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The DIBS Method... No Free Lunch continues

  • #8,761
  • Oct 5, 2009 12:39am Oct 5, 2009 12:39am
Heloooo? Where are all the DIBS traders gone?

E/U and U/J Frankfurt open H1 bars looking like IBs at this point, 20 minutes till close. I would like to add both E/U and U/J longs, as long term fundamental holds, but will wait and see what London open brings.
  • #8,762
  • Oct 5, 2009 1:03am Oct 5, 2009 1:03am
Well U/J broke out so we are just left with E/U IB.

With London open as green, 2 buy stops at 146426 SL at 146266 TP1 146586 TP2 open.

We are above daily R2 (using 000GMT candle close) and about 20 below the actionforex.com daily R1 at 1.4655. Dodgy place to be long but 16 pips isn't too much to risk.
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  • #8,763
  • Oct 5, 2009 2:12am Oct 5, 2009 2:12am
SL hit!

It's ok, though
  • #8,764
  • Oct 6, 2009 12:20am Oct 6, 2009 12:20am
I would like to ask whether we should take all trades or only take buy trades above the opening price when in an uptrend and take sell trades below the opening price in a downtrend
  • #8,765
  • Oct 6, 2009 1:45am Oct 6, 2009 1:45am
Quoting anskaven
I would like to ask whether we should take all trades or only take buy trades above the opening price when in an uptrend and take sell trades below the opening price in a downtrend
That is up to you. By only taking trades with the trend you may miss a big reversal...BUT you may also miss quite a few fakeouts.
  • #8,766
  • Oct 6, 2009 8:45am Oct 6, 2009 8:45am
Quoting sinner-
Heloooo? Where are all the DIBS traders gone?

E/U and U/J Frankfurt open H1 bars looking like IBs at this point, 20 minutes till close. I would like to add both E/U and U/J longs, as long term fundamental holds, but will wait and see what London open brings.
You only see people around when they have winning trades, but when there losses it gets quite. People dont want to lose, but its part of the business we are in.
I bet yu most people stopped trading it after a couple of losses.
  • #8,767
  • Oct 6, 2009 9:55am Oct 6, 2009 9:55am
Quoting Fxtrader
You only see people around when they have winning trades, but when there losses it gets quite. People dont want to lose, but its part of the business we are in.
I bet you most people stopped trading it after a couple of losses.
OR
they are busy trading, busy with work/business, family, vacation etc.
not many FF members are dedicated enough to post consistently.
  • #8,768
  • Oct 6, 2009 11:05am Oct 6, 2009 11:05am
Hi All,

First post - but I thought I'd drop in to say how great this forum is. I've perused a lot of the posts in this forum, notably the posts by PeterCrowns, Bemac, TheRealThing, and RazorTrader. There's a lot of good sense in here. I've been successfully using IB trading for the last four years and I've seen an average 4x per annum growth on my account - I started out with Ł500 and used a spread bet platform rather than a broker (after initally getting hacked off with requotes), I'm not here to boast but I'll let you do the math! I've done this allied to working for a living, so that restricted me to 4H or higher TF trading.

My rules:

  1. Only a single EMA on the chart, as my exit signal.
  2. I trade IBs at 7am, 11am, 3pm and 7pm. I've found I take on average about 7 trades a week.
  3. I trade the main pairs. A lean spell in one is more than offset by the movements in another.
  4. Free trades at 1:1 reduce the mental stress of trading.
  5. Losing trades are the cost of doing business.
  6. Trading against the trend rarely produces the winners, you are more likely to hit your SL, let the reversal establish first, you won't lose out by exercising caution!
  7. You can lose 2 in 3 trades and still make good money (I lose or break even on 6.46 out of 10 trades), as long as you let the profits run to your exit rules.
  8. Learn to visualise what a chart is telling you: eg. A 4H bullish candle with small tails followed by a 4H bearish candle with small tails is an 8H pin bar.
  9. I trade at 2% initial risk, reducing to 1% after the free trade kicks in. If the IB is a pin, I increase that to 3% and 1.5%.
  10. Learn to understand your emotions - read 'trading in the zone', it is the most useful trading book you'll ever read.
  11. Once you think you've found an edge (such as IBs), work the edge, don't fret about the series of losses when you hit the lean patches (far easier to say than do).

  • #8,769
  • Oct 6, 2009 12:40pm Oct 6, 2009 12:40pm
PinMan,
in behalf of all, Welcome!
(i have not posted here for a long time but..)
it would be great if u can post & share here from time to time.
  • #8,770
  • Oct 7, 2009 3:20am Oct 7, 2009 3:20am
Thanks SupremeChaos!

I will try, but let me also say that it's important, in the best possible way, that you don't try to trade someone else's method or system (for example, fretting if you haven't taken a trade that RazorTrader has in his journal). Look at it this way - we all know that if to use an EMA as an exit signal, and in general this system, will see some winning trades turn to losers or break-even. When I started out a ran a really small EMA to try to minimise my losses. After three months of this with my account only having grown by 12%, I wondered why. So I revisited my trades and realised that I was never letting my winners run. So I re-ran the same trades against an EMA double what I actually used. I would have increased the number of losing or break-even trades by 20%, but by allowing my winners to run, I would have got nearly 50% account growth.

I also back-tested my first three year's trades using a very very high EMA. I'd have made even more than I did, but there is no way I'd have been able to stomach over 85% of the trades not making a profit and relying on those 10x R:R (and better) trades making all the profit, since I would be living in fear of missing a trade which would have clouded my decision-making.

I use a particular EMA, not because it works or doesn't work according to some backtest (because it isn't 'the system' that will cause you to lose money, it is your emotions and ability to place or close the trade) but because I can trade it without emotion clouding my judgment. The other thing is that whatever EMA line you use, it shouldn't affect the number of losses you have, just the number of BE trades. And if using IBs has an edge (which I think we can all conclude it does) then the laws of probability mean that each losing or break-even trade brings you closer to the next winner. As long as you practice strict money management you'll be fine in the lean periods.

The final trick is not to sit there looking at the chart. As I said in my first post I do this as well as working, so that means checking the market before I leave for work and setting up any orders and adjusting stops on open positions, followed by checking again at 11am and 3pm, and then a final check at 7pm. My other job keeps me sufficiently busy that I don't have time to get sweaty-palmed about wherever my position is - and it keeps me from thinking I should always be taking trades.
  • #8,771
  • Oct 7, 2009 3:26am Oct 7, 2009 3:26am
Hi PinMan, also welcome, love your style.
  • #8,772
  • Oct 7, 2009 5:47am Oct 7, 2009 5:47am
I have been trading the DIBS for about 3 weeks and I am up just a little more than break even. I make dumb mistakes, like placing the trade the wrong way but like Pin Man I'm not letting them run. I also need to make better use of the OCO triggers provided by thinkorswim. I will also take a look at the EMA and see what that looks like for me.

I seem to be taking about 4-5 trades a day, which may be too many.

My intent is to trade with three mini-lots until my method improves and I have a better recognition of what the charts tell me.

Personally, I think that actively trading for 3 weeks and breaking even is a real sign of encouragement.
  • #8,773
  • Oct 7, 2009 6:56am Oct 7, 2009 6:56am
Quoting MurphyMan
I have been trading the DIBS for about 3 weeks and I am up just a little more than break even. I make dumb mistakes, like placing the trade the wrong way but like Pin Man I'm not letting them run. I also need to make better use of the OCO triggers provided by thinkorswim. I will also take a look at the EMA and see what that looks like for me.

I seem to be taking about 4-5 trades a day, which may be too many.

My intent is to trade with three mini-lots until my method improves and I have a better recognition of what the charts tell me.

Personally,...
There were nice DIBS trades on the 17th of Sept on GBPJPY and 24 sept on cable, if yu use multiple contracts you should still be in..i use multiple contracts and take partial profits on two thirds of the position at 1:1 and let the other ones run, staggerring then above swing highs (on hourly chart) for a downtrend and swing lows on an uptrend.

Another DIBS was taken yesterday on cable, already two thirds out and letting the others run, its an add on to a DIBS trade already running from 24 Sept.

But last week i had a couple of losing DIBS trades, but there are all dawrfed by the winning trades running.
  • #8,774
  • Edited 11:13am Oct 7, 2009 10:57am | Edited 11:13am
Hi guys and girls!
I was thinking about following thing:

Oanda is one of the brokers I use. Suppose you are long x lots and reversal valid DIBS comes along. If you take it, your current long position will either reduce in size or reverse completely leaving you net short with small amount (y-x). How do you trade DIBS when your broker doesnŽt accept simultaneously trades in both directions?
Should we care, or will the market take care of this?

Any thoughts on this?

Bluefish
  • #8,775
  • Oct 7, 2009 2:57pm Oct 7, 2009 2:57pm
Quoting bluefish
Hi guys and girls!
I was thinking about following thing:

Oanda is one of the brokers I use. Suppose you are long x lots and reversal valid DIBS comes along. If you take it, your current long position will either reduce in size or reverse completely leaving you net short with small amount (y-x). How do you trade DIBS when your broker doesnŽt accept simultaneously trades in both directions?
Should we care, or will the market take care of this?

Any thoughts on this?

Bluefish
I split my acc by three accs and there is no problem.
No crystal ball. I read the cards.
  • #8,776
  • Oct 8, 2009 12:36am Oct 8, 2009 12:36am
Quoting bluefish
Hi guys and girls!
I was thinking about following thing:

Oanda is one of the brokers I use. Suppose you are long x lots and reversal valid DIBS comes along. If you take it, your current long position will either reduce in size or reverse completely leaving you net short with small amount (y-x). How do you trade DIBS when your broker doesnŽt accept simultaneously trades in both directions?
Should we care, or will the market take care of this?

Any thoughts on this?

Bluefish
If you are LONG and you get a revesal signal that would mean that the trend is over and you would want to exit your LONG and maybe go short.

Opening a separate short position acheives nothing, it just offsets the other position so you don't make money whichever way it goes and you have to pay 2 lots of spread.
  • #8,777
  • Oct 8, 2009 12:44am Oct 8, 2009 12:44am
Quoting foredog
If you are LONG and you get a revesal signal that would mean that the trend is over and you would want to exit your LONG and maybe go short.

Opening a separate short position acheives nothing, it just offsets the other position so you don't make money whichever way it goes and you have to pay 2 lots of spread.
Just to explain what I meant, since it looks like we misunderstood each other.
With Oanda, if you are LONG x amount and you open SHORT in the same currencypair with y amount AND y > x, then you will end with 1 SHORT (y-x) amount.

And one more thing...if youŽd exit on each reversal DIBS, you would almost never make something like 50:1 Reward:Risk ratio.

Bluefish
  • #8,778
  • Oct 8, 2009 1:21am Oct 8, 2009 1:21am
Quoting bluefish
Hi guys and girls!
I was thinking about following thing:

Oanda is one of the brokers I use. Suppose you are long x lots and reversal valid DIBS comes along. If you take it, your current long position will either reduce in size or reverse completely leaving you net short with small amount (y-x). How do you trade DIBS when your broker doesnŽt accept simultaneously trades in both directions?
Should we care, or will the market take care of this?

Any thoughts on this?

Bluefish
You can open separate accounts with Oanda easily.......I use one for my long trades and one for short...........I also use ODL in the UK where you can have both short and long positions open in the same account....dont think you can do this in the US
J
  • #8,779
  • Oct 8, 2009 3:04am Oct 8, 2009 3:04am
Quoting bluefish
Just to explain what I meant, since it looks like we misunderstood each other.
With Oanda, if you are LONG x amount and you open SHORT in the same currencypair with y amount AND y > x, then you will end with 1 SHORT (y-x) amount.

And one more thing...if youŽd exit on each reversal DIBS, you would almost never make something like 50:1 Reward:Risk ratio.

Bluefish
Yes but if you are long 4 and short 5 then you are short 1..that is a fact.

doesn't matter how you word it or if you have two accounts or whatever you still would have a net short position.


say you keep open you're long, and open a short of the same amount then (forget spreads etc). If you make 50 pips on the short, you've still lost 50 on the long. So net P&L 0.
  • #8,780
  • Oct 8, 2009 3:12am Oct 8, 2009 3:12am
Save clogging up the thread with bizzare "hedging things"

here's two links here where they have been extensively discussed.

http://www.trade2win.com/boards/fore...g-purpose.html

http://www.trade2win.com/boards/gene...-question.html
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