

I like the idea of this, and I hope I'm wrong. I hope it's profitable.

Hello bill, when will you stop confusing newbie! for Goodness sake this system works and stop pre-empting wrongly.

I hope it's profitable

It is, and it will alwayz because its price action.
  • #2,456
  • Jun 20, 2008 3:37pm Jun 20, 2008 3:37pm
Quoting ChowClown
...without testing thoroughly (and note PC's comments about backtesting DIBs) my guess is that taking every IB would result in a downward equity curve over a decent sample of trades.

Peter's advice on what to filter the IBs against (first 9-10hrs of session, "hot-hand", range covered pre-IB vs ADR for the pair etc) are some of the keys to unlocking the positive expectancy of the approach. If he had decided to keep posting about DIBs, he might have described which particular IB breakouts were better than others.

If you manage to test every IB, the results will be very interesting to note. Many thanks in advance for your effort.

I'll try and be sure to complete at least one pair.
Which would you prefer? I'm thinking GBP/USD.

The "first 9 or 10 hours of the session" confuses me a little.
A session only lasts nine hours. "the first 9 or 10 hours" would be the whole session.
  • #2,457
  • Jun 20, 2008 3:38pm Jun 20, 2008 3:38pm
Quoting Naijafx
Hello bill, when will you stop confusing newbie! for Goodness sake this system works and stop pre-empting wrongly.

I hope it's profitable

It is, and it will alwayz because its price action.
Then you have already backtested it!! You had to if you know it's profitable.

Publish your results and save me the trouble.
  • #2,458
  • Jun 20, 2008 3:42pm Jun 20, 2008 3:42pm
Quoting billbss
I'll try and be sure to complete at least one pair.
Which would you prefer? I'm thinking GBP/USD.

The "first 9 or 10 hours of the session" confuses me a little.
A session only lasts nine hours. "the first 9 or 10 hours" would be the whole session.
Hi Bill, Peter posted he had a preference for GBP/USD (from memory), so might be a good place to start.

...yep, IBs from 6am - 4pm, so session(s)...apologies.

Good luck.
  • #2,459
  • Jun 20, 2008 4:00pm Jun 20, 2008 4:00pm
Quoting ChowClown
Hi Bill, Peter posted he had a preference for GBP/USD (from memory), so might be a good place to start.

...yep, IBs from 6am - 4pm, so session(s)...apologies.

Good luck.
Here are the rules I'll use.
If you see any problem with any of them, let me know.

Begin- 0600 GMT
End 1600 GMT

IB must be the previous bar.
1 pip is considered a breakout.
SL is 1 pip the other side of the IB.

Will take two trades on a single IB only if a reversal occurs on the initial bar and only if it meets the above/below opening price rule.

1/2 of trade is closed at 1:1

remainder is closed out at 1600GMT, if not stopped out first.

Anything else?
  • #2,460
  • Jun 20, 2008 4:13pm Jun 20, 2008 4:13pm
Quoting billbss
Here are the rules I'll use.
If you see any problem with any of them, let me know.

Begin- 0600 GMT
End 1600 GMT

IB must be the previous bar.
1 pip is considered a breakout.
SL is 1 pip the other side of the IB.

Will take two trades on a single IB only if a reversal occurs on the initial bar and only if it meets the above/below opening price rule.

1/2 of trade is closed at 1:1

remainder is closed out at 1600GMT, if not stopped out first.

Anything else?
I'm late to the discussion and have just read through what I missed today and will give some inputs soon. Just a quick answer to this question: You don't close the remainder at 1600GMT, why would you do that? We are looking for runners here... Here's where you have to use your discression in how you trail this, but you'll never just close a trade. You let the trade run it's course.
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