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The DIBS Method... No Free Lunch continues

  • #8,561
  • Aug 24, 2009 5:05pm Aug 24, 2009 5:05pm
Quoting gez40
what a difference 30 mins can make
Maybe the overhead resistance to your left could have been your target....but then hindsight is a wonderful thing
every Saint has a past. Every Sinner has a Future
  • #8,562
  • Aug 25, 2009 2:21am Aug 25, 2009 2:21am
Quoting turnip15
Maybe the overhead resistance to your left could have been your target....but then hindsight is a wonderful thing

Spot on, to be honest though i did`nt even notice that, i must learn to look left
Seek not to change the world; seek only to change your mind about the world
  • #8,563
  • Aug 25, 2009 3:33am Aug 25, 2009 3:33am
Quoting jzw
I've been back testing DIBS using the limited intra-day data that I have. These results are using the Euro futures contract (6E) for the last 3 months - from 1/6 to 21/8.

Its a bit better than the results for the whole year but still representative.

Conclusions
- DIBS has a solid edge
- Getting the most from DIBS requires letting your winners run
- Conversely taking partial profits at <50 pips is counter productive

Besides the normal DIB entry rules I added the following simple (ie not optimised) rule for taking profits and moving stops.
- take...

Hi, JZW!!!

Your research is very interesting. If I did right understand - you did take profit everytime when it was more than 100 pips and currently bar was closing. So how much pips after 100 pips it was for this moment - how much you did take... (sorry, - my english is bad).

In case with your rules trading was profitable for long run. (Not very long, but more than 1 month). What I want to ask you - how do you think, will the trading be more profitable or less profitable if you will take profit not in this manner, but with looking at more higher time frame... for exemple at 4hr time frame. So we let the trade run - and when we see reversal not at 1hr time frame, but at 4hr - then wee take our profit. i understand that a lot of trades will and for nothing (zero) after +50-200 pips profit already, but some trades will can give us more than 500-700 pips...

So what do you think about it?

I made some little research, and it looks for me promising too...

And, JZW, tell me please another thing. During your research did you trade 2
lots (contracts), or one? I mean did you let run half of your position size, or did you let run whole position size whithout taking half profit at 1:1?

Were there some situation, when price did hit your BE, stoped you, and made then a nice big move in your favor, but without you already?

Thank you!
  • #8,564
  • Edited 7:01am Aug 25, 2009 6:45am | Edited 7:01am
Two long entries today -- AUD/USD and EUR/USD (both seemed
like the "hot hand," as Peter Crowns once put it).

The EUR/USD is up from 1.4270 to about 1.4330 and is hovering
there (as of 2041 Tokyo time). The AUD long went out at +1 profit
(after I adjusted my stop, there was some retracement). This is my
first thorough attempt at using DIBS and I must say it's promising.

...UPDATE: Closed at 1.4331. Total UPL for the day is $96 USD.
HELL IS EMPTY, ALL THE DEVILS ARE HERE. -- Shakespeare
  • #8,565
  • Aug 25, 2009 5:29pm Aug 25, 2009 5:29pm
Hi dim4ik42
yes the rules for taking profits was any close over 100 pips in profit. You can look at the list of trades to see how far some of them were above that. There is nothing really special about 100 pips, although its approximately 0.5 ATR. The point of having a simple rule was just to demonstrate that DIBS works. How well it works for you depends on how much profit you extract from the winning trades, because the rules for handling losing trades are fixed.

If you look at the Euro over this time period (June-August) you'll see that it is in a range and trying for 200+ pip moves is challenging when the market is going nowhere.

Always taking profits at 1:1 is a mistake. In my testing around 45% of trades made it to the 1:1 level. That means that taking profits at 1:1 doesn't cover the risk you took on that part of your position i.e. if you look at the total you made on your first lot it would be negative. If you hold for longer say 1.5 or 2 then it starts to make sense. I didn't do this in my testing because I wasn't trying to optimise my results, but just to figure out if it was profitable.

Finally - in my small amount of sample data there were no cases where the break-even stop was hit and then the market reversed for a big win and most of the time when the break-even stop was hit the market eventually crossed the inside bar. That suggests that if your DIBS is stopped at break-even you could probably consider reversing.

Maybe someone will invent a DIBS failure strategy to go with DIBS.
Attached Image
  • #8,566
  • Aug 25, 2009 5:42pm Aug 25, 2009 5:42pm
Blunderbuss
congrats on pips but on my data the inside bar at 12 GMT was below the day open price and could only have triggered a short entry.
  • #8,567
  • Aug 25, 2009 7:29pm Aug 25, 2009 7:29pm
Quoting jzw
I've been back testing DIBS using the limited intra-day data that I have. These results are using the Euro futures contract (6E) for the last 3 months - from 1/6 to 21/8.

Its a bit better than the results for the whole year but still representative.

Conclusions
- DIBS has a solid edge
- Getting the most from DIBS requires letting your winners run
- Conversely taking partial profits at <50 pips is counter productive
Good work jzw. One other thing i look at is the previous days high/low.

Z
  • #8,568
  • Aug 26, 2009 3:06am Aug 26, 2009 3:06am
Quoting jzw
I've been back testing DIBS using the limited intra-day data that I have. These results are using the Euro futures contract (6E) for the last 3 months - from 1/6 to 21/8.
....
Thanks for sharing.
Do post if u have other backtest results in the future.
  • #8,569
  • Aug 26, 2009 4:47am Aug 26, 2009 4:47am
I have a short trade running in profit from some time ago. I look today at the same pair which opens up a "hot hand" opportunity in the opposite direction i.e. long. The long term averages (as per Peter's chart) are down.

Do I

a) go long and scratch the short?

b) ignore the long?

c) enter a mental institution?

I have read the entire thread before people start shouting..."RTFT!"

Just trying to get max pips!
  • #8,570
  • Aug 26, 2009 4:49am Aug 26, 2009 4:49am
Is anyone speaking german who is using The DIBS Method?
  • #8,571
  • Aug 26, 2009 4:51am Aug 26, 2009 4:51am
If it was me I would be telling myself to stick to my rules, and it has happened. I would have a level at which I would close the long term short or a trailing stop so leave it.
If you see a good set up that meets your criteria you should take it. Even if its just a daily retrace it could make you some nice profit.

Quoting 4FXsake
I have a short trade running in profit from some time ago. I look today at the same pair which opens up a "hot hand" opportunity in the opposite direction i.e. long. The long term averages (as per Peter's chart) are down.

Do I

a) go long and scratch the short?

b) ignore the long?

c) enter a mental institution?

I have read the entire thread before people start shouting..."RTFT!"

Just trying to get max pips!
  • #8,572
  • Aug 26, 2009 5:36am Aug 26, 2009 5:36am
Quoting 4FXsake
I have a short trade running in profit from some time ago. I look today at the same pair which opens up a "hot hand" opportunity in the opposite direction i.e. long. The long term averages (as per Peter's chart) are down.

Do I

a) go long and scratch the short?

b) ignore the long?

c) enter a mental institution?

I have read the entire thread before people start shouting..."RTFT!"

Just trying to get max pips!
Trade your plan and if your plan tells you to take profit and switch then do so. I would be looking at the bigger picture and so far it is saying longs are not a good option. We are in no mans land at the moment (between weekly S/R) so I would be holding those shorts until we reach a point where the market may turn. If you get stopped out, welcome to DIBS, it will happen time and time again, but remember the time you cut a trade short it may run. The toughest part is swallowing a few of the above to capture the last part of that sentence.

Razor
  • #8,573
  • Aug 26, 2009 8:45am Aug 26, 2009 8:45am
Quoting 4FXsake
I have a short trade running in profit from some time ago. I look today at the same pair which opens up a "hot hand" opportunity in the opposite direction i.e. long. The long term averages (as per Peter's chart) are down.

Do I

a) go long and scratch the short?

b) ignore the long?

c) enter a mental institution?

I have read the entire thread before people start shouting..."RTFT!"

Just trying to get max pips!
What currency pair are you talking about? This would give a better picture and allow others to see what you are seeing.

Post a chart even if you've made your decision as this will help others that might find themselves in the same situation in future.

Z
  • #8,574
  • Aug 26, 2009 9:18am Aug 26, 2009 9:18am
I missed the first entry today which occured around 10am London for Cable. The risk was great at around 30 pips plus spread and it pretty much dropped from there. I got 2 trades on lower TFs with pullback IB setups and the risks where very small, around 12-15 pips plus spread. On both occasions the market moved past 2x risk. Instead of taking 1/2 off I moved to BE which stopped out the 2nd trade but the first has now moved past 100 pips which on full lots is 7x.

The risk of being stopped out with some smaller IBs is greater, however if traded with a setup in mind, the small risk can be eclipsed nicely. So far this week I have taken 4 mini IBs (mini because they are just so, and they are on lower TFs) that have come about after the market has broken out and pulled back. They have worked best when a pin has set up then an IB follows.

I have had much more limited screen time these past few weeks so I am glad I have managed to catch these moves within moves.

Take care

Razor
  • #8,575
  • Aug 26, 2009 4:22pm Aug 26, 2009 4:22pm
Thanks for replies.

Here's the chart Z9.

Really the chart is inconsequential, it is more the question of what one does in this situation or any situation like this.
Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_02 Aug. 26 22.16.gif Size: 10 KB
  • #8,576
  • Aug 26, 2009 10:48pm Aug 26, 2009 10:48pm
Quoting 4FXsake
Thanks for replies.

Here's the chart Z9.

Really the chart is inconsequential, it is more the question of what one does in this situation or any situation like this.
Hi 4FXsake,

In one of PC's post he mentions using DIBS in the opposite direction as a possible method to exit a trade. If short, a valid long DIBS would be a good point to cash in the profits.

Hope this helps?

Z
  • #8,577
  • Aug 26, 2009 11:50pm Aug 26, 2009 11:50pm
Quoting 4FXsake
I have a short trade running in profit from some time ago.
If some time ago means days, you should be managing this trade on a different time frame by now. A new trade will be managed on the hourly, initially.
Gone to a better place
  • #8,578
  • Aug 27, 2009 12:36am Aug 27, 2009 12:36am
This is the post i was referring to earlier.http://www.forexfactory.com/showpost...&postcount=102

The last paragraph.

Z
  • #8,579
  • Aug 27, 2009 5:24am Aug 27, 2009 5:24am
Thanks again to everyone for helping out.

Great thread, great insight and many thanks to PC and Jarroo!

  • #8,580
  • Aug 27, 2009 5:34am Aug 27, 2009 5:34am
Quoting smikester
If some time ago means days, you should be managing this trade on a different time frame by now. A new trade will be managed on the hourly, initially.
Yes that is true. Using the 20 daily EMA as a buffer zone is one way to manage a trade once you have eclipsed a certain point. The other thing that managing the trade on Dailys does is it gives you more focus on higher S/R zones that could be potential targets.

I like to still watch a trade on a small TF but that is only to add to it if the situation arises, but for Profit Targets and takings the daily chart is the possible the better choice, if only to allow you to walk away for the trade to avoid the pyschological to and fro battle on an hourly.

Good to see some new faces (and old) adding to this thread. It must be a sign that the markets are starting to watch up from there June, July hibernation.

Razor
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