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The DIBS Method... No Free Lunch continues

  • #4,801
  • Aug 13, 2008 8:53am Aug 13, 2008 8:53am
Quoting Forex007
Hi guys,

What are your thoughts on discretionary approach to risk.

Let's take IBs as an example. Risking 1-2% on every PB doesn't make much sense - after all we have some IBs that occur at strong PPZ or confluence points, and are also support by higher TF PA. Why not increase risk to, say, 5% in such cases?
The reason to why I think you should stick to the same risked % on every trade is because you will never know when you are going to be stopped out, you simply don't. Sure the setup might be a A+ setup, but what can happen is that you might be stopped out and then comes the expected move, instead you could risk 1-2% on the first trade and then 1-2% again if the initial trade fails.
I think that this is something that you might be able to do once you have done a lot of trades over a longer period of time. Here's my question though: if you are successfull at 1-2% why increase to 5% on one trade and in that way increase the psychological factor that is in trading?
  • #4,802
  • Aug 13, 2008 8:57am Aug 13, 2008 8:57am
Quoting BUIGO
but I know that perhaps I SHOULD NOT HAVE TAKEN THIS EUR DIB LONG since it opened below the open .

Yes, you are right. Probably worth having a quick set of rules beside you or stuck beside the screen! I think we can all get caught out without someone standing over our shoulder. That is why this thread is excellent because there are so many people sharing and willing to help.
  • #4,803
  • Aug 13, 2008 9:17am Aug 13, 2008 9:17am
anyone take short on EU on the latest IB?
or is it too late to do so?
  • #4,804
  • Aug 13, 2008 9:28am Aug 13, 2008 9:28am
Quoting soul
anyone take short on EU on the latest IB?
or is it too late to do so?
Quite late and also around the average daily range for the day, but definitely in line with the trend!
  • #4,805
  • Aug 13, 2008 9:56am Aug 13, 2008 9:56am
because THE trend is on my side and I can live and take small loses all day. I know that sooner or later I will catch my wave and ride it to the propmised land of profitabilty
  • #4,806
  • Aug 13, 2008 11:47am Aug 13, 2008 11:47am
all in all it was a very very fruitful day in terms of learning . I know that there has to be contraction on the charts before there is expansion just like a lung that inhales and exhales. See you all later !
  • #4,807
  • Aug 13, 2008 12:39pm Aug 13, 2008 12:39pm
Quoting NowAndLater
The reason to why I think you should stick to the same risked % on every trade is because you will never know when you are going to be stopped out, you simply don't. Sure the setup might be a A+ setup, but what can happen is that you might be stopped out and then comes the expected move, instead you could risk 1-2% on the first trade and then 1-2% again if the initial trade fails.
I think that this is something that you might be able to do once you have done a lot of trades over a longer period of time. Here's my question though: if you are successfull at 1-2% why increase to 5% on one trade and in that way increase the psychological factor that is in trading?
Hi NAL! I rethought my view on the risk subject. I guess we should be taking each trade because it makes sense (e.g. from PA point of view). And we apply 1-2% risk limit as part of good Money Management practice. So, assessing trade viability has got nothing to do with MM.

After all, you are right - ANY trade can go wrong.
One Chart is Worth Ten Thousand Words.
  • #4,808
  • Aug 13, 2008 1:23pm Aug 13, 2008 1:23pm
Quoting Forex007
Hi NAL! I rethought my view on the risk subject. I guess we should be taking each trade because it makes sense (e.g. from PA point of view). And we apply 1-2% risk limit as part of good Money Management practice. So, assessing trade viability has got nothing to do with MM.

After all, you are right - ANY trade can go wrong.
I think some of the more experienced breakout traders can "see" which breakouts that has more potential, as PC has mentioned himself, and can therefore risk a little more on a single trade (not saying that potentially PC does this, only that he knows which breakouts that have higher probability), or even add to the trade just after the breakout because they "know". On the other hand, if you are a winning trader, it doesn't imo make any sense to try and catch those extra dollars since they know that the money will keep coming anyway.
  • #4,809
  • Aug 13, 2008 3:25pm Aug 13, 2008 3:25pm
Quoting jarroo
I missed the 1st DIBS trade on Monday, but caught the 2nd signal for a small profit before being stopped out. I didn't take the reverse trade.

No one knew how profitable that 1st signal would become by the end of the week.
The understatement of the year so far.
Indicators show the past. Price Action "Indicates" the future.
  • #4,810
  • Aug 13, 2008 5:31pm Aug 13, 2008 5:31pm
Hello all,

I just wanted to stop in and say that I wish I had found this system a year ago, when I first started. all the same though if I found this system a year ago I wouldn't have seen just how powerful it really is.

It is funny how the simpliest things really are the most powerful.

s/r, price action and some dibs is a pretty strong toolbox.

Good trading all, hope you all will be successful

Do DIBS instead. hehehehe, that would be an awesome forex commerical....
  • #4,811
  • Edited 7:53pm Aug 13, 2008 7:36pm | Edited 7:53pm
Hey Jarro,

Great job on this thread, Thank you!

I have a Q, How long do you consider an IB to be valid?
Only for the first bar that breaks the IB? Say the daily is
up and the IB is broken to the down side, but price comes
back up two or three hours later, is the IB still valid?

Thanks for the help.

AZ
Attached Image (click to enlarge)
Click to Enlarge Name: IB.gif Size: 19 KB
I found the guy who keeps losing me money. Its "ME" SHOOT HIM!
  • #4,812
  • Edited 8:04pm Aug 13, 2008 7:59pm | Edited 8:04pm
Quoting AZ-Heat
Hey Jarro,

Great job on this thread, Thank you!

I have a Q, How long do you consider an IB to be valid?
Only for the first bar that breaks the IB? Say the daily is
up and the IB is broken to the down side, but price comes
back up two or three hours later, is the IB still valid?

Thanks for the help.

AZ

I'm new to this method... I don't think its valid.
  • #4,813
  • Aug 13, 2008 8:06pm Aug 13, 2008 8:06pm
Quoting AZ-Heat
Hey Jarro,

Great job on this thread, Thank you!

I have a Q, How long do you consider an IB to be valid?
Only for the first bar that breaks the IB? Say the daily is
up and the IB is broken to the down side, but price comes
back up two or three hours later, is the IB still valid?

Thanks for the help.

AZ

Great question AZ.

I would say that since this is on the hourly time frame, an IB would only be vaild a few bars (few hours). Best situation is that it breaks on the next bar, hard and fast, with no retracement.

I think we can start defining best situation and only play thoses trades. I haven't studied this indepth yet. But it could go something like this:

If IB is not broken on the next bar; pass on this one.
If IB retraces quick and did not stop out; look for a 2/3 profit and move 1/3 to B/E.
If IB is stopped out, and stop and reverse is stopped out as well, this action invalidates the IB.

And so on.

Jim
Indicators show the past. Price Action "Indicates" the future.
  • #4,814
  • Aug 14, 2008 12:13am Aug 14, 2008 12:13am
sold eur at 1.4878
Attached Image (click to enlarge)
Click to Enlarge Name: eur 8-13-08 112am est.gif Size: 16 KB
  • #4,815
  • Aug 14, 2008 1:35am Aug 14, 2008 1:35am
Quoting NowAndLater
I think some of the more experienced breakout traders can "see" which breakouts that has more potential, as PC has mentioned himself, and can therefore risk a little more on a single trade (not saying that potentially PC does this, only that he knows which breakouts that have higher probability), or even add to the trade just after the breakout because they "know". On the other hand, if you are a winning trader, it doesn't imo make any sense to try and catch those extra dollars since they know that the money will keep coming anyway.
Hello NAL,
looking to the EU it is ranging since 2 days. There were some IB's, but not a real breakout, the 4h the same, the daily candles with long tails, a phase of indecision. There will be a breakout, but nobody knows, at what time it will happen. Or do some people know when it happens with some probability? How to handle IB's in this situation, when you have smaller moves after IB's, but if you keep staying in, you will get stopped out. Are there any rules you can use to suppose with good probability when the larger breakout will occure? Or just playing every DIBS, taking a small loss here and there, and beeing in, when the real breakout occures? Or only taking the setup, when the S/R of the current range is broken? (In that case it might be difficult to jump in, except at a retracement)
Many regards, Michael
  • #4,816
  • Aug 14, 2008 1:38am Aug 14, 2008 1:38am
Quoting NowAndLater
I think some of the more experienced breakout traders can "see" which breakouts that has more potential, as PC has mentioned himself, and can therefore risk a little more on a single trade (not saying that potentially PC does this, only that he knows which breakouts that have higher probability), or even add to the trade just after the breakout because they "know". On the other hand, if you are a winning trader, it doesn't imo make any sense to try and catch those extra dollars since they know that the money will keep coming anyway.

"knowing which trades have a high probability of winning".....
??

yes that would indeed be useful. Keep it up guys.
  • #4,817
  • Aug 14, 2008 1:45am Aug 14, 2008 1:45am
Hi,

It looks like you guys have got a great method here.

As I have only started looking at inside bars can anyone who has been watching them for a while answer this ?

When the IB forms as a pinbar does it gives any better results than a normal IB .

Ian
  • #4,818
  • Edited 5:23am Aug 14, 2008 2:15am | Edited 5:23am
I am going to be direct here, as it is the best why I know to make my point.


So much effort spent on trying to avoid a loss, most likely becuase of trading to big. 5% ?????

That kind of loss would hurt especially after a series of lossers, maybee you are down 30%. Then you stop trading right before a big move, or miss a great entry becuase you are trying to beat the odds. ouch. How do I understand this? been there done that trading other methods. just trying to save you money here.

How many stopped trading dibs a couple weeks ago or did not let some ride?. Instead of methodically building a position a little at a time. in several markets?

Then when there is a big move you just happen to be in it and bank a lot of green, that is what dibs is about. maybee you should be only trading .25 of percent, over 5 markets? in one night you could risk up to 1.25 percent of you account. Trade what you can really stomach in real time over the next 6 months, and do it in some consistent proffesional manner.

That is why I have high regard for Jaroo & NowAndLatter

Still it is a good discussion i just thought I would comment.


I hope I have not offended anyone

Best regards

Dale
  • #4,819
  • Aug 14, 2008 2:57am Aug 14, 2008 2:57am
Quoting manto
Hello NAL,
looking to the EU it is ranging since 2 days. There were some IB's, but not a real breakout, the 4h the same, the daily candles with long tails, a phase of indecision. There will be a breakout, but nobody knows, at what time it will happen. Or do some people know when it happens with some probability? How to handle IB's in this situation, when you have smaller moves after IB's, but if you keep staying in, you will get stopped out. Are there any rules you can use to suppose with good probability when the larger breakout will occure? Or just playing every DIBS, taking a small loss here and there, and beeing in, when the real breakout occures? Or only taking the setup, when the S/R of the current range is broken? (In that case it might be difficult to jump in, except at a retracement)
Many regards, Michael

I woud certainly advise waiting for the break, admittedly you will miss some of the action but trying to trade from within this tight range calls for a different strategy.

Regards,

BabeFX
  • #4,820
  • Edited 3:02am Aug 14, 2008 3:00am | Edited 3:02am
Dale,

Quote
So much effort spent on trying to avoid a loss
I couldn't agree more.......in my own case I trade a 0.5% risk per trade and no more than two trades concurrently.......then, I don't panic if trade looks to be going wrong way as my potential losses are very small.

As the account grows (when????), then the lot size within the 0.5% also grows and the potential profits as well while the losses are still contained satisfactorily. So small risk = little or no stress = no panic decisions = better trading.
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