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The DIBS Method... No Free Lunch continues

  • #3,161
  • Edited 5:47am Jun 27, 2008 4:41am | Edited 5:47am
Hello,

The g/u has been experiencing since its IB @ 3gmt a series of ups and downs that I like to call The Yoyo Dance. So in a case like this I have decided(for the time being I am bias short due to the strong resistance @ 1.9900) that I will continue to trade the breakouts (since the stoploss based on the IB is relatively tight) but I reduced my entry by 50% until the market makes up his mind...when that happens and I detect a strong momemtum, I will restore my regular # of units based on my moneymanagement formula that I learned from Feb2865:

The money in your account X % of Risk X 10k units / Stoploss= #of units traded.

Unus pro omnibus, omnes pro uno
  • #3,162
  • Jun 27, 2008 5:06am Jun 27, 2008 5:06am
IB on GJ is huge so not liking that. Maybe consider GU up or down (i think will go up) or short on UC?
  • #3,163
  • Jun 27, 2008 5:09am Jun 27, 2008 5:09am
Just now Long setup on EUR_GBP...
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp.gif Size: 16 KB
  • #3,164
  • Jun 27, 2008 5:26am Jun 27, 2008 5:26am
Ops, I did it again....

anyone on the Japan Airlines? Caught it earlier on the 30M .....

To the brave ones, IB on Swiss Air... personally, I'll not mess with it, I'm holding my flight from tomorrow and fridays are not my preferred DIBS day (kind of lack of "fuel" in the market... big guys will be shutting off their screens soon....)

Cheers!

HT
Many share my views with me. But I don't share them with them...
  • #3,165
  • Edited 5:47am Jun 27, 2008 5:32am | Edited 5:47am
Quoting HouseTrader
Ops, I did it again....

anyone on the Japan Airlines? Caught it earlier on the 30M .....

To the brave ones, IB on Swiss Air... personally, I'll not mess with it, I'm holding my flight from tomorrow and fridays are not my preferred DIBS day (kind of lack of "fuel" in the market... big guys will be shutting off their screens soon....)

Cheers!

HT
Hey Doc,

I may need some motion sickness medication with the g/u ..long with50% of my normal entry and we will see if it breaks 1.9900...
Unus pro omnibus, omnes pro uno
  • #3,166
  • Jun 27, 2008 5:38am Jun 27, 2008 5:38am
Anyone in on the USDCHF right now, its a good example of the ib breaking the wrong way. Trend is down, candle has broken to the top of the ib. Consensus seems to be to still await your entry to be triggered in the right direction....so I'm waiting....thoughts?
  • #3,167
  • Jun 27, 2008 5:41am Jun 27, 2008 5:41am
Quoting glynnt
Anyone in on the USDCHF right now, its a good example of the ib breaking the wrong way. Trend is down, candle has broken to the top of the ib. Consensus seems to be to still await your entry to be triggered in the right direction....so I'm waiting....thoughts?
Glynnt,

My thought is that is no a PC trade..way below the daily open ...trend is down.
Unus pro omnibus, omnes pro uno
  • #3,168
  • Jun 27, 2008 5:47am Jun 27, 2008 5:47am
Yes, thats my point, its broken the wrong way, so I'm still waiting for it to break the right way i.e. down, so that I can make the trade
  • #3,169
  • Jun 27, 2008 5:51am Jun 27, 2008 5:51am
Quoting glynnt
Yes, thats my point, its broken the wrong way, so I'm still waiting for it to break the right way i.e. down, so that I can make the trade
Glynnt,

Just wanted to confirm that what you were thinking I was also thinking and others may be thinking the same although we may
find other thoughts from other people thinking.
Unus pro omnibus, omnes pro uno
  • #3,170
  • Jun 27, 2008 6:04am Jun 27, 2008 6:04am
Hmm, what do you think Moneda/anyone, it never triggered and now we have a new candle...is the ib cancelled?
  • #3,171
  • Jun 27, 2008 6:09am Jun 27, 2008 6:09am
Quoting bobbybrown
I'm just thinking out loud here.

I understand that an IB represents indecision and if you switch to a lower TF you wil most likely see a triangle which acts as a compressed spring pushing the price on its break. Hence why we trade the IBs.

Now someone...I don't remember who...posted in a previous post (think it was HouseTrader) that if the IB is broken on the wrong side (i.e. price is up for the day and the IB is broken down) he discards the IB and looks for another. To me this just simbolises a channel/flag rather than a triangle and a breakout of this (the IB) should be just as valid...[*EDIT* In the direction of the day (above/below open buy/sell respectively)]

Any thoughts anyone?

Bobby
Looking back, it does seem to work even after the IB was broken in the wrong direction. I'm going to check it out a bit more. However, logically, it makes sense to discard the IB once its broken in the wrong direction.

First, it makes you need to widen your stop loss after your entry. If you look at the original posts by PC in the first thread, in some of his examples he mentioned he'd take the IB entry anyway but he'd widen his stop to the new swing high(if youre short) or new swing low(if you're long). This means you'll need to increase your B/E point.

Second, the ensuing breakout in the right direction might not have as much steam as when price gets trapped in a tight little range(hence the IB forming), and then it breaks out in one direction and all the subsequent orderflow leads to a nice strong breakout.

So I'd say for higher probability setup, and better risk reward, you discard the IB. But those are just my thoughts for now... I'm actually going to review how other IB's like this played out once they actually got triggered.
- nick andre -
  • #3,172
  • Jun 27, 2008 6:10am Jun 27, 2008 6:10am
Quoting moneda
Hey Doc,

I may need some motion sickness medication with the g/u ..long with50% of my normal entry and we will see if it breaks 1.900...
Hey, Moneda.... some anti-YOYO pills?

I posted it some time ago... PC trades only the 4 major, that includes the damn GBP... but, personally, I got burned sometimes (too many times...) with it, and I just quited trading it... I'm only on EUR, CHF and JPY....and they've been nice to me... It's a kind of a trauma.... still working it out with my shrink....

But pleeeease, don't take it as advice! I really admire who master the GBP beast, maybe some day I'll be able too...

Keep practicing, I'm sure you can ride this wild horse!

Cheers!
Many share my views with me. But I don't share them with them...
  • #3,173
  • Jun 27, 2008 6:14am Jun 27, 2008 6:14am
Quoting HouseTrader
Hey, Moneda.... some anti-YOYO pills?

I posted it some time ago... PC trades only the 4 major, that includes the damn GBP... but, personally, I got burned sometimes (too many times...) with it, and I just quited trading it... I'm only on EUR, CHF and JPY....and they've been nice to me... It's a kind of a trauma.... still working it out with my shrink....

But pleeeease, don't take it as advice! I really admire who master the GBP beast, maybe some day I'll be able too...

Keep practicing, I'm sure you can ride this wild horse!

Cheers!
Hi Doc, just wondering i have you right, are you saying you dont trade Cable at all with this method...???
  • #3,174
  • Jun 27, 2008 6:14am Jun 27, 2008 6:14am
Hey all, I havenīt really replied to much but Iīve been using this method and following it for a while...

I think itīs fine to take the IB coming back the other way, personally I would use the same price as I think itīs that end of the bar that was congested. On the other hand I think thereīs a danger of taking it too late. Remember, the later you take your trade the less waves youīre able to catch before the end of the day before it goes flat.
  • #3,175
  • Edited 6:43am Jun 27, 2008 6:15am | Edited 6:43am
Take a look at the daily chart before you decide to be more aggressive or not.

That is what I do, also is volatility increasing or decreasing, you can generally be more aggresive in an market that is increasing in volatility like it was yesterday, New York will open soon, that is what the pause is about.

My thoughts...

Also in the long run you should decide to be consistent with you trading so the odds work in you favor, ie: take them all, don't take them
at all, if "some condition" then take them.

it is nice to talk on the net while waiting for the trades to devolope.

Best regards

Dale

Use at you own risk
  • #3,176
  • Jun 27, 2008 6:21am Jun 27, 2008 6:21am
Quoting glynnt
Anyone in on the USDCHF right now, its a good example of the ib breaking the wrong way. Trend is down, candle has broken to the top of the ib. Consensus seems to be to still await your entry to be triggered in the right direction....so I'm waiting....thoughts?
The bar just after the IB did not broke the limits of the first impulsive bar that originated the IB. To me, is what I call a "perverted" IB, still meaning indecision... Remember, the market doesn't have TFs, it has the Price Action...

If you could "join" the 2 bars, you'd still have an IB... personally, as today is Friday and I think the "fuel" of market is running low, I would not take it, but to me is still a valid DIBS setup.... In other circumstances, I'd take it for sure... to the right side of course...

Just my very personal thoughts...

Cheers!

HT
Many share my views with me. But I don't share them with them...
  • #3,177
  • Jun 27, 2008 6:23am Jun 27, 2008 6:23am
Anybody have any open positions from a DIBS trade today? what pair, what time did you take it? Curious to see if I am getting this right.

I had a short in for GBPUSD that went to 1:!, then turned and stopped me out (for BE as I had shaved off half position at 1:1).
Survive and Preserve
  • #3,178
  • Jun 27, 2008 6:30am Jun 27, 2008 6:30am
Quoting eltrader
Hi Doc, just wondering i have you right, are you saying you dont trade Cable at all with this method...???
Yeahh... shame on me... not trading this beast at all.

I think If one can master 2 or 3 pairs (I'm faaaaaar away from mastering...) that's enough to feed the pip pocket... the KISS principle fits perfectly to me (mainly the "stupid" part....)

For me that was a tough decision, but I had to take it.

But I strongly believe that this method works with the Cable ....it has more to do with my "trauma" than with the Cable... the market doesn't take anything personally, and I prefer trading in my comfort zone...

Cheers!
Many share my views with me. But I don't share them with them...
  • #3,179
  • Jun 27, 2008 6:43am Jun 27, 2008 6:43am
Quoting en0x
Anybody have any open positions from a DIBS trade today? what pair, what time did you take it? Curious to see if I am getting this right.

I had a short in for GBPUSD that went to 1:!, then turned and stopped me out (for BE as I had shaved off half position at 1:1).
...took a GU long earlier.
Attached Image (click to enlarge)
Click to Enlarge Name: GU 27th Jun 08 (1).GIF Size: 195 KB
  • #3,180
  • Jun 27, 2008 6:48am Jun 27, 2008 6:48am
Three open positions

USD/CAD
NZD/USD
AUD/USD


Free trades kept me at break even on my account, the free positions may make some money

Droping 2/3 of position at double the risk
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