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  • #7,081
  • Mar 18, 2009 7:40am Mar 18, 2009 7:40am
Anyone catch the USD/CHF IB downside breakout? It was too quick for me. (I need to learn how to set stops on MT4!).
  • #7,082
  • Mar 18, 2009 7:40am Mar 18, 2009 7:40am
Quoting tradertt
[font=&quot]Trading the "hot hand": Trading the strongest/weakest market is actually really simple. For example, yesterday the Eur/Usd was up more proportionately than the Usd/Chf was down. This was because the Usd/Chf wasn't even a down day. Definitely off its highs but not down relative to last week's close. The Eur/Usd was up, up and away! So that is the market you buy.


See this statement from Peter....
In fact he's saying that he trades the strongest currency against the weakest....

Let's say we have 2 DIBS setups..E/U and U/C.... most of the time (but not always) they move on opposed directions...

Let's say E/U is moving above the Daily Open, AND above the Weekly Open. Let's say now that U/C is moving bellow Daily Open BUT above Weekly Open.... The HOT HAND is E/U, cause its momentum is much more defined.... (above Daily AND Weekly open).... One could trade the U/C, but its momentum is less defined (below Daily BUT above Weekly open).... I suggest taking the E/U and let the U/C go (or entering with smaller lotsize...)

So, nothing to do with ADR...., cause when you are entering the trade, typically the ADR is far away...

Hope that helped....

Cheers!

HT
Many share my views with me. But I don't share them with them...
  • #7,083
  • Edited 7:49am Mar 18, 2009 7:46am | Edited 7:49am
Quoting tradertt
Trading the "hot hand": Trading the strongest/weakest market is actually really simple. For example, yesterday the Eur/Usd was up more proportionately than the Usd/Chf was down. This was because the Usd/Chf wasn't even a down day. Definitely off its highs but not down relative to last week's close. The Eur/Usd was up, up and away! So that is the market you buy.


See this statement from Peter. When he said that he trades the strongest or the weakest market he will trade the one that has moved the most for the day....
I was thinking this also. I'm not sure that ADR matters. This is a breakout strategy, and we are looking to catch the big breakouts which are outside the normal/average price action.

I don't recall Peter mentioning ADR as a filter. In fact, doesn't he mention that most people are tempted to trade the reversal if a market has moved a lot, and suggests we go WITH the trend for the day?

If he says trade the 'hot hand' then, until I learn otherwise, that is what I plan to do.
  • #7,084
  • Mar 18, 2009 7:48am Mar 18, 2009 7:48am
all out, USD/JPY stopped out after 3 days and it was a free trade.

So far I have taken 4 trades and lost 3 to BE and one to -24. Guess that averages my losses to 6 pips.

I have made all the right decisions but have just been stopped out. My GBP's were a bummer but because I had action I missed the swissy inside bar which would have been nice.

It is funny because whilst I havent had any real winners (the most i was up on my USD trade was 50 pips) my losers are averaged and my account is still solid after 4 trades. Im not down because whilst I have been stopped out heading in the right direction, I have been stopped out heading in the right direction (as opposed to wrong). I am also still optimistic about future results.

To those on the free trains best of luck. I know the GBP has retraced some but I still think we are heading downwards, this will most likely be a minor retrace.

take care all
  • #7,085
  • Mar 18, 2009 7:49am Mar 18, 2009 7:49am
Quoting HouseTrader
In fact he's saying that he trades the strongest currency against the weakest....

Let's say we have 2 DIBS setups..E/U and U/C.... most of the time (but not always) they move on opposed directions...

Let's say E/U is moving above the Daily Open, AND above the Weekly Open. Let's say now that U/C is moving bellow Daily Open BUT above Weekly Open.... The HOT HAND is E/U, cause its momentum is much more defined.... (above Daily AND Weekly open).... One could trade the U/C, but its momentum is less defined (below Daily BUT above...

well put House!



today is a good dibs day
  • #7,086
  • Mar 18, 2009 7:56am Mar 18, 2009 7:56am
Quoting takingthepip
Anyone catch the USD/CHF IB downside breakout? It was too quick for me. (I need to learn how to set stops on MT4!).
Update: When I try to set pending orders, eg: buy/sell stops, on MT4, I get a message saying that the "price must differ from market price by 60 pips".

That's ridiculous.

Can anyone please advise? There must be a way to reduce this, or is it broker dependent?
  • #7,087
  • Mar 18, 2009 7:56am Mar 18, 2009 7:56am
Quoting takingthepip
I was thinking this also. I'm not sure that ADR matters. This is a breakout strategy, and we are looking to catch the big breakouts which are outside the normal/average price action.

I don't recall Peter mentioning ADR as a filter. In fact, doesn't he mention that most people are tempted to trade the reversal if a market has moved a lot, and suggests we go WITH the trend for the day?

If he says trade the 'hot hand' then, until I learn otherwise, that is what I plan to do.
from my understanding he would be trading in the direction on the big day because there is more likelyhood that he will end up no worse of than BE. If he has an order on the market side of an IB the break out still has to occur for him to be in the market. After a big move there might be more of a chance that an IB will offer a small amount of risk therefore making his first limit quite shallow. If at the end of the day the market retraces it is more than likely going to happen after the IB so there is a good chance that he would not be in on the day anyway but perhaps the next when the market continues direction (assuming he leaves IB trades on for more than a day if not executed).
  • #7,088
  • Mar 18, 2009 7:59am Mar 18, 2009 7:59am
to add to the above. the pound has dropped nicely so far today and there is potential to enter the IB that has formed last hour. If you look at the size of the IB candle compared to the movement candles for the day, the IB is less than half the size. So if you were in there is a good chance, especially after a retracement that you will get filled nicely.

The pound has room to move before hitting the bottom of the daily channel, which I think stops around 34-3400. thats 500 pips away
  • #7,089
  • Mar 18, 2009 8:01am Mar 18, 2009 8:01am
just somemore, i have taken a trade at 3985. reasons are fib and resistance coincide here. I have an entry for the IB too but this is just a trade I couldnt say no too. It is a small trade that if falls will merge with the IB candle and get me in for my full lot.

Sorry for posting a trade none IB related but i could be if it falls

  • #7,090
  • Mar 18, 2009 9:16am Mar 18, 2009 9:16am
Quoting takingthepip
Update: When I try to set pending orders, eg: buy/sell stops, on MT4, I get a message saying that the "price must differ from market price by 60 pips".

That's ridiculous.

Can anyone please advise? There must be a way to reduce this, or is it broker dependent?

well i assume your on 5 decimal places so 60 is 6 pips

regards
  • #7,091
  • Mar 18, 2009 10:12am Mar 18, 2009 10:12am
Quoting Dale
I have written words I thought would help. I have learned a few things too.

For now my contribution here is finished.

Thanks to everyone on this thread.


Best regards

Dale
Hey Dale;
Your contributions are and were most valuable. You will be missed, I also appreciate the PM's that you sent. Don't be a stranger, even if you just lurk from time to time. Good luck and many pips.

Jim
  • #7,092
  • Mar 18, 2009 10:23am Mar 18, 2009 10:23am
hello dale,

how did this system work out for you in the long term so far?
  • #7,093
  • Mar 18, 2009 11:34am Mar 18, 2009 11:34am
Quoting icarusfx
well i assume your on 5 decimal places so 60 is 6 pips

regards
Thanks Icarusfx.

It's not 100% clear to me yet, but it works.

  • #7,094
  • Mar 18, 2009 7:06pm Mar 18, 2009 7:06pm
Hi Folks:
I hope you guys caught a piece of that madness this afternoon. I was lucky enough to be in two different trades when things went nuts. I actually thought it was a glitch and called my broker to see if it was legit. The DIBS method got me in, it wasn't anything I did. Days like this can cure a lot of what ales you.

jim
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  • #7,095
  • Mar 19, 2009 5:25am Mar 19, 2009 5:25am
Quoting bigjim1958
Hey Dale;
Your contributions are and were most valuable. You will be missed, I also appreciate the PM's that you sent. Don't be a stranger, even if you just lurk from time to time. Good luck and many pips.

Jim
Seconded here! will miss your posts

Regards
  • #7,096
  • Mar 19, 2009 8:47am Mar 19, 2009 8:47am
This is where if you are in a trade in the right direction you are making big. USD is tanking big time. I got knocked out of all trades yesterday and have been a work pretty much since. I havent had a good look but there were some IB today where you would have some money.

Nice to see the Feb Reserve doing its damage again. The channel Breakouts where big for those who had them ready, me personally didnt see it coming at all. For most I dont think so either as the 1 hour drop in action yesterday was bigger than the whole daily average on all pairs. WAY to go bernake and co.

Well i might have to sit the rest of the week out. Friday will more than likely have a large degree of Profit taking from the moves so there might be some consolidation and then a pull back. Monday will be interesting.

So far this week I have lost all trades (5 in total) but the averages have been minimal due to some of the BE trades.

Hope you had a better week.

See yas next
  • #7,097
  • Mar 19, 2009 10:36am Mar 19, 2009 10:36am
I was in USDCHF too but took the profits too early by moving my stop closer and got stop out at 223 pips profit

I am still in USDJPY and currently at 435 pips profit
Took 2 lots and made 22 pips for the first lot and left the stop loss untouch for a free ride.

So total profits till current situation since yesterday is at about 700 pips

Just wanted to share the success of this system.
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  • #7,098
  • Mar 19, 2009 3:05pm Mar 19, 2009 3:05pm
Quoting brianduffer
http://www.forexfactory.com/showpost...postcount=1672
Thanks for the link. The indicator looks like it will be very useful.
  • #7,099
  • Mar 19, 2009 3:06pm Mar 19, 2009 3:06pm
Hello to everyone who has contributed and benefited from this thread. I am very impressed with the size and quality of this major thread on FF.

I've never posted here, but from time to time have checked the progress of this ever burgeoning and vital thread. I can honestly tell you that many excellent and clear explanations given in this thread far exceed what my personal frustration index could have handled.

You who have contributed can be very proud of your accomplishments, especially because of the difficulty for the "average" desirous trader to become successful. "Successful" in this case means to me someone who can depend on his trading operation as a quasi-reliable income source.

There is a reason why I'm making this post.

I got an interesting email from a former IBM engineer turned trader named Nathan who visited Forex Factory 2 months ago. He read the entire link of "No Free Lunch but all the Free Coffee..." (and the "NFLbatFC..continues..."), with more than a modicum of disbelief until he kept reading and reading, and decided to do something about it.

What impressed me was the work Nathan did before contacting me. He followed the prudent process of "trust but verify". All in all, before contacting me Nathan spent more than $3,500 in purchasing data, and 175 hours in programming and testing of the concept. He said he would have given up after just a few hours but the results of his research kept coming up better than random, something he had not experienced in his last 2 years of research of shorter term methods.

He programmed a fast computer correctly (He forwarded me his code) and went through 14 years of intraday data in the Gbp/Usd, the last ten years in Eur/Usd, Usd/Jpy and Usd/Chf to see if there was a statistical edge to the concept above that of random entry with a variable stoploss.

His conclusions: (with his permission)

 

  1. His version of DIBS standalone entry with no 1/2 profits taken, exit at trailing stop or entry stop- 3.7 times better than random entry/exits.
  2. With no curve-fitting necessary he found that virtually any logical trailing method was efficient enough to extract the edge. (moving averages, parabolic trail, time exits, etc.)
  3. Nathan found that there was another time period as statistically viable as the approximate 6:00 GMT timeframe disclosed in the "No Free Lunch but all the Free Coffee..." thread.
  4. Nathan tested futures bond, coffee, soybeans,cotton, etc. for out-of-sample testing-- with similar positive results.
  5. After simulating 18,554 Forex trades he calculates the profit factor of his simple version of DIBS as 1.27. (return of 127 dollars for every 100 dollars risked. With 1/2 profit taking profit factor dropped to 1.21 but the equity curve was substantially smoother making possible greater leverage. Anyone who has done serious market modelling will realize the incredible power available from this size PF.


I was particularly impressed because his results were approximately what I had determined with even more rigorous modelling over a decade before.

Nathan has started trading DIBS live 3 weeks ago with a 50K account and is happy that he got in the big Eur/Usd trade that many of us took last Monday. The week started off with an inside hourly bar and after breaking out to the upside it has done nothing but gone higher. I'm still long because the market trend turned up over a week ago and my trail hasn't been hit. (and probably won't for a few weeks)

He asked me to thank the Forex Factory site and all of the other posters, those with positive and negative opinions, because he figured, "where there is smoke there is fire."

Why did he contact me to pass along the "news"?

He got to the point where better money management became necessary for effective trading and wondered if I could point him in the right direction. I did.

After reading the thread numerous times he's declining all the questions that
would be inevitable from his posting especially since the answers would all be
the same ones posted in the thread already.

DIBS is obviously still working for some of us.

The Eur/Usd breakout (chart attached) at the beginning of the week was a fun trade. I bought Eur/Usd at 1.2906, sold .5 of the position at 1.2925 for 19 pips (better than 1:1) and left the stoploss at 1.2890. I'm still long that trade as I write this. Currently Eur/Usd is at 1.3687- meaning 781 pips profit from a 16 pip risk.

Thanks Nathan, for the report on your efforts.

And thanks also to the fine individuals who have written to me with beneficial
input.

Trade on.

PeterCrowns

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  • #7,100
  • Mar 19, 2009 3:39pm Mar 19, 2009 3:39pm
Quoting PeterCrowns
Hello to everyone who has contributed and benefited from this thread. I am very impressed with the size and quality of this major thread on FF.

I've never posted here, but from time to time have checked the progress of this ever burgeoning and vital thread. I can honestly tell you that many excellent and clear explanations given in this thread far exceed what my personal frustration index could have handled.

You who have contributed can be very proud of your accomplishments, especially because of the difficulty for the "average" desirous...
Hi Peter,
What a welcome surprise to see your post, thankyou for taking the time to let us know about nathan,
I continue to trade dibs becasue of there simplicity and the potential for great profit when in the right trade, those dibs taken that aren't right we they just bring us closer to the next runner.
After reading the thread in which you posted back in august last year, i changed the way i looked at trading, you also inadvertently introduced me to Joel, and in that process i have made other contacts here at FF that i wouldn't probaby have made otherwise.
so from me a heart felt thankyou.
cheers
Geoff
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