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The DIBS Method... No Free Lunch continues

  • #5,161
  • Aug 26, 2008 5:57am Aug 26, 2008 5:57am
Quoting rusty105
On a day like today when there has been some big moves already, with no DIBS. If a DIBS signal comes along, in the same direction, do you take it? EURUSD has gone down >100Pip, and the trend is down. Do you take another short signal, or wait till after a retrace, if any?

Rusty
A DIBS trade is a DIBS trade. But I would be aware of the ADR of the pair. What's the Euro's ? 125.
Indicators show the past. Price Action "Indicates" the future.
  • #5,162
  • Aug 26, 2008 6:26am Aug 26, 2008 6:26am
Quoting rusty105
On a day like today when there has been some big moves already, with no DIBS. If a DIBS signal comes along, in the same direction, do you take it? EURUSD has gone down >100Pip, and the trend is down. Do you take another short signal, or wait till after a retrace, if any?

Rusty
excellent point here. I would better wait for a retracement rather then entering after an IB in the same direction, because after an extended move, an IB might signal the fact that the movement is losing steam and might start to retrace soon.

For the EU we should have a small retracement back up to the TL it broke on daily, then another run down. The HS formation on 1H and 4H is very clear and shows that the euro might fall until 1.4300 if we are lucky.
We leave no soldier behind.
  • #5,163
  • Aug 26, 2008 6:35am Aug 26, 2008 6:35am
Quoting jarroo
Gbp/Jpy
Not sure if i am set up correctly when in add the dibs trigger i have the option to set the opening of the day , Which i have done and my start vertical line corresponds as yours but i get no dibs lines unless i set my open an hour earlier?
  • #5,164
  • Aug 26, 2008 6:56am Aug 26, 2008 6:56am
Quoting rusty105
On a day like today when there has been some big moves already, with no DIBS. If a DIBS signal comes along, in the same direction, do you take it? EURUSD has gone down >100Pip, and the trend is down. Do you take another short signal, or wait till after a retrace, if any?
Rusty, I was thinking along the same lines and asked the above questions (a few time ) but having considered the (predictable ) replies, I was "forced" to agree: the rules for taking (or not) IBs were given by PC who traded those rules (successfully) for over 10-15 years. So, if it ain't broken, why fix it.

True, DIBS doesn't catch all the moves, and at times the "right" move is not the same as indicated by DIBS rules. However, the current DIBS rules work; if we introduce "improvements", the consistency of those rules could be violated. So, maybe the improvements will allow to catch some "missed" moves, but there is NO g'tee that in the long-term the improved rules would produce good results.

That doesn't mean you shouldn't experiment, though...
One Chart is Worth Ten Thousand Words.
  • #5,165
  • Aug 26, 2008 7:02am Aug 26, 2008 7:02am
Quoting gagiul
excellent point here. I would better wait for a retracement rather then entering after an IB in the same direction, because after an extended move, an IB might signal the fact that the movement is losing steam and might start to retrace soon.
No matter how good and valid our analysis is, that still means we are "second-guessing" IBs.

"Gut feeling" or any other (no matter how logical) rationalization of the next possible price move is pure speculation. We could be right, we could be wrong. DIBS, on the other hand, does work in the long-term.

I do recall days when the price moved A LOT, then an IB was formed and I would enter against the DIBS rules ("it cannot go any lower, it must retrace now") only to see the price move enough to SL me. On the other hand, I did take IBs in the "right" direction and the trade didn't work.

PC said that not all IBs are equal. So, if we are in any doubt (e.g. after a big move) it's better to pass on that IB rather than trade against the rules. I do trade retracements after big moves, but those trades are not DIBS.
One Chart is Worth Ten Thousand Words.
  • #5,166
  • Aug 26, 2008 7:04am Aug 26, 2008 7:04am
The u/c dibs didn't work out.
  • #5,167
  • Aug 26, 2008 7:05am Aug 26, 2008 7:05am
Hi to everybody,

I'm very happy to have find this trhead about trading the inside bar (or candle). I was studing it by myself since a bit of time, but when I encountered PeterCrown posts, for me was like a bomb, especially the filter for the day up&down at 6:00 gmt.

I have some experience with futures trading, I traded nont continuatevely for about four years the DAX, FIB, BUND, STOXX, SMI and some other, so, I have no experience with the forex. I'm from Italy, and in my country forex is not so popular like te rest of the world....

So I find FF and hi forum and this beautiful tread "No Free Lunch but all the Free Coffee you can drink." started by Bemac in wich PC explains his method.

First I finished it, and now finally I read all the second tread started by Jarroo, improving myself in learning the DIBS method.

By the way, PC said that non all the IBs are the same: may be the he takes only the lower? He always said to look to the R:R ratio, so the low is the potential stop loss, the more will be the R:R...isn't it?
money... it's a gas baby, can't you take it! venezia
  • #5,168
  • Aug 26, 2008 7:08am Aug 26, 2008 7:08am
I agree with Jaroo - R/R ratio with H4 and higher is not as good as with H1.

I did some basic "express" backtesting (cable, 1Q2000) with H1 compared to H4. H1 produced better results with smaller drawdown.

Candle size on H4 is bigger than H1, yet the move potential is comparible. If you can catch a 100-pip move on H1 risking 10 pips (1:10), you are not as likely to catch (at least, not as often) 500 pips with H4 when risking 50 pips.

In my view, H4 IBs do work, but R/R does not often exceed 1:1 (actually, the same statistics - i.e. 1:1 being most likely outcome - was given for H1 IBs too, but in my experience H1 consistently gives 1:2 and higher).
One Chart is Worth Ten Thousand Words.
  • #5,169
  • Aug 26, 2008 7:44am Aug 26, 2008 7:44am
Quoting rusty105
On a day like today when there has been some big moves already, with no DIBS. If a DIBS signal comes along, in the same direction, do you take it? EURUSD has gone down >100Pip, and the trend is down. Do you take another short signal, or wait till after a retrace, if any?

Rusty
Here's my view:
The ADR is something to consider when taking any trade in the direction of the trend on any given day. If we have already seen 70-80% move of the ADR then chances are that we will see some kind of retracement sooner rather than later. Maybe price will move to 100-120% of the ADR before retracing, and often enough there's a retracement. Getting in late (when we have 70-80% ADR move) means that our stoploss is more vulnerable when the retracement comes, which also means that there's smaller chance to make a runner out of the free trade. Also when taking these trades, we need to make sure where the next s/r level is, and that means that we should look for levels where the retracement might start. If we can get to BE before that level, we should take the trade. BE could be ashieved by taking of 2/3 of the position at 2:1 to make sure that we get to BE since this is "easier" than 1:1. If not then there's no reason to take the trade. The safest play would be to wait but there are days where price moves with seemingly no end. So just passing up on a valid DIBS setup isn't going to be good those days. That's why I always say: Watch the price action.
  • #5,170
  • Aug 26, 2008 7:47am Aug 26, 2008 7:47am
Quoting Forex007
Rusty, I was thinking along the same lines and asked the above questions (a few time ) but having considered the (predictable ) replies, I was "forced" to agree: the rules for taking (or not) IBs were given by PC who traded those rules (successfully) for over 10-15 years. So, if it ain't broken, why fix it.

True, DIBS doesn't catch all the moves, and at times the "right" move is not the same as indicated by DIBS rules. However, the current DIBS rules work; if we introduce "improvements", the consistency of those rules could be violated. So, maybe the improvements will allow to catch some "missed" moves, but there is NO g'tee that in the long-term the improved rules would produce good results.

That doesn't mean you shouldn't experiment, though...
PC doesn't take every IB because it's valid according to the rules, he uses his own discretion when choosing which ones to take. He never really discussed that and left that to us to find out from our own experience. So adding your own discretion doesn't mean you are changing the system...

Quoting Forex007
No matter how good and valid our analysis is, that still means we are "second-guessing" IBs.

PC said that not all IBs are equal. So, if we are in any doubt (e.g. after a big move) it's better to pass on that IB rather than trade against the rules. I do trade retracements after big moves, but those trades are not DIBS.
All IB's should be second-guessed in my opinion since not all IB's are the same, that is clear from PC's posts. We aren't supposed to jump in on every IB...
  • #5,171
  • Aug 26, 2008 7:55am Aug 26, 2008 7:55am
If proof was ever needed just see attached chart for an IB on swissy that has just occurred. The day is up so you would trade LONG. BUT, the ATR for the day is already at 99% of the 3-day average making it a much higher risk trade. So its time to pass. Someone was asking about EUR - this is at +130% using the same filter.

Now look where swissy has gone.
Attached Image
  • #5,172
  • Aug 26, 2008 8:02am Aug 26, 2008 8:02am
Quoting NowAndLater
PC doesn't take every IB because it's valid according to the rules, he uses his own discretion when choosing which ones to take. He never really discussed that and left that to us to find out from our own experience. So adding your own discretion doesn't mean you are changing the system...
All IB's should be second-guessed in my opinion since not all IB's are the same, that is clear from PC's posts. We aren't supposed to jump in on every IB...
Totally agree with you. good to see that we think the same. you are again da man, NL.

a good example is the IB on EY at 10.00, which I didnt take because I considered it came after a strong fall. Well, this time I was right. On the other hand, for me EY has been performing the worse in DIBS until now. Any1else shares the same belief?
We leave no soldier behind.
  • #5,173
  • Aug 26, 2008 8:02am Aug 26, 2008 8:02am
This is also why PC said that the best trades are the ones taken as early in the day as possible. This would correspond with the probability that there hasn't been a big move yet.
  • #5,174
  • Aug 26, 2008 8:10am Aug 26, 2008 8:10am
I took the EY last night, caught it going up and down. The best bet is to take trades going with the previous day trend which was down.
  • #5,175
  • Aug 26, 2008 8:20am Aug 26, 2008 8:20am
Quoting grAgol4
Here's a easy to modify calc for DIBS.

(the TTO stuff is a reminder for me because I use EFX. Change it to whatever you want)
Firefox uses F5 to reload the page and start over.
Hi, I downloaded it and try, but it seems to me that you don't take care of the spread, is it correct?
money... it's a gas baby, can't you take it! venezia
  • #5,176
  • Aug 26, 2008 8:26am Aug 26, 2008 8:26am
Is someone of you take this stop & reverse?
Attached Image (click to enlarge)
Click to Enlarge Name: 1.gif Size: 13 KB
money... it's a gas baby, can't you take it! venezia
  • #5,177
  • Aug 26, 2008 8:28am Aug 26, 2008 8:28am
Quoting mrmarco
Is someone of you take this stop & reverse?
If you mean the last IB - it's above the daily open, so for me it's a no.
  • #5,178
  • Aug 26, 2008 8:29am Aug 26, 2008 8:29am
g/y dibs now free running.
  • #5,179
  • Aug 26, 2008 8:31am Aug 26, 2008 8:31am
Quoting NowAndLater
It's above the daily open, so for me it's a no.
yes I supposed it, but when to tak the "stop &reverse?" or the buy, or the sell, will always be on the wrong side respect of the opening price...
money... it's a gas baby, can't you take it! venezia
  • #5,180
  • Aug 26, 2008 8:32am Aug 26, 2008 8:32am
Quoting mrmarco
Hi, I downloaded it and try, but it seems to me that you don't take care of the spread, is it correct?
Add your spread to the candle size or modify the script.
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