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The DIBS Method... No Free Lunch continues

  • #6,301
  • Dec 22, 2008 3:29am Dec 22, 2008 3:29am
Quoting Guerrillawar
I'm feeling happy. I just had a great trade and it happened so fast. Got to my desk at 0700 London time. By 0745 I was mostly out of a super trade. I thought I shall give some examples how I trade this method.

Firstly, I have system A and system B and I don't work in 1/2's I work in 1/3's. System A exits 2/3's of position when I reach Risk x 3. System B exits 2/3 when I reach Risk x 1. When I feel confident about my position or it has a greater edge according to my records I use system A. When the position is taken and its not the best position...

This is the beauty of the DIBS method. Its a method, not a strict system where the rules must be followed or it will not work. Your post here proves that. Well done.

The DIBS Euro trade, I saw it off a Daily and Weekly PPZ.
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Indicators show the past. Price Action "Indicates" the future.
  • #6,302
  • Edited 4:30am Dec 22, 2008 3:44am | Edited 4:30am
I don't know if anyone on here has tested this or not. Rich Dennis of the Turtles fame used some variation of this. I think he used if the previous signal worked he would pass on the next one. My idea is if two consecutive triggers worked really well it may be a good idea to pass on the third if your time statistics aren't on your side.
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  • #6,303
  • Dec 22, 2008 4:36am Dec 22, 2008 4:36am
Quoting jarroo
The DIBS method is one of the surest "unknown" methods available for making money in Forex. I wish I had invented it.
Having traded the concept personally for more than 15 years, I know how good and also how irritating it can be. As you mentioned, trading during the active hours is key to the best trades. It is hard to beat the combination of low risk and high probability. Yet it stays in obscurity, which is the way of all good methods.
I'm not a believer so when I hear about some strategy which looks somehow profitable the first thing I do is to do some research and try it myself.

The DIBS approach is very interesting and it makes sense as an inside bar in H1 has actually a meaning... maybe most of readers of this thread did not realize it but it's not just about two bars.
In fact an engulfed bar in H1 (inside bar) could be a significant pattern in M15, M5 or M1... like a triangle, a pennant, flag... and that's why it makes perfectly sense to trade its breakout.
I checked myself a few examples and I was positively impressed with this.

That said I needed to have something more than a good impression to start trading it.
I know somebody claims he has been trading DIBS for a long time with good profit and U all have seen good examples here. Nevertheless in my experience I know for sure that our minds tend to pick up from charts positive examples discarding bad ones as they do not exist... so that we do not even see them when they are in front of our eyes... and in most of cases if we see a loosing example we think we would have not traded it for some reason.

That's why I rely only on automated systems... given the rules they do not make exceptions.
End of the story: as soon I was familiar enough with the DIBS I developed an EA to trade it for me.
My main concern was: how profitable is it? which could be the win%? and which the ratio average win / loss?

My EA is following strictly all the rules described in this thread and trades the DIBs correctly. Stoploss is implemented with a 20 bars period MA.
Backtesting on 2008 shows a series of positive trades... but the overall result is nothing astonighing as described here in the thread. Certainly is not as good as it is presented. The account balance raises from 10k to justo 35k or so.
In the previous years it is simply a disaster. The account is always drained to 0.

These are my findings, I'll post some reports as soon as I have time. I wonder if anyone has developed another EA for this method and which are the results.
  • #6,304
  • Dec 22, 2008 5:00am Dec 22, 2008 5:00am
Quoting Zypkin
My EA is following strictly all the rules described in this thread and trades the DIBs correctly.
I'm really interested in this EA that follows the DIBS rules so strictly. Can you please post these rules that you have used?

Seriously if you've read this and the other thread you would by now know that this is a method used with discretion. So unless your EA can use discretion as well, it's totaly useless. If it's purely based on a mechanical approach which means that trading every inside bar which has a buy/sell above/below the daily open, you need to go back to post 1 of both threads and read them again. If the EA is not purely mechanical, post it here with the code so we can give you some constructive criticism. But I can tell you right now - it better be a very long code, because it's needed...

This method is a price action method. Once you understand what that means you will turn profits from this method, and any other price action method and there are few here on FF that are really good. Building an EA based on price action is much harder than people will think. There are EA's used by the big players, but they are so sophisticated and intelligent and takes a lot of time to develop. I haven't seen one here on FF, and I am pretty sure that I will never see one either, as it really would make no sense to just give away such hard work for free as this really is.
  • #6,305
  • Dec 22, 2008 5:05am Dec 22, 2008 5:05am
Quoting Zypkin
I'm not a believer so when I hear about some strategy which looks somehow profitable the first thing I do is to do some research and try it myself.

The DIBS approach is very interesting and it makes sense as an inside bar in H1 has actually a meaning... maybe most of readers of this thread did not realize it but it's not just about two bars.
In fact an engulfed bar in H1 (inside bar) could be a significant pattern in M15, M5 or M1... like a triangle, a pennant, flag... and that's why it makes perfectly sense to trade its breakout.
I checked myself...
Interesting how you point out that not all DIBS are good entry triggers, but then state you trade with an EA.

Discretion is what makes any system profitable or not. If no discretion based on knowledge is used when trading this system, of course it's not going to work.

EA's are unable to provide that edge, the decision making process based on knowledge and experience, or discretion, as I like to call it.

Hey, are you ramping up to sell something
  • #6,306
  • Dec 22, 2008 5:14am Dec 22, 2008 5:14am
Quoting Zypkin
maybe most of readers of this thread did not realize it but it's not just about two bars.

That's why I rely only on automated systems... given the rules they do not make exceptions.
End of the story: as soon I was familiar enough with the DIBS I developed an EA to trade it for me.
My main concern was: how profitable is it? which could be the win%?...
"maybe most of readers of this thread did not realize it but it's not just about two bars."

You couldn't be more correct! The way Peter explained this method was to use it as a means of risk management for an intelligent trader. This is not a red light- green light system.


You clearly have no understanding of the market. This is probably the best year in all of history for this system. First educate yourself, learn about the market then pass judgment on a system.If your an I.T. guy you probably have no clue how the market works so your testing is worthless. Get a real mentor than test intelligently. Only then will your I.T. background become a great asset. An I.T. background with out proper understanding does much much more harm than good. Bottom line the market feeds on fear and greed not mathematical certainties.

End of story Dibs does the task its designed to do better than anything else. Its task is to manage risk. This fact is indisputable. And if you can dispute it show me because I would definitely like to know more ways to manage risk.
  • #6,307
  • Dec 22, 2008 5:25am Dec 22, 2008 5:25am
Quoting Zypkin
I'm not a believer so when I hear about some strategy which looks somehow profitable the first thing I do is to do some research and try it myself.

The DIBS approach is very interesting and it makes sense as an inside bar in H1 has actually a meaning... maybe most of readers of this thread did not realize it but it's not just about two bars.
In fact an engulfed bar in H1 (inside bar) could be a significant pattern in M15, M5 or M1... like a triangle, a pennant, flag... and that's why it makes perfectly sense to trade its breakout.
I checked myself...
Did your EA get you in this trade. 200 pips in two hours. You probably don't make 200 pips in one month. To bad I missed it as well because my concentration was off. But it was a valid set-up.
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  • #6,308
  • Dec 22, 2008 6:51am Dec 22, 2008 6:51am
Here is an example why the 0:00 Chicago open time is simply not enough. However, it is a rule that should be not broken.

Peter mentioned the hot-hand concept and I believe he meant it. You don't want whipsaw chop. Price should command decisively a key moving average on the h1.
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  • #6,309
  • Dec 22, 2008 7:12am Dec 22, 2008 7:12am
i really don't like the way you make your point

Quoting Guerrillawar


You clearly have no understanding of the market.
and how the heck would you know whether he has it or not

Quoting Guerrillawar
End of story Dibs does the task its designed to do better than anything else. Its task is to manage risk. This fact is indisputable.
everything is disputable....and we are here to discuss it...

i have the strange impression that you're tryin to shut other's mouth...why would you do that?...
the guy is making his point...you're making yours. this is how the discussion goes on. i don't see why you or anyone else should tell others what they should discuss or not and decide just upon one single post whether someone has any idea about the market or not....

let the others express their opinions
  • #6,310
  • Dec 22, 2008 7:14am Dec 22, 2008 7:14am
Quoting NowAndLater
Seriously if you've read this and the other thread you would by now know that this is a method used with discretion. So unless your EA can use discretion as well, it's totaly useless.
Dear NowAndLater,
could you please define "discretion"?
To me discretion is nothing more than another set of rules. A set of basic rules has been defined for trading DIBS and saying that they have to be used with discretion means that the given set of rules is not complete and exhaustive.
So, if you can put in any logic form the "discretion" you are talking about I'd be happy to verify how it performs.
I've heard about "discretion" lot of times but frankly (and sadly) the need for discretion comes always from the need to raise an exception to a set of rules that otherwise wont work.

Quoting Guerrillawar
You clearly have no understanding of the market. This is probably the best year in all of history for this system.
Aggressive reactions like "you clearly have no understanding of the Market" are exactly what I expected writing my first post.
Well, you dont know me, and you dont know my understandings of anything. I'm not questioning your understandings... just saying that the set of rules given is not enough to use this strategy and discretion is not a rule by itself. It would be nice from time to time to find a collaborative attitude instead of folks ready to crucify you as soon as you say something different from the main stream of thougths.
For your information I know systems that this year performed way better that DIBS. One of my EAs gained 1.6millions from 10k.. I guess 2008 will be remembered for a long time. Still, DIBS with no "discretion" performed just enough.

Quoting Jimmy Jones
Interesting how you point out that not all DIBS are good entry triggers, but then state you trade with an EA.
My EA trades all the DIBs which falls into trading hours because no rule is given (or I didnt get it... remeber that discretion is not a rule itself) on how to chose which one to pick and which one to ignore.
If you decide not to trade a DIB setup there must be a sound reason. I'm with you that experience can tell. But my main goal is to transfer this knowledge into an automated systems and answers like "it shall be used with discretion" are not good to me.

I agree with NowAndLater that I may miss some "rule" as this thread is neverending. Personally I think at this point in the thread this is a good chance to summarize what has been said so far and gather the main rules together. How about that? ...do U Traders think you can step down from your podium and do it together?

Quoting Jimmy Jones
EA's are unable to provide that edge, the decision making process based on knowledge and experience, or discretion, as I like to call it.
Wrong. EAs do what programmers tell them to do. Programmers are not always traders, analysts or engineers... that's why most of the EAs are just trash.
On the other hand traders and analysts are not good programmers and the main problem is that anyone with a good trading experience is not able to translate it in a closed set of rules. As simple as that.

So, if you claim you are a good trader I ask you to sit with me and discuss what's "discretion" and code it down.

For your information I dont put myself neither in one or other category. I have the formation of a trader, a good one, but for a series of circumstances I've spend most of my life coding for living. I can code pretty much everything I need and from the ofher side you wont find a topic on trading on which I cant give you my own opinion.


So, introductions made, are you guys wiling to move a step further or I shall live you glued to your screen waiting for the next setup?


Cheers,
Zyp
  • #6,311
  • Dec 22, 2008 7:17am Dec 22, 2008 7:17am
Quoting Guerrillawar
Did your EA get you in this trade. 200 pips in two hours. You probably don't make 200 pips in one month. To bad I missed it as well because my concentration was off. But it was a valid set-up.
Which pair is it?
  • #6,312
  • Dec 22, 2008 7:26am Dec 22, 2008 7:26am
Quoting Zypkin
So, introductions made, are you guys wiling to move a step further or I shall live you glued to your screen waiting for the next setup?
I'll stay glued to my screen, thanks for trying to help though.

If being successful was as easy as getting a good programmer to create an ea and then letting it run, there would be no market to trade in.

Of course I am new to this game and perhaps I am totally off, but experience in other areas of life tells me anything worth having is worth working for.
  • #6,313
  • Dec 22, 2008 8:31am Dec 22, 2008 8:31am
Quoting prunto
i have the strange impression that you're tryin to shut other's mouth...why would you do that?...
the guy is making his point...you're making yours. this is how the discussion goes on. i don't see why you or anyone else should tell others what they should discuss or not and decide just upon one single post whether someone has any idea about the market or not....

let the others express their opinions
Thanks prunto,
if everyone shared your point of view we would be able to achieve great results here.
  • #6,314
  • Dec 22, 2008 8:45am Dec 22, 2008 8:45am
Quoting Zypkin
Thanks prunto,
if everyone shared your point of view we would be able to achieve great results here.
what great results? Your exact words!

"In the previous years it is simply a disaster."

Go tell that to pros on the Merc or CBOT and see how serious they take your million dollar EA. Any way I don't wish to argue with you. Don't trash something that is good, if you don't know all the ins and outs. Good luck in your EA research maybe something will turn up for you and have a nice christmas.
  • #6,315
  • Dec 22, 2008 10:09am Dec 22, 2008 10:09am
Here is an example of a trade I just took and squared up. I know we are supposed to let things run but I just have a feeling price is not going to go much further today.
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  • #6,316
  • Dec 22, 2008 11:14am Dec 22, 2008 11:14am
Quoting Guerrillawar
Go tell that to pros on the Merc or CBOT and see how serious they take your million dollar EA. Any way I don't wish to argue with you. Don't trash something that is good, if you don't know all the ins and outs. Good luck in your EA research maybe something will turn up for you and have a nice christmas.
Dear Guerrillawar,
arguing is not really what I aimed to (I'm not the one who brands war in his nick here... LOL).

About my other EA... if it was to be taken seriously I wouldnt be here talking about your DIBS. I simply pointed out that DIBS is not the only method which performed really well during 2008... and just because it seems to be good it doesnt mean it is.
I wish I wrote that EA earlier and used it during 2008.

Finally, back to our discussion (or my own if you want since it seems you dont listen to me at all) I'm used to quantify the performance of a trading strategy and here I've so far seen a lot of examples but no figure to summarize the success of this method.

So, are you or somebody else able to tell us which is the win% of DIBS method... say over last couple of years?
And what about the average win / loss ratio?

I wrote an EA aiming to asses that... if you have real historical stats from your trading you may be able to enlight us all.

Zyp
  • #6,317
  • Dec 22, 2008 11:43am Dec 22, 2008 11:43am
Quoting Zypkin
Dear Guerrillawar,
arguing is not really what I aimed to (I'm not the one who brands war in his nick here... LOL).

About my other EA... if it was to be taken seriously I wouldnt be here talking about your DIBS. I simply pointed out that DIBS is not the only method which performed really well during 2008... and just because it seems to be good it doesnt mean it is.
I wish I wrote that EA earlier and used it during 2008....
Firstly, you seem like a reasonable guy. I wish you no negative energy. I guess I came across wrong. I will put an end to all this bickering and try to bring something positive out of it all.

If you read Peters first post (I think) he states that many people struggle with the I.B. technique. If you want to take advantage of this method in some manner in your trading you have to make a paradigm shift in how you view the markets. The market is not a mathematical problem to solve. There is always a human element that is difficult to quantify. This element is what shreds almost all short term EA's.

If you want to run an EA I suspect the only place you will earn money on a consistent basis is a long term trend following method. In the short term you may do well with an EA but over a two, three year period your account will blow up or you will need to be clever and turn the thing off. I'm not saying quantative analysis is garbage or all algorythms are doomed to total failure. If you can find one that is super high frequency and risks very little and when it wins it wins big you may have something to work with. Almost anything else is pure luck and won't last for long. Now actually acheiving this high freqency EA is going to be the hardest task you have ever done. Geniuses are on the job from the best enginerring schools trying to do this very thing. And they still haven't figured it out.

The reason I got so irritated is that the whole message that Peter was trying to say keeps getting muddier and muddier with these system inquires. I.B.B. is not a system. It is a paradigm to manage risk and thats it. If your lossses are smaller than your gains on a consistent basis you will at least breakeven. Which is a huge victory for the average trader. Again I will repeat this is not a system this is a philosphy on risk management. Thats why Peter said most will be frustrated with this mehtod. They think its a system its not. Its merely a concerete way to think about risk management. When you finally get it and it clicks inside your head you will realize that you don't need to win in the market. You only need to cover the exspense of your losses. This method absolutley allows for that to happen.
  • #6,318
  • Dec 22, 2008 12:12pm Dec 22, 2008 12:12pm
Quoting Guerrillawar
The reason I got so irritated is that the whole message that Peter was trying to say keeps getting muddier and muddier with these system inquires. I.B.B. is not a system. It is a paradigm to manage risk and thats it.
Got your point, no need to add more.
What I have to say is that it's plenty of interesting ways to chose your hard stops... does stucking on IB pay really so well?
We all have limited time and money to play this game and we all are trying to chose the best way we can.

I have more to add but kind of short in time right now. Thanks for the benefit of doubt
  • #6,319
  • Dec 22, 2008 3:13pm Dec 22, 2008 3:13pm
Is anyone aware of any of the DIBS MT4 indicators which work on H4 charts and which also disregard open and close times (i.e. that indicate DIBS setups on the H4 regardless of the time?)

Any assistance would be greatly appreciated.

- Zer0
  • #6,320
  • Edited 4:37pm Dec 22, 2008 3:17pm | Edited 4:37pm
Quote
There are others : NowAndLater, Dale, razeldazl . . . Oh let's not forget Peter Crowns . . . etc. There are many more.

Hi Jarroo & gang.



I am honored to be considered a worthwhile contributer to this thread.

I hope to contribute more in the future.


Best regards to all


Dale
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