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The DIBS Method... No Free Lunch continues

  • #8,661
  • Sep 14, 2009 7:50am Sep 14, 2009 7:50am
Hi to all!!!!!

My today's two trades with GBP and JPY... I let it run now with B/E...

I trade without half profit take. I move STOP to B/E when the price moves form breakout point so large as was IB... (Sorry for english).

These trades I will hold on with 80 and 90 SMA's (may be some days).

P.S. I trade with live account!!!
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  • #8,662
  • Sep 14, 2009 8:06am Sep 14, 2009 8:06am
Quoting dim4ik42
Hi to all!!!!!

My today's two trades with GBP and JPY... I let it run now with B/E...

I trade without half profit take. I move STOP to B/E when the price moves form breakout point so large as was IB... (Sorry for english).

These trades I will hold on with 80 and 90 SMA's (may be some days).

P.S. I trade with live account!!!
Nice work dim4ik42,

I saw the UJ trade but passed on it. A very valid DIBS trade but it didn't meet some of the conditions that i look for prior to placing a trade.

USD/CAD gave a beautiful DIBS that i took and have turned into a free trade.

Z
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  • #8,663
  • Sep 14, 2009 8:10am Sep 14, 2009 8:10am
Sorry, i forgot to attach the CAD trade. Here it is.

Z
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  • #8,664
  • Sep 14, 2009 8:25am Sep 14, 2009 8:25am
Quoting zuret9
Sorry, i forgot to attach the CAD trade. Here it is.

Z
As I can see there were 2 losses on CAD before this IB which is now profitable. (Up and then down at the first IB)...

And by the way. As I can see you makes your decisions based on higher time frame or more big trend (may be trend on higher time frame). I did think about this style too. But still trade only with current trade day's trend (as Peter did tell us). I did find that with his (Peters) style you can enter the trade at the very beginning of the trend... Sometimes even you enter buy inside down trend, and find yourself in beginning of new up trend... This is like predicting of trends
  • #8,665
  • Sep 14, 2009 8:52am Sep 14, 2009 8:52am
Quoting dim4ik42
As I can see there were 2 losses on CAD before this IB which is now profitable. (Up and then down at the first IB)...

And by the way. As I can see you makes your decisions based on higher time frame or more big trend (may be trend on higher time frame). I did think about this style too. But still trade only with current trade day's trend (as Peter did tell us). I did find that with his (Peters) style you can enter the trade at the very beginning of the trend... Sometimes even you enter buy inside down trend, and find yourself in beginning of...
Well spotted d, i passed on the first DIBS trade as i was waiting for price to break 1.0850 and pull back before going long. However, had one taken this trade and pulled half off the table at 1:1 the loss would have taken care of itself. I guess this is one of reason PC takes half his position off at 1:1. You always want to pay for the trade as soon as possible.

I use the longer term chart for trend and take DIBS that line up with this trend. Although the CAD trade was counter trend, i knew i wasn't going to hold it for very long. I got out of my last position at .09020 (looking at the charts now, a good thing i did, lol).

Z
  • #8,666
  • Sep 14, 2009 9:01am Sep 14, 2009 9:01am
Well I took the long trade on JPY, turned into a free one but just got stopped out.

Also took CHF long, got stopped out, and now I'm in it short. It just turned into a free trade as well.

We shall see!

Edit: looks like CHF is testing a level of support, if it breaks it looks like it has a lot of room to run.
  • #8,667
  • Sep 14, 2009 9:24am Sep 14, 2009 9:24am
Quoting DarkDays
Well I took the long trade on JPY, turned into a free one but just got stopped out.

Also took CHF long, got stopped out, and now I'm in it short. It just turned into a free trade as well.

We shall see!

Edit: looks like CHF is testing a level of support, if it breaks it looks like it has a lot of room to run.
CHF is a funny one (although am not laughing). When i looked at the daily chart, i see us running down after breaking the nice range we had.
On the H4 chart, i see a series of IB that failed. I drill down to the H1 chart and see a long DIBS which i do not touch. I'll wait for a short DIBS (if one presents itself and reconsider).

Z
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  • #8,668
  • Sep 14, 2009 9:28am Sep 14, 2009 9:28am
Keep forgetting to post the H1 chart. Here it is.

I see no short DIBS!!!

Z
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  • #8,669
  • Sep 14, 2009 9:45am Sep 14, 2009 9:45am
The third arrow on the last chart. I took it long, got stopped out, and then took it on the break south. It's now a free trade south.
  • #8,670
  • Sep 14, 2009 9:48am Sep 14, 2009 9:48am
Quoting DarkDays
The third arrow on the last chart. I took it long, got stopped out, and then took it on the break south. It's now a free trade south.
  • #8,671
  • Sep 14, 2009 10:05am Sep 14, 2009 10:05am
Hah, well I hope it works out . Looks like it is trying to reach lower lows.

Quoting zuret9
  • #8,672
  • Edited 4:21pm Sep 14, 2009 4:10pm | Edited 4:21pm
Quoting james996
Well all I like to state is the fact that I've been trading IB's on the hour charts on the major pairs for the last six years and have experienced nothing but positive growth in my account. The hardest part of trading is sticking with something long enough to experience a positive outcome. I'm not trying to convince anyone this is the holy grail but it does represent the bulk/core of my trading and has provided my family and myself a really good standard of living. I encourage all to do a backtest of five years or more and than decide the merits...

Hi, James!

I am glad that someone else is using so simple (and as we can see profitable) trading methodology. I understand that this is your technic, and probably (as I can see) you would not want to share it with us.
But, if you are already succesfull trader, you may forget, how not simple but very tough it was to reach such place in world of profitably trading.
You can see here a lot of people, who want to learn how to trade profitably and consistently. If you did hint us about Inside bars profitably trading (with your methodology), and did encourage us to do backtest of such system, so please, hint us then your view about 1hr inside bars. Do you trade them like DIBS, with up-and-down day filter? Or you define the trend in another manner? How you define take profit level? May be you trade IBs with the long term trend (on higher time frame) and do not sell IB's breakout in down day if the long term trend is up? Do you trade during periods like last 3 months on EUR/USD (06.2009-08.2009) when we have no trend? Or? May be you are trading IBs with Tunnel concept (169 and 144 MAs), or Alligator of Williams?

I say this, because you tell us to do backtest, and personally I do not know with what kind of rules have I do it.... I t can be profitable for you (with your rules), and have big losses for me....

Anyway - I am sorry if I have offended you. I just want to ask you.
It is just forex forum, where people want to know something new, and share their thoughts...
  • #8,673
  • Sep 15, 2009 2:53pm Sep 15, 2009 2:53pm
From 1st June thru to 11 Sept I have 43 potential DIBs entries.

During this time the Euro has been going roughly sideways and every one of the 43 would have been stopped out eventually.

The first chart shows how far each trade went (maximum positive excursion) before being stopped. The second is the distribution of returns. For example the second bar (marked 25) shows 14 trades went 0-25 pips before being stopped. The median is in the range 25-30 pips.

Interestingly both of the largest trades were shorts taken above the 20 ma. I've marked the entries and approximate entry price on the daily chart.
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  • #8,674
  • Sep 15, 2009 4:01pm Sep 15, 2009 4:01pm
So what are you concluding from this? Thanks for doing the legwork!

Quoting jzw
From 1st June thru to 11 Sept I have 43 potential DIBs entries.

During this time the Euro has been going roughly sideways and every one of the 43 would have been stopped out eventually.

The first chart shows how far each trade went (maximum positive excursion) before being stopped. The second is the distribution of returns. For example the second bar (marked 25) shows 14 trades went 0-25 pips before being stopped. The median is in the range 25-30 pips.

Interestingly both of the largest trades were shorts taken above the 20 ma. I've marked...
  • #8,675
  • Sep 15, 2009 5:18pm Sep 15, 2009 5:18pm
hi all

I have started using the DIBS method and Im looking at 5 pairs -
gbp/usd
gbp/yen
usd/chf
usd/jpy
eur/usd

there was an inside bar on both the gbp/yen and usd/chf - but after i closed half the position at 1:1 the other just closed me out - can anyone offer me any help on how thy manage it and also which trades they took today...thanks



thanks

http://cdn.forexfactory.com/images/misc/progress.gif

  • #8,676
  • Sep 16, 2009 8:01am Sep 16, 2009 8:01am
Hi Gonnamakeit,
Welcome to DIBS trading is all I can say! I dont have years of experience in this as have been trading this method about 6 months...... but I have got this system working for me by accepting mostly losses but making more on the winners which if you read PC's posts he talks about alot as do other traders on here like Razor and EliteJets. I read alot about about trading psychology and developing a 'probablistic mindset' (try Trading in the Zone if you haven't read it) which helped me hugely with this method. I have developed the system for me to work with my appetite for risk........I take some profit then let the rest run using trailing SMA's on increasing periods........I do take all trades mechanically as I found missing one was usually the best one and too painful but I use a system to weight the trades based on a number of factors (Time of day,Size of risk, 'space' for trade)......
hope this helps a little
Best,
J
  • #8,677
  • Sep 16, 2009 8:05am Sep 16, 2009 8:05am
That is excellent work jzw and very helpful......thank you!
Best,
J

Quoting jzw
From 1st June thru to 11 Sept I have 43 potential DIBs entries.

During this time the Euro has been going roughly sideways and every one of the 43 would have been stopped out eventually.

The first chart shows how far each trade went (maximum positive excursion) before being stopped. The second is the distribution of returns. For example the second bar (marked 25) shows 14 trades went 0-25 pips before being stopped. The median is in the range 25-30 pips.

Interestingly both of the largest trades were shorts taken above the 20 ma. I've marked...
  • #8,678
  • Sep 16, 2009 9:02am Sep 16, 2009 9:02am
Quoting gonnamakeit
hi all

I have started using the DIBS method and Im looking at 5 pairs -
gbp/usd
gbp/yen
usd/chf
usd/jpy
eur/usd

there was an inside bar on both the gbp/yen and usd/chf - but after i closed half the position at 1:1 the other just closed me out - can anyone offer me any help on how thy manage it and also which trades they took today...thanks



thanks

http://cdn.forexfactory.com/images/misc/progress.gif

The hardest part and I do mean the hardest part is accepting the losses (or free trades if you swing that way). The second hardest part is allowing your profits to mature to a point well in excess of both X return and X time.

X return will denote a higher than average Risk/Reward in which a trade will give you returns that exceed previous losses and gives your account a nice nudge

X time is a time well beyond a standard trade. Most trades are exitted on reverse signals or when a set profit is hit. Imagine YEARS and you will have a relevant time factor for high growth

Now why are these 2 things going to be tough. Well here it is in a nutshell. No body likes to loose and worse still nobody likes to give up positive pips, that is good pips, when a situation arises that knockes out a position that you may have held for a good period of time. It is essential to move past these because they will happen time and time again, however by being part of the opporutunity flow you will give yourself a chance to catch the wave that runs for longer that a standard period (think YEARS).

If you look back on history (and this helps me to focus at times) you will see, you can count, numerous IBS (along with other PA setups) that would still be in play years after they were taken. You can identify there initial risks, there trade direction and from there you can work out what a return may have been on that trade. Try to put yourself in that focus when looking for current trades because the next trade you take may stay in play for 1,2 or 5 years and the returns on that one trade may just be the trade that makes your decade.

Joel mentioned in a reply to a member (zach I think his name was) that his testing stopped at 10x risk, however the game can go much beyond that and 10x R/R is really achievable but shouldnt be a target.

If you are able to accept a trade for what it is, an oppurtunity, and be happy with the outcome once you reach a certain point, then hopefully you can learn to forget that trade and move to the next.

As for the 5 pairs you have listed. They are a great starting mix and in time you will identify strengths and weakness for each at given times and from there you may add or substract more. Trusting in your plan (yes you need to write a detailed plan and trade that plan no questions asked) will allow you to make the decisions based on what you are seeing.

Hope this helps mate

Razor
  • #8,679
  • Sep 16, 2009 2:26pm Sep 16, 2009 2:26pm
I'm sure its been said before but before trading a system you must make sure you understand its "edge" and how to make it work.

What I mean is, apparently, the raw DIBs concept has an edge of around 1.21 (per "Nathan's" testing). In that post (by PC) note that this is on average, over time - not every week, month or even year. Basically, it's a method where the few big hitters pay for the many losers. This means that you really need to understand the minimum R:R you can bank at to make the system net profitable over time - otherwise you could bleed a slow death by taking profit too quickly. (Or by missing a 100:1 trade by being on holiday)

Also bear in mind that this raw concept may only be part of the strategy. Joel hinted a while ago that not all the cat was out of the bag. Indeed, this would be typical (from what I know) of his published methods - a raw concept which gives a 1.2-1.4 PF (on average, over time) but which can be improved by a filter (sometimes provided at a paid seminar).

Whatever the case may be, no one should be trading this method unless they have run a thorough backtest and not only proved that it works but also proved that they could trade it on a financial and psychological level.

Whether you understood what I said or not - thanks for listening.

PS - As far as my trading psychology is concerned, there are other freely available methods out there which suit me far better - that may also be the case for other people
  • #8,680
  • Sep 16, 2009 2:50pm Sep 16, 2009 2:50pm
Here are the results for GBP from 1/6 to 11/9. 46 trades in total.

Compared to the Euro trades it has been much harder over this period to make money on GBP because a large number of trades only ran a few pips into profit (<50) and you needed to capture most of the few big winners to offset all the losers. The largest win was a long on 30th July @ 163.90 and went approx 650 pips.

If you traded with a fixed profit target of less than 150 pips you would have lost money. Targets around 200 pips made a small amount of money but much higher was again money losing.
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