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Inside Bar Trading Revisited

  • #21
  • Jan 12, 2009 11:02am Jan 12, 2009 11:02am
Quoting billbss
I don't know if you're looking for input, but if you are, here's my 2 cents.

I think you're wasting your time on IBs.
I've seen a couple of computer runs on candle formations, and they both indicated that the IB had no predictive properties.
These were done on futures and not forex. There may be a difference, but I doubt it.

The results you show tend to back this up.

On a random coin toss entry, with a SL twice the size of a TP, you will get about 67% wins. That appears to be what you got.

You'll lose money because of the overhead of the spread....
You may well be right and I appreciate the comments.

Bear in mind that there's nothing currently in the EA that determines if a breakout from the IB is good. There are some things that we can do to try and reduce the number of false breakouts that lead to losses (he says optimistically).
  • #22
  • Jan 12, 2009 11:05am Jan 12, 2009 11:05am
IB on u/c pending sell @ 1124
  • #23
  • Jan 12, 2009 11:14am Jan 12, 2009 11:14am
Quoting croesesFX
IB on u/c pending sell @ 1124
Thanks croesesFX, we're also here -> http://embed.mibbit.com/?channel=%23insidebars
  • #24
  • Edited 1:59pm Jan 12, 2009 11:28am | Edited 1:59pm
Here's a quick run for USDJPY.

USDJPY ATR*1/2 128 Trades, 102 winners (80%), -£39.96
USDJPY ATR 97 Trades, 64 winners (66%), £0.64
USDJPY SL 102 Trades, 84 winners (82%), £0.87


So, this time the 1/2 ATR was still better (more winning trades) than the ATR.

It does seem to indicate that smaller TP is better. More testing required on this.
  • #25
  • Jan 12, 2009 11:52am Jan 12, 2009 11:52am
Quoting croesesFX
IB on u/c pending sell @ 1124
out for +16
  • #26
  • Jan 12, 2009 11:56am Jan 12, 2009 11:56am
Quoting 1ka
You may well be right and I appreciate the comments.

Bear in mind that there's nothing currently in the EA that determines if a breakout from the IB is good. There are some things that we can do to try and reduce the number of false breakouts that lead to losses (he says optimistically).
For example not take an inside breakout when the trigger bar is double the ATR? Cause then it´s not consolidating, just "normal" but less than the "spike". If ya know what i mean
"White collar crime deserves a blue collar beating!" - 8fingers
  • #27
  • Edited 12:20pm Jan 12, 2009 12:09pm | Edited 12:20pm
Quoting DramaKing
For example not take an inside breakout when the trigger bar is double the ATR? Cause then it´s not consolidating, just "normal" but less than the "spike". If ya know what i mean
Actually, that's not a bad idea. Currently I can restrict the EA from trading if the IB is over a set value, but perhaps it can be based around a multiple of the ATR and the trigger bar. I'll investigate. Thanks.
  • #28
  • Edited 2:33pm Jan 12, 2009 1:55pm | Edited 2:33pm
So what happens if we restrict trades based upon the size of the IB (i.e. the High/Low range when an IB is formed)?

I was curious to see if there was any correlation between IB size and winning trades. Here are the results from trades on EURUSD taking profit at 1/2 ATR and Full ATR:


IB Limit 600, 145 trades, 126 wins (87%), £119.16
IB Limit 100, 141 trades, 120 wins (85%), £67.11
IB Limit 80, 134 trades, 113 wins (84%), £19.99
IB Limit 60, 114 trades, 92 wins (81%), £-15.25
IB Limit 40, 87 trades, 70 wins (81%), £12.11
IB Limit 20, 15 trades, 8 wins (53%), £0.34

Looking at the results there does seem to be a simple correlation between IB size and losing trades. Disregarding the IB Limit 20 result, there is a tendency for the number of wins to decrease slightly, but nothing major (i.e. regardless of IB size, the percentage of wins remains within 6%, probably statistical error).

Note that we're interested in percentage wins, the profit figure is included only to indicate there is profit. This figure will become important as we try to reduce losing trades.
  • #29
  • Jan 12, 2009 2:52pm Jan 12, 2009 2:52pm
Firstly I think it's great that you have taken this thread forward,and we can discuss Ibs without being told to f**k off.
I normally don't trade that often and will trade pin bars,at swing highs ,swing lows on 4 hr chart or daily.But sometimes the stops can be huge, so I think this Ib method has real potential,they do work ,and I have been getting similar win ratios to the one's you have posted on various pairs.
For me what seems to work well is to take 20 profit and let the rest run,but manage it on 4 hr so you don't close your trade out to early,and when it's realy going in your favour use the 10 day moving average as your exit.
  • #30
  • Jan 12, 2009 3:04pm Jan 12, 2009 3:04pm
The pure IB method uses a 30 minute timescale. What effect do other timescales have?

Running the EA we get:

EURUSD 1M 1267 trades, 912 wins (71%), -£134.85
EURUSD 5M 2694 trades, 2109 wins (78%), -£391.19
EURUSD 15M 2179 trades, 1743 wins (79%), -£393.72
EURUSD 30M 783 trades, 658 wins (84%), £57.19
EURUSD 1H 880 trades, 716 wins (81%), -£189.15
EURUSD 4H 282 trades, 117 wins (84%), £223.01
EURUSD 1D 42 trades, 21 wins (57%), -£95.51

So again, disregarding the extremes, an 80% win ratio for most timescales indicating that timescale is not much of a factor (i.e. doesn't really change the win ratio).

Note that these results have been done over 12 months, and not previous one months timescale. This is to improve the results, statistically speaking, for the higher timescales.
  • #31
  • Jan 12, 2009 3:13pm Jan 12, 2009 3:13pm
Quoting sebby2468
For me what seems to work well is to take 20 profit and let the rest run,but manage it on 4 hr so you don't close your trade out to early,and when it's realy going in your favour use the 10 day moving average as your exit.
Thanks sebby.

Do you set up on the 4HR IBs, or use the 30M IBs? Also, after taking 20pips, do you reset the SL to your break even?

I'm always looking for good exit points and an MA may be something I can use in the EA.
  • #32
  • Jan 12, 2009 3:43pm Jan 12, 2009 3:43pm
Quoting 1ka
Thanks sebby.

Do you set up on the 4HR IBs, or use the 30M IBs? Also, after taking 20pips, do you reset the SL to your break even?

I'm always looking for good exit points and an MA may be something I can use in the EA.
I've only being testing this strat out on demo for just over a week,the win ratio's are there,we just need to find the best way to get the most out of each trade.
The set up I have been using has been Ibs on 30 min,take some off at plus 20 and set stop loss to -5 and let it run,and depending on the momentum of the trade,switch to 4 hr chart to manage trade if current bar is over/under 10 day moving average (not going through it},and exit when price crosses ma you will get a lot of good trades and some of them will be huge
  • #33
  • Jan 12, 2009 3:48pm Jan 12, 2009 3:48pm
Quoting sebby2468
I've only being testing this strat out on demo for just over a week,the win ratio's are there,we just need to find the best way to get the most out of each trade.
The set up I have been using has been Ibs on 30 min,take some off at plus 20 and set stop loss to -5 and let it run,and depending on the momentum of the trade,switch to 4 hr chart to manage trade if current bar is over/under 10 day moving average (not going through it},and exit when price crosses ma you will get a lot of good trades and some of them will be huge
Thanks, I shall bear this in mind when writing the exit strategy for the EA.

My initial attempts at using a trailing stop don't really get the best out of major trends, as they go back and forth whilst trending and hit the SL before the trends finished.
  • #34
  • Jan 13, 2009 2:30am Jan 13, 2009 2:30am
IB on e/g pending buy @ 9054 above trendline
  • #35
  • Jan 13, 2009 2:50am Jan 13, 2009 2:50am
http://forums.babypips.com/free-fore...s-per-day.html
  • #36
  • Jan 13, 2009 3:37am Jan 13, 2009 3:37am
Quoting croesesFX
IB on e/g pending buy @ 9054 above trendline
closed @ daily r1 for + 21
  • #37
  • Jan 13, 2009 5:27am Jan 13, 2009 5:27am
Running the EA on the demo, even though it's incomplete. Got it's first 'win' on EURUSD.
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  • #38
  • Jan 13, 2009 5:37am Jan 13, 2009 5:37am
Quoting croesesFX
closed @ daily r1 for + 21
Please feel free to join us in the room
  • #39
  • Jan 13, 2009 7:12am Jan 13, 2009 7:12am
Another win, but I really need to sort out trend trailing. Even a trailing SL would have netted double the profit.
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  • #40
  • Jan 13, 2009 7:43am Jan 13, 2009 7:43am
Another win on this. 3 for 3.
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