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The DIBS Method... No Free Lunch continues 11,394 replies

The DIBS Method - No Free Lunch Returns 13 replies

Free lunch mentality 6 replies

No Free Lunch: Director's Cut 33 replies

Attachments: No Free Lunch but all the Free Coffee you can drink
Exit Attachments

No Free Lunch but all the Free Coffee you can drink

Quoting HouseTrader
The chart posted , in my opinion, is almost screaming to me..... "I'm going to decide!". As you said, maybe price couldn't resist breaking the triple top, maybe it would dive... (as it did).... but I think it wouldn't be around there too much, as we saw (very strong resistance... it's a "break it or leave it" situation).... giving DIBS a try, who knows we don't get a hit-and-run? I would also put a sell order at the lower limits to catch a dive.... just thoughts...

Cheers!
yes but as per the rules of dibs u only take sells if price is bellow the open of the day. so in this case the only option was a buy and it was a very risky one and as we saw it turned out to be a looser cause of the triple top.

There are situations where strong s/r are broken but i think in long term its better to stay out of high risk situations.
I have considered opening a thread on my understanding of this method and how I trade it. But I simply do not have the patience that Bemac, Jarroo, Jim16 and any other that can maintain a thread have. I am in awe of anyone who can do this. I cannot.

DIBS is a simple method; but simple should not be confused with 'Noobies can trade it'. It is a method (notice I avoid the word system) that unless you have been trading for a few years, will totally miss the nuances of.
Read through this and the other related threads. You will see that the experienced trader grasped the potential immediately.

How do you teach something to someone who doesn't have the synapses threads to grasp the concept? With a lot of patience, and as stated before - I do not have that.


Quoting giraia_br
could we know these details? Or if you prefer could you sent me a pm?

thanks in advance.
In trading, there is no bullshit. You either make money or you don't.
Quoting mrgreen
I have considered opening a thread on my understanding of this method and how I trade it. But I simply do not have the patience that Bemac, Jarroo, Jim16 and any other that can maintain a thread have. I am in awe of anyone who can do this. I cannot.

DIBS is a simple method; but simple should not be confused with 'Noobies can trade it'. It is a method (notice I avoid the word system) that unless you have been trading for a few years, will totally miss the nuances of.
Read through this and the other related threads. You will see that the experienced trader grasped the potential immediately.

How do you teach something to someone who doesn't have the synapses threads to grasp the concept? With a lot of patience, and as stated before - I do not have that.
well. So does what Twoblink does: open the thread: at the first question that you consider offensive close the trhead.

or send the details only for who ask. As you don't accept pms and e-mails you will not have much problems

BTW: i am "trading" for 7 years now and still have stupid difficult with it. Testing more than 6 exits for it.

thanks for reply.

EDIT: talking about Twoblink, i see some similarities in what Twoblink does and DIBS method.
Quoting leo_follower

FINAL NOTE: By no means do I want to imply that DIBS does not work. It may be a perfect and hugely profitable system. The testing period was far too short to draw any valid conclusions. In order to properly evaluate the system, you would need to extend it to at least 5 years, IMHO. Based on zinc6's results, I can only say that it is possible that the greatest potential of the DIBS methodology is in being ready to ride well beyond the 10R target in EVERY TRADE. It is also possible that exiting part of your position at a 1:1 target might cost you money, i.e. you have to pay for your "free" ride on the remaining portion. In any case, you can't make a mistake by doing your own detailed research before allocating your money to trading any system or technique.



Leonardo Follower
Since some of the cat is already out of the bag, I thought some perspective might be useful to DIBS hunters.

The secret is in long tails. No pun intended.

The important note to mention here is-- zinc6, in his kind, thoughtful, but extremely revealing exposure of his data, thankfully stopped at 10:1.

Here's the important note:
How about 15:1, 20:1, 50:1, 100:1, 200:1, 300:1..., available for the "long tail" trader?

That is left up to the quiet researcher, who after seeing the actual figures attainable, stops revealing his research. Long tails, profit distribution-wise, favor extra large returns at the higher end of the X:1 spectrum.

Earlier this year, I took an average of 320:1 profits on large DIBS-initiated Eur/Usd positions accumulated 23 months before. I learned the realities of long term "carry" and anti-carry trading at the same time. In addition, I had some "not insignificant" DIBS-initiated positions still rattling around and rolled over from 2002 that were closed with an equivalent of 450:1 profits.

To put in terms your mind can grasp easily: after carry costs and interest received were adjusted; 5 regular contracts with an 11 pip risk ($550) exited with $257,459 in profits.

Were partial profits on the original DIBS trades taken at much lower figures?

Absolutely!

Why?

Equity swing moderation.

Unless you love jagged rip-saw equity curves and know how to best utilise their power, normal humans do what they can to smooth an equity curve.

Might there be some opportunity cost exiting some partial positions? Sometimes. But nothing like the opportunity cost of not trading a powerful method because you definitely can't handle the equity swings.

Unless you are Hellboy, you can't handle the constant drain of having decent profits at least 50-60% of the time, just to get stopped out 20 - 50 times in a row and less than 0.5% of your trades are the big ones that when your wife finds out forces you into new house hunting. (How do you think I know this?)

TRT
aka: Leonardo
Quoting giraia_br
hehehe, mas será q vc pensou o mesmo q eu?
Bingo...
Many share my views with me. But I don't share them with them...
Quoting TheRealThing
That is left up to the quiet researcher, who after seeing the actual figures attainable, stops revealing his research.
TRT
aka: Leonardo
Thanks TRT.
I was actually quietly hoping most of this would just silently seep through the cracks to those who actually read and understood the infinite yield PDF and just leave the rest to go on with adding Bollinger Bands and 1:1 take profit approaches to their joyous fullfilment.

If it's any consolation, there are threads in more private spaces where the "real point" of this strategy wasn't lost on some. And your post helped clarify some questions about it as well, so Kudos.

Sincerely: Thank you for all the ideas you've made me think about lately and all your efforts towards the same rewardless endeavor only few others attempt as well.
Trust price. Know yourself.
Quoting TheRealThing
...of your trades are the big ones that when your wife finds out forces you into new house hunting. (How do you think I know this?)

TRT
aka: Leonardo
Intriguing, to say the least, that my little thought for a thread caught the attention of, not One but Two, successfull Traders.

Thanks TRT for dropping in &, of course, feel free to do so again. Even if you don't have something as profound to state.

{note to self; Set TP to 1/4 Mill & start looking @ houses... (Sorry but I have to say this. I am presently 18 months into a 2 Year sojourn from full time trading as I was seduced back into Home Building by a contract I couldn't refuse.)... or design one.}
Please search ICCE. Author 'Bemac'

Sorry but the search didn't return what I had hoped for so... here's the link...

http://www.forexfactory.com/showpost...2&postcount=23


An understanding of this will surely help you when "At Bat"
Well as you can see by my number of posts that I hardly ever post here but Ive been around for a while. I started reading the DIBS method no free lunch continues, and I decided to read this thread first as a "prelude." Well after reading this I just want to say how greatful I am for every contribution. I feel I am a better trader for it and my appreciation runs very deeply.
thanks, john
I quote PeterCrowns below:

"And, contrary to some common beliefs, not all breakouts are the same. I know which breakouts have 2 - 5 times the edge of similar-looking breakouts others take, get frustrated with, and likely lose money trading if they don't have perfect skills."


To the best of my knowledge, in the couple of times I have quickly read through this thread I did not see an expansion on this either on the part of PeterCrowns or anyone else, correct me if I am wrong. Now, I am virtually brand new to FX, but this seems to me to be "going to the next level" with the DIBS technique. Does anyone have any ideas on how we might recognize these breakouts that have a better edge? It must be more then just a longer inside bar right?
The way is narrow
this is a great title for a thread, bemac.
I am a humble noob who is trying to get my head around this nice DIBS system. I am 3 weeks into Forex entirely....looking at my charts on FXCM and I cannot see even one inside bar...the bars cannot be even right? It must have a lower high and a higher low...I am looking at 1hr charts and even going back some. Can anyone estimate roughly how many inside bar setups would occur during the first 6-9 hours of the session, I just want to find one!


Thanks.
The way is narrow
Quoting Sainz4Pips
I am a humble noob who is trying to get my head around this nice DIBS system. I am 3 weeks into Forex entirely....looking at my charts on FXCM and I cannot see even one inside bar...the bars cannot be even right? It must have a lower high and a higher low...I am looking at 1hr charts and even going back some. Can anyone estimate roughly how many inside bar setups would occur during the first 6-9 hours of the session, I just want to find one!


Thanks.
this question is more apropriate to other DIBS thread:
http://www.forexfactory.com/showthre...86766&page=271

but if you look GBPUSD now, you will see that the last bar is a IB.
Quoting PeterCrowns
Trading the "hot hand": Trading the strongest/weakest market is actually really simple. For example, yesterday the Eur/Usd was up more proportionately than the Usd/Chf was down. This was because the Usd/Chf wasn't even a down day. Definitely off its highs but not down relative to last week's close. The Eur/Usd was up, up and away! So that is the market you buy.

And I did! I'm sure I had company from this group.

In the pit the first thing you learn--- when you are ready to actually make money..., and stop the bleeding, is:

  1. Only be willing to buy a market if it is up on the day.
  2. Only be willing to sell a market if it is down on the day.

Obviously, it would logically follow that the currencies which are up more are better buys and the ones down more are the better shorts. So basically, if you get a buy setup forming on two strong currencies, take the trade on the one up most on the day.

This actually means that you never go short a currency unless it is "down" relative to yesterday's close; or go long for any reason unless the market is "up" on the day.

Review for yourself how many large losses you could've eliminated from your past trades if you followed these rules. At the same time, I am certain you would have eliminated very few of your biggest winners by doing this.

Think about this for a while. I have for decades. The power of this simple concept still amazes me.

I'm sure this sounds simplistic to everyone, and maybe this stuff is obvious to you all, but I doubt it. How many times do you find yourself buying a weaker currency instead of the stronger one, thinking that the weaker one "has" to catch up, or the stronger one has already moved as much as it is likely to already.

Always buy setups in the strongest daily markets, always take sell orders in the weakest daily markets.

And yes, I have come up with very simple methods to exploit this. Breakouts of inside bars on hourly charts is one very useable technique I use a lot. Pennants of various constructions work very well too. Once you know which markets to trade, and in which directions--- it is a pretty simple job.

After all, trading is just risk control. Unfortunately it can take a while for us to learn to use the simple tools we have available.

-Peter-

Peter I loved this simple insight. One simple question however, what do you consider to be the opening of the day. What time is that?
Quoting FX Phoenix
Peter I loved this simple insight. One simple question however, what do you consider to be the opening of the day. What time is that?
I think Peter Crowns has cut back on his posting activity; if you click
on his name, you'll find he has made only 39 posts since joining in March.

However, a lot of other traders on the forum have vouched for him
and many leave flattering comments on his member page (click here).

Here's the post where he answers your question:
http://www.forexfactory.com/showpost.php?p=2015503&postcount=335

There is a new thread about Peter's DIBS method. URL:
http://www.forexfactory.com/showthread.php?t=86766 Its¹ first post
goes like this:

¹ As an English teacher, I feel compelled to point out that my usage of "its" without an
apostrophe is absolutely correct in that sentence.

Quote
This is a continuation of the DIBS Method which was started at the
No Free Lunch but all the coffee you can drink thread.

http://www.forexfactory.com/showthread.php?t=56907

The bottom of the page is all of Peter's posts, thanks to doubletop.

It is a must to read and study the above thread to be current with this thread.

I would like to thank NowAndLater for putting this together.

Opening time
I think MPP sums it up nicely:
0600GMT is always 0600GMT. GMT and UTC never move all other times are +/- of GMT/UTC. ie london is currently GMT+1, your broker times are set to a GMT time and never change. BST, DST and EST change at differrent times so can be confusing.

I believe PC uses 0600GMT at all times, this way he can set his charts up get used to where the 0600gmt open is and forget about the confusion of BST EST and so on.
Peter:
"I use 00:00 CST or 06:00 GMT as my open. Believe me, if you are off 1 hour due to Daylight Savings time it is not going to be a problem."...
Life happens at the level of events. Trust only movement. - Adler
Quoting blunderbuss

¹ As an English teacher, I feel compelled to point out that my usage of "its" without an
apostrophe is absolutely correct in that sentence.
Are you a founder member -

Quote
Association for the Annihilation of the Aberrant Apostrophe

http://www.worldwidewords.org/articles/apostrophe.htm

Keith Waterhouse is my hero!

Quoting giraia_br
EDIT: talking about Twoblink, i see some similarities in what Twoblink does and DIBS method.
Care to expand on that?...
Quoting leo_follower
I wonder whether people really understand the implications of the results kindly posted by zinc6.

Let me start with this observation:

Once in a trade, you can exit it only once. You can close it at 1:1 profit target, at 2:1, 10:1 or trail it with a trailing stop. But you can’t close it at 1:1 and 10:1 at the same time. I have noticed that many DIBS followers love the idea of exiting half of their position at 1:1 to get the so-called "free ride" on the other half. Please note that if you do that consistently, then what you basically do is trade two different systems: System A with a 1:1 profit target (AND) System B with a "let the profits run" type of exit. You just allocate half of your funds to the System A and the other half of your funds to the System B. That said, please also note that with a 1:1 profit target in the System A, you need a %win rate of more than 50% for it to be profitable. In other words, if you use a 1:1 profit target, more than half of your trades MUST be wins or the system will cost you money. So if you still love the idea of a free ride on the other half of your position, just make sure that you achieve a 50%+ win rate on the first half exited at 1:1. I know that a free ride feels good -- just make sure you don't have to pay for it.

Now back to zinc6's results…

For the sake of discussion, let R be our measure of losses and profits, i.e. if a trade is stopped out, we have a 1R loss. If it is closed at 1:1, we have a 1R profit. If it is closed at 2:1, we have a 2R profit. If it is closed at 10:1, we have a 10R profit. Etc.

Then, average profit per trade in Rs = ( profit target in Rs * number of wins – 1R * number of losses ) / number of trades

For example, let's say we trade EUR/USD with a 2:1 profit target. Based on the results from the table, we would have:
average profit per trade in Rs = ( 2R * 41 – 1R * 96) / 137 = -0.102R
In other words, if you had traded EUR/USD only using DIBS in the Oct 2007 - Apr 2008 period with a 2:1 profit target, then based on zinc6's results, you would have achieved a -0.102R loss per trade.


I have made similar calculations for the other data in the table. Here are my results:

DIBS Trading Results for the Period Between Oct 2007 - Apr 2008 based on zinc6's Backtest:

EUR/USD with a 1:1 profit target: -0.036R loss per trade
EUR/USD with a 2:1 profit target: -0.102R loss per trade
EUR/USD with a 3:1 profit target: -0.153R loss per trade
EUR/USD with a 4:1 profit target: -0.088R loss per trade
EUR/USD with a 5:1 profit target: 0.007R profit per trade
EUR/USD with a 10:1 profit target: 0.365R profit per trade

GBP/USD with a 1:1 profit target: 0.152R profit per trade
GBP/USD with a 2:1 profit target: 0.248R profit per trade
GBP/USD with a 3:1 profit target: 0.376R profit per trade
GBP/USD with a 4:1 profit target: 0.280R profit per trade
GBP/USD with a 5:1 profit target: 0.248R profit per trade
GBP/USD with a 10:1 profit target: 0.056R profit per trade

USD/JPY with a 1:1 profit target: -0.122R loss per trade
USD/JPY with a 2:1 profit target: -0.201R loss per trade
USD/JPY with a 3:1 profit target: -0.223R loss per trade
USD/JPY with a 4:1 profit target: -0.173R loss per trade
USD/JPY with a 5:1 profit target: -0.180R loss per trade
USD/JPY with a 10:1 profit target: -0.446R loss per trade

USD/CHF with a 1:1 profit target: -0.174R loss per trade
USD/CHF with a 2:1 profit target: -0.239R loss per trade
USD/CHF with a 3:1 profit target: -0.217R loss per trade
USD/CHF with a 4:1 profit target: -0.167R loss per trade
USD/CHF with a 5:1 profit target: -0.087R loss per trade
USD/CHF with a 10:1 profit target: 0.116R profit per trade

All four pairs with a 1:1 profit target: -0.045R loss per trade on average
All four pairs with a 2:1 profit target: -0.074R loss per trade on average
All four pairs with a 3:1 profit target: -0.054R loss per trade on average
All four pairs with a 4:1 profit target: -0.037R loss per trade on average
All four pairs with a 5:1 profit target: -0.003R loss per trade on average
All four pairs with a 10:1 profit target: 0.023R profit per trade on average


FINAL NOTE: By no means do I want to imply that DIBS does not work. It may be a perfect and hugely profitable system. The testing period was far too short to draw any valid conclusions. In order to properly evaluate the system, you would need to extend it to at least 5 years, IMHO. Based on zinc6's results, I can only say that it is possible that the greatest potential of the DIBS methodology is in being ready to ride well beyond the 10R target in EVERY TRADE. It is also possible that exiting part of your position at a 1:1 target might cost you money, i.e. you have to pay for your "free" ride on the remaining portion. In any case, you can't make a mistake by doing your own detailed research before allocating your money to trading any system or technique.

To all those who say that they don't care about backtest results of mechanical systems because they rely on discretion to be profitable when trading a technique, let me offer my sincere congratulations. What you say in essence is this: "My discretionary skills are so great that I can even turn a losing mechanical system into a profitable one." Again, hats off to you!

Leonardo Follower
hi folks,
thats my first post on FF, hope to tell some not (so) stupid.
following that I quoted the only profitable trades semme to be only 10:1 trade.

So If you trade with two lots, or you come out at 10:1 with BOTH lots, or it semms to be a loser in long time...isn't it?
money... it's a gas baby, can't you take it! venezia
Quoting Aad
Care to expand on that?...
sorry for the late reply.

Twoblink trades most peanants. He talks about time too: he said that he found something interesting about time. He said that no one had said about time before but of course Gann, Mark Fisher and Toby Crabel (i did'nt read the book yet but he is the guy TRT talk about in his blog).

and Twoblink talks about "perfect point to add to a trade" but in his case he uses Pascal Triangle.

so, the similarities i see are: something with Opening Range Breakouts, Pennants, using math to figure out the best moment to add to a trade.

hope this help. Sorry for my bad English.
Quoting giraia_br
sorry for the late reply.

Twoblink trades most peanants. He talks about time too: he said that he found something interesting about time. He said that no one had said about time before but of course Gann, Mark Fisher and Toby Crabel (i did'nt read the book yet but he is the guy TRT talk about in his blog).

and Twoblink talks about "perfect point to add to a trade" but in his case he uses Pascal Triangle.

so, the similarities i see are: something with Opening Range Breakouts, Pennants, using math to figure out the best moment to add to a trade.

hope this help. Sorry for my bad English.
I appreciate the info, thanks...
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