i am a relatively new member and would like to thank you for sharing the DIBS method which i have found to be extremely profitable once the trend is determined and the trade is with the trend
The DIBS Method... No Free Lunch continues
- #3,902
- Jul 15, 2008 10:53am Jul 15, 2008 10:53am
- Joined Mar 2007 | Status: It's all just noise. | 1,681 Posts
- #3,903
- Jul 15, 2008 11:09am Jul 15, 2008 11:09am
[quote=rusty105;2110426]What about whenthe IB is before the open, like 3 or 4 GMT?
Rusty[/quote
Rusty see my post...I thought I answered that for you...if I did not ...let me know.
Rusty[/quote
Rusty see my post...I thought I answered that for you...if I did not ...let me know.
Unus pro omnibus, omnes pro uno
- #3,904
- Edited 4:09pm Jul 15, 2008 11:17am | Edited 4:09pm
Hello,
If you trade and use Oanda's platform and had traded their 3hr timeframe, you would have come up with DIBS at the close of the 6:00 am est candle on the g/u and the e/u without your initial stop being hit for a loss. At one point, the g/u was 60 pips in profit and the e/u 65 pips. At the moment, if you did not take profit you are still riding the train for free.
If you trade and use Oanda's platform and had traded their 3hr timeframe, you would have come up with DIBS at the close of the 6:00 am est candle on the g/u and the e/u without your initial stop being hit for a loss. At one point, the g/u was 60 pips in profit and the e/u 65 pips. At the moment, if you did not take profit you are still riding the train for free.
Unus pro omnibus, omnes pro uno
- #3,905
- Jul 15, 2008 2:33pm Jul 15, 2008 2:33pm
- | Joined Mar 2008 | Status: ... I was aiming at the horse! | 913 Posts
To Aud:
Sometimes I'll make two attempts on the same IB (which wasn't the case here). Today I had a daily upward bias and was only willing to take long trades on the Euro. I ignored the break to the downside. Had it been a convincing break to the downside, I would have passed on the trade as well. My own discretion told me to trade with the trend today and that there would likely be a run at the big round number (1.6000).
To all who think DIBS is a mechanical method, that's a perfect description of how different it can be used, according to our own discretion... Taking the short could be for sure a DIBS perfect setup, but sometimes we skip some trades based on our bias... Today, if I had waken up (hey, NAL, I was still digesting my shrimp risotto with grilled salmon, 7th wedding anniversary
HouseChef in charge...
)... I also would only take the long side, but it's completely personal....Cheers!
Many share my views with me. But I don't share them with them...
- #3,906
- Jul 15, 2008 3:25pm Jul 15, 2008 3:25pm
- | Joined Sep 2007 | Status: Breakout Baby | 692 Posts
Nice, Bill
To all who think DIBS is a mechanical method, that's a perfect description of how different it can be used, according to our own discretion... Taking the short could be for sure a DIBS perfect setup, but sometimes we skip some trades based on our bias... Today, if I had waken up (hey, NAL, I was still digesting my shrimp risotto with grilled salmon, 7th wedding anniversary
Cheers!
Nice, Bill
To all who think DIBS is a mechanical method, that's a perfect description of how different it can be used, according to our own discretion... Taking the short could be for sure a DIBS perfect setup, but sometimes we skip some trades based on our bias... Today, if I had waken up (hey, NAL, I was still digesting my shrimp risotto with grilled salmon, 7th wedding anniversary
Cheers!
From my personal point of view, I try to delete every discretional tool from my trading style, but as you say, it's completely personal ! Happy party!
- #3,908
- Jul 15, 2008 4:14pm Jul 15, 2008 4:14pm
- | Joined Mar 2008 | Status: ... I was aiming at the horse! | 913 Posts
DIBS has made me think in breakout theories only and I have to say, its the KING (for me that is). I was doing some celebrating myself, celebrating the nice last 3days that I've had so I put on a grill and did some nice barbeque... Wow 7 years - hats off my friend and a big congratulations!
I guess breakouts are my favorite dish (in Fx) too...
Cheers!
Many share my views with me. But I don't share them with them...
- #3,909
- Jul 15, 2008 4:29pm Jul 15, 2008 4:29pm
- | Joined Mar 2008 | Status: ... I was aiming at the horse! | 913 Posts
From my personal point of view, I try to delete every discretional tool from my trading style, but as you say, it's completely personal ! Happy party!
The most important is find our edge and feel comfortable with it... and fortunately there are not 2 traders with the same style, that's a good thing! And from that, we cold never say there's a "right" way of trading...
By the way, are you the one at the drums or at the brass? (went to your website... nice Jazz Orchestra
)Cheers!
Many share my views with me. But I don't share them with them...
- #3,910
- Edited 11:18pm Jul 15, 2008 10:54pm | Edited 11:18pm
- Joined Sep 2006 | Status: ... | 8,112 Posts
Nice, Bill
To all who think DIBS is a mechanical method, that's a perfect description of how different it can be used, according to our own discretion... Taking the short could be for sure a DIBS perfect setup, but sometimes we skip some trades based on our bias... Today, if I had waken up (hey, NAL, I was still digesting my shrimp risotto with grilled salmon, 7th wedding anniversary
Cheers!
In post #21 Peter talks about how as a pit trader, he followed the news.
In post #39, he says that not all breakouts are the same ('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.'), and hence he trades only the best ones. (Compare that with TheRealThing's comment in the http://www.forexfactory.com/showthread.php?p=205799 post where he talks about trading only high quality breakouts, like a surfer looking for the best waves**). My understanding is that Peter and TRT are close friends and former colleagues.
In post #39 Peter also says that 'There are 'secrets' of trading that are known to a few of us. These secrets buy our multi-million-dollar homes and lives of relative security' . But he doesn't explain those secrets. They may include inside knowledge on big banks and 'order flow' (see post #75).
In post #102 Peter says that there were some trades which met the DIBS rules, but he didn’t take them, because he was only looking for long trades (but he doesn’t explain why).
He is very selective about his entries – see post #95 ('I've been accused by my friend -TheRealThing- that I am one of the most reluctant traders he's known. Even more reluctant than him.
I don't think that is bad. I only like to take trades that have low risk and are in the direction of least resistance, the main trend.')
He says elsewhere that probabilities improve further if the trade complies not only with the daily move, but also the weekly trend.
In post #65 he says that the DIBS profit exits are completely discretionary.
In post #99 he says that he believes all trading is discretionary. He also says that he trades pennants as well as inside bars – see post #23.
In the same post he says that he looks to trade the strongest pair(s) long, ands the weakest pair(s) short – again, this is discretionary. 'Once you know which markets to trade, and in which directions--- it is a pretty simple job.'
Most importantly, in post #58, he gives what I believe is a real clue: taking LOW RISK trades. In other words, he likes small inside bars that result in tight stops and high RR. A quote from this post that explains all this:
'Win rate is not the most important factor in finding a good trading method. Profit potential/risk is.
The psychologically hardest one to trade is the one I use. I use the other extreme of the inside bar for my stop point.
The risk is as low as it is going to be and the best trades for us are the ones that don't give you ANY retracement after the breakout. Yes, you get stopped out a bit more than if you had the stop a bit farther away. We are trading to risk as little as possible for the greatest amount of potential gain.'
He apparently gets particularly excited about high RR trades – see posts #83 and (especially) #92.
From what I've read in the above posts, the idea of simply entering when a high/low of an IB is penetrated, above the Daily open price, and within a certain time-of-day window, was only part of Peter's overall DIBS strategy. IMHO a re-read of these posts is a very worthwhile exercise.
Reading further between the lines, DIBS is an embodiment of some of TRT's key ideals. TRT acknowledges that many of his own ideas mirror those of fund manager Toby Crabel (see www.crabel.com), namely:
-- the opening range breakout method (i.e. trade only in the direction of the emerging daily move)
-- narrowed down further to a volatility breakout ("expansion" following an IB, which symbolizes "contraction"), and
-- with a tight SL (afforded by the IB) to contain losses, while allowing unrestricted profits (emphasis on high RR)
The concepts feature highly, albeit among others, in Mr Crabel's book Day Trading with Short Term Price Patterns and Opening Range Breakout (Traders Press, 1990). The main differences being that DIBS has supposedly been adapted to trade forex (e.g. no overnight gaps), and doesn't consider previous days' price patterns.
[** I'm guessing here, but I suspect that one of Peter's criteria for a "superior" breakout might involve prolonged contraction, i.e. multiple narrow range bars, and preferably contained within a previous bar (NR4 type patterns). And also very small IBs that give high RR.]
I haven't worked my way through this thread yet (almost 4,000 posts, would take me half a lifetime, LOL), but it looks like you guys have taken the mechanical aspects that were presented by Jarroo, and are testing your own variations.
Good luck,
David
- #3,912
- Jul 15, 2008 11:48pm Jul 15, 2008 11:48pm
- Joined Mar 2007 | Status: It's all just noise. | 1,681 Posts
HT, my understanding is that the original DIBS, as traded by Peter Crowns in the "No Free Lunch" thread, was very discretionary.........
Good luck,
David
Glad to see you here. Welcome to Jaroo's Jungle!
Bill
- #3,913
- Jul 16, 2008 12:38am Jul 16, 2008 12:38am
- Joined Mar 2007 | Status: Symbol | 2,788 Posts
My sentiments exactly. Hi Hanover, looking forward to more of your posts.
Well analysed hanover.
I think Peter has only given us a small piece of the puzzle, however, he's given us enough info to set us on the right path. If we really want to put the pieces together, we must use our own initiative to do so. I'm sure he was given less information that got him where he is today.
There's stuff there that would have taken him years of heartache and pain to learn. He's not going to just hand it all out to us on a silver platter and on a public forum.
That said, I am forever grateful for the insight he has provided into professional trader secrets or tricks of the trade.
It is now on our own head to take that information and put it to good use, not just create an EA to trade every DIBS set-up on the chart, or worse still, sell it as a forex robot.
FF journal: Peaks and Troffs
- #3,914
- Jul 16, 2008 12:53am Jul 16, 2008 12:53am
- Joined Mar 2007 | Status: It's all just noise. | 1,681 Posts
Nice, Bill
To all who think DIBS is a mechanical method, that's a perfect description of how different it can be used, according to our own discretion... Taking the short could be for sure a DIBS perfect setup, but sometimes we skip some trades based on our bias... Today, if I had waken up (hey, NAL, I was still digesting my shrimp risotto with grilled salmon, 7th wedding anniversary
Cheers!
I believe there is a happy medium between following rules to the letter and using discretion. We can't avoid using discretion. Sometimes we're faced with multiple setups and can't take them all, or false breakouts that invite us back in, or upcoming news that keeps us out. Conundrums. And when do we exit? Whenever we make a choice we are using discretion. I like to think of it like this:
Someone is walking on the RR tracks with a Canadian Pacific schedule in his hand. The schedule calls for no train and he's walking this shortcut based on his printed schedule and a phone call to the Canadian Pacific traffic manager who confirmed there would be no train coming through for the rest of the day. 30 minutes into his walk, he sees smoke rising in the distance, but he knows there is no train. Then, he hears rumbling and a whistle blows but he knows there is no train. Now, the tracks are moving under his feet but the schedule in his hand calls for no train and he has confirmed it with the CP traffic manager. The train now looms into sight and it is traveling on the very tracks he is walking on. Though he had a valid plan, he has to make a choice based on new, more convincing information. It's likely that he has now formed a new bias to get off the tracks.
I'm presently short USD/ JPY based on the IB two bars back. My bias is short on this pair, but discretion also has me watching closely for a double bottom at yesterday's low. If we break that we may be golden. And then again my analysis has a good possibility of being hogwash.
- #3,915
- Jul 16, 2008 1:07am Jul 16, 2008 1:07am
- Joined Mar 2007 | Status: Symbol | 2,788 Posts
We've got some deep thinkers on this thread I follow my trading plan to the letter, unless my gut tells me otherwise.
If EA's worked, there would be no market.If it was that easy everyone would do it.I liked someone on Fx F's quote... "Tradings simple, but it's not easy".
I follow my trading plan to the letter, unless my gut tells me otherwise. If EA's worked, there would be no market.If it was that easy everyone would do it.I liked someone on Fx F's quote... "Tradings simple, but it's not easy". Congrats on the anniversary (and the grilled salmon).
I believe there is a happy medium between following rules to the letter and using discretion. We can't avoid using discretion. Sometimes we're faced with multiple setups and can't take them all, or false breakouts that invite us back in, or upcoming news that keeps us out. Conundrums. And when do we exit? Whenever we make a choice we are using discretion. I like to think of it like this:
Someone is walking on the RR tracks with a Canadian Pacific schedule in his hand. The schedule calls for no train and he's walking this shortcut based on his printed schedule and a phone call to the Canadian Pacific traffic manager who confirmed there would be no train coming through for the rest of the day. 30 minutes into his walk, he sees smoke rising in the distance, but he knows there is no train. Then, he hears rumbling and a whistle blows but he knows there is no train. Now, the tracks are moving under his feet but the schedule in his hand calls for no train and he has confirmed it with the CP traffic manager. The train now looms into sight and it is traveling on the very tracks he is walking on. Though he had a valid plan, he has to make a choice based on new, more convincing information. It's likely that he has now formed a new bias to get off the tracks.
I'm presently short USD/ JPY based on the IB two bars back. My bias is short on this pair, but discretion also has me watching closely for a double bottom at yesterday's low. If we break that we may be golden. And then again my analysis has a good possibility of being hogwash.
FF journal: Peaks and Troffs
- #3,917
- Jul 16, 2008 3:35am Jul 16, 2008 3:35am
- | Joined Mar 2008 | Status: ... I was aiming at the horse! | 913 Posts
HT, my understanding is that the original DIBS, as traded by Peter Crowns in the "No Free Lunch" thread, was very discretionary....
I would say, after reading Bemac's and Jim's thread over and over, that IMHO, DIBS, as any trading method, is completely discretionary...
This method gives us, as you mentioned, not a huge W/L ration, but a terrific R/R ratio, with the ability to quickly cut the potential loss (the Free Ride concept)... the profits take care of themselves....
Suddenly, after testing lots of methods, after trying DIBS, I found myself with an interesting "problem".... the best way of trailing a stop, or exiting the trade ! What a headache!
I'm sure Peter and TRT, after years of trading, have just given us a glimpse of what they can do with breakout systems... food for hungry minds (here comes the discretion again....
). The most brainstorming point for me is when he says "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.' ".... Some day, who knows, I could reach it...Thanks for the inputs...
Cheers!
HT
Many share my views with me. But I don't share them with them...
- #3,918
- Jul 16, 2008 3:54am Jul 16, 2008 3:54am
- | Joined Mar 2008 | Status: ... I was aiming at the horse! | 913 Posts
Congrats on the anniversary (and the grilled salmon).
I believe there is a happy medium between following rules to the letter and using discretion. We can't avoid using discretion. Sometimes we're faced with multiple setups and can't take them all, or false breakouts that invite us back in, or upcoming news that keeps us out. Conundrums. And when do we exit? Whenever we make a choice we are using discretion. I like to think of it like this:
Someone is walking on the RR tracks with a Canadian Pacific schedule in his hand. The schedule calls for no train and he's walking this shortcut based on his printed schedule and a phone call to the Canadian Pacific traffic manager who confirmed there would be no train coming through for the rest of the day. 30 minutes into his walk, he sees smoke rising in the distance, but he knows there is no train. Then, he hears rumbling and a whistle blows but he knows there is no train. Now, the tracks are moving under his feet but the schedule in his hand calls for no train and he has confirmed it with the CP traffic manager. The train now looms into sight and it is traveling on the very tracks he is walking on. Though he had a valid plan, he has to make a choice based on new, more convincing information. It's likely that he has now formed a new bias to get off the tracks.
I'm presently short USD/ JPY based on the IB two bars back. My bias is short on this pair, but discretion also has me watching closely for a double bottom at yesterday's low. If we break that we may be golden. And then again my analysis has a good possibility of being hogwash.
Agree with you 110%. We all have a plan, a management, a checklist, tools, whatever... but when the time of pulling the trigger comes, there's no way of being just some visual setup... and what if the freight train is coming, we can just sit screaming that it shouldn't be there?...
(huh.. such a "convincing information" can't be ignored...
)Cheers!
HT
Many share my views with me. But I don't share them with them...
