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The DIBS Method... No Free Lunch continues

  • #8,981
  • Dec 9, 2009 1:56pm Dec 9, 2009 1:56pm
Quoting Razor_trader
Razorman and Razorboy - seems like an elite team of forex crime fighters are here

oh yeah "THE RAZOR GANG"
  • #8,982
  • Dec 9, 2009 5:21pm Dec 9, 2009 5:21pm
Quoting geoffrod
oh yeah "THE RAZOR GANG"

  • #8,983
  • Dec 9, 2009 7:04pm Dec 9, 2009 7:04pm
Now we need 2 other guys name LAZER and BLAZER
  • #8,984
  • Dec 9, 2009 7:23pm Dec 9, 2009 7:23pm
Hello Everyone,

Speaking as a (currently non-profitable) trader my first thoughts would be:

- using a 5 min bar would give more opportunities
- BUT each move would cost more due to the increased cost relatively to the spread on the currency pair.

Additionally monitoring the markets would cost me more (time wise) which would lead me to expect a larger profit...

The best approximation to answering this trade-off that I know of (bar actually trading it) is to back-test it.

I would like to thank everyone on this thread for all the insight that I they have brought - Bring It On!

Best Wishes in your Trading Everyone!

Regards,
Timek
  • #8,985
  • Dec 10, 2009 1:29am Dec 10, 2009 1:29am
Quoting Timek
Hello Everyone,

Speaking as a (currently non-profitable) trader my first thoughts would be:

- using a 5 min bar would give more opportunities
- BUT each move would cost more due to the increased cost relatively to the spread on the currency pair.

Additionally monitoring the markets would cost me more (time wise) which would lead me to expect a larger profit...

The best approximation to answering this trade-off that I know of (bar actually trading it) is to back-test it.

I would like to thank everyone on this thread for all the insight...
5 minute would work BUT only if you are picky and olny take trades once a market is trending, wait for a break out and play a continuation, rather than taking all the IB's in a choppy range.
  • #8,986
  • Dec 10, 2009 2:45am Dec 10, 2009 2:45am
Quoting Razorman
Has anyone tested this method on a 5 min chart ?
Others have done well to answer it but I will take you back to some basics, then confuse you with some other stuff that will have you taking some ownership should you choose to trial it.

You could play this situation on the 5 min chart and there are some pros and cons (the back and forth). While you may have yourself some more opportunities the one thing that has been discussed over and over x 10^Inf is filters. You would have to be the master of your emotions to trade IBs on an hourly and take the hits as they come, I couldnt now imagine that on a 5 min chart. That is a con, the constant beating which will happen, filter or no filter. You would also be looking only at an hourly chart for possible direction, which in itself is still covered with some noise.

SO you have a larger number of bars that you would trade, you would take direction of the hourly bar/trend which could be in conflict with the daily (slight pullback or something else) and your SL would be in alot of cases just a stones throw away. The above recipe is IMO dangerous to the mind. It would also require you to be at your screen for more that 12 times longer (12x5 = 1 hour) than a regular DIB'er and more than 1000 times longer than myself who 95% of the time trades daily candles. Thats alot of emotional baggage.

The pay off though is this. You risk is so small, tiny compared to hourlys in some cases and miniture compared to my dailys which allows for a small position, say .5%, that catches a wave and can multiply well beyond the normal.

I would say you are better off to stick to the hourlys as a minimum. You will get better setups and you can take them off the daily and weekly candles for filtration (if you want to call it that) purposes. You will still get a lot of beatings here and there but you will also get enough setups where at even 1% risk you can add enough to your account to keep you sane, plus there isnt as much screen time. I love risk/reward payouts but lower than 1 hour and I think its more stress than good.

Razor
  • #8,987
  • Dec 10, 2009 3:30am Dec 10, 2009 3:30am
Quoting Razor_trader
Others have done well to answer it but I will take you back to some basics, then confuse you with some other stuff that will have you taking some ownership should you choose to trial it.

You could play this situation on the 5 min chart and there are some pros and cons (the back and forth). While you may have yourself some more opportunities the one thing that has been discussed over and over x 10^Inf is filters. You would have to be the master of your emotions to trade IBs on an hourly and take the hits as they come, I couldnt now imagine that...


i would have to agree, i couldn't imagine how hard it would be to stay on top of everything on a 5min timeframe, 4hr can get bad enough at times.

on a 5 min timeframe you couldn't trade too many pairs, surely.

cheers
geoff
  • #8,988
  • Dec 10, 2009 6:02am Dec 10, 2009 6:02am
have fun backtesting 5 minute bars.........remember to segment results by market times.......

Quoting Timek
Hello Everyone,

Speaking as a (currently non-profitable) trader my first thoughts would be:

- using a 5 min bar would give more opportunities
- BUT each move would cost more due to the increased cost relatively to the spread on the currency pair.

Additionally monitoring the markets would cost me more (time wise) which would lead me to expect a larger profit...

The best approximation to answering this trade-off that I know of (bar actually trading it) is to back-test it.

I would like to thank everyone on this thread for all the insight...
  • #8,989
  • Dec 10, 2009 6:10am Dec 10, 2009 6:10am
If I had to choose between playing 1 hour dibs and 5 min dibs, I might actually take the 5 minute dibs - simply because on the 1 hour dibs, I found myself missing too many follow on trades after my initial entry. On the 5 minute chart, you have a better chance of being in front of your screen for the entire "move" (from your initial entry for a position to the time your trailing stop gets hit) - This was the reason I moved to the daily candle for dibs as the chance of missing an entry or add on position is pretty slim

Have actually moved into a prop trading environment - with equities - may try dibs on smaller time frame - in conjunction with Level II quotes........

Quoting Razor_trader
Others have done well to answer it but I will take you back to some basics, then confuse you with some other stuff that will have you taking some ownership should you choose to trial it.

You could play this situation on the 5 min chart and there are some pros and cons (the back and forth). While you may have yourself some more opportunities the one thing that has been discussed over and over x 10^Inf is filters. You would have to be the master of your emotions to trade IBs on an hourly and take the hits as they come, I couldnt now imagine that...
  • #8,990
  • Dec 11, 2009 4:12pm Dec 11, 2009 4:12pm
Quoting Razorman
Has anyone tested this method on a 5 min chart ?
Buying break-outs from consolidations in a trend is a common tactic in trading. I would say that it is the single best way to trade regardless of time frame. As long as the trend is strong the actual entry method is not that important. What really determines whether you are profitable is how you manage the trades.

You need to ensure that there is a strong trend prior to the IB. I haven't tried this but using something like ADX over 25 as a filter might work. Then look for IBs and take them if they break in the direction of the trend. You are gauranteed to have some losses doing this because when a move ends and starts to consolidate you frequently get IBs formed and it will take some time for ADX to drop and register the loss of momentum.

If you look at periods likes todays 150 pip drop on Euro there were 4 5 min inside bars that would have worked. Then again any short entry in a 150 pip drop is going to make money.

Here's a chart from earlier in the week
Attached Image (click to enlarge)
Click to Enlarge Name: adx1.png Size: 52 KB
  • #8,991
  • Dec 17, 2009 7:12pm Dec 17, 2009 7:12pm
Just bumping...nothing more to do...BUT


HAS anyone caught the IB at 12/07 Frankfurt/london opening.... I'm seeing it jut on visual... 20 pips SL, a hit-and-run breakout. Until now about 540 pips banked (sorry if the numbers aren't exact... cabernet sauvignon's fault )

RR= 27:1

Yes, my friends.... DIBS works.

Cheers!


PS: Damn... I didn't took it...
Attached Image
Many share my views with me. But I don't share them with them...
  • #8,992
  • Dec 18, 2009 1:01am Dec 18, 2009 1:01am
i take it you mean the euro/usd, nice,
but it does need consistency with the trader to trade it,


my 4hr dibs got me in a day later, still going though my ib was double the size of the 1 hr, but it is still going
nearly at 10:1


Quoting HouseTrader
Just bumping...nothing more to do...BUT


HAS anyone caught the IB at 12/07 Frankfurt/london opening.... I'm seeing it jut on visual... 20 pips SL, a hit-and-run breakout. Until now about 540 pips banked (sorry if the numbers aren't exact... cabernet sauvignon's fault )

RR= 27:1

Yes, my friends.... DIBS works.

Cheers!


PS: Damn... I didn't took it...
  • #8,993
  • Dec 18, 2009 3:10am Dec 18, 2009 3:10am
There is currently IBs (4 hourly) on the EUR and AUD US crosses. I like these down due to the strength however its Friday so I would take some profits and move to BE if she lingered for too long.

Razor
  • #8,994
  • Dec 18, 2009 3:25am Dec 18, 2009 3:25am
i have too pending orders on e/u and g/u. for g/u i have cancelled my order because of the coming news but will active after spread will become normal on oanda. already +1 trade on e/u today! but thees will be the only setups for today, yesterday i was up 5% on my account but overtraded and in the end -5% (so shit'y feeling).

P>S i trade 30 min dibs
Attached Images
  • #8,995
  • Dec 18, 2009 5:11am Dec 18, 2009 5:11am
Both ended loses!
  • #8,996
  • Dec 18, 2009 8:20am Dec 18, 2009 8:20am
Quoting geoffrod
i take it you mean the euro/usd, nice,
but it does need consistency with the trader to trade it,


my 4hr dibs got me in a day later, still going though my ib was double the size of the 1 hr, but it is still going
nearly at 10:1
ouch!!! yeah I meant the E/U..... cabernet sauvignon can decrease my typing skills.... scientifically proven!

Great trade!

Cheers!
Many share my views with me. But I don't share them with them...
  • #8,997
  • Dec 18, 2009 8:28am Dec 18, 2009 8:28am
Quoting HouseTrader
Just bumping...nothing more to do...BUT


HAS anyone caught the IB at 12/07 Frankfurt/london opening.... I'm seeing it jut on visual... 20 pips SL, a hit-and-run breakout. Until now about 540 pips banked (sorry if the numbers aren't exact... cabernet sauvignon's fault )

RR= 27:1

Yes, my friends.... DIBS works.

Cheers!


PS: Damn... I didn't took it...
I hate to quote myself..... but today I'm a little more sober..

What I meant is: to all the people that still is doubting on DIBS, saying that it's a light positive, light negative, or a breakeven system...

If you were at B/e on your acc till december, and took the trade I mentioned with a 2% risk, you'd be now with your account at > 50% return. Exit the trade now and don't trade for the rest of the year. You are waaaaay ahead of the majority of the traders.

but, as geoffrod mentioned.... consistency on the system is the key...

Cheers!
Many share my views with me. But I don't share them with them...
  • #8,998
  • Dec 18, 2009 8:44am Dec 18, 2009 8:44am
what if u took 10 trades before and lost 20%?
this example doesnt proof a strategy, but i know what u mean.

i personally wouldnt concentrate too much on a few trades, regardless if they where profits or losses.
  • #8,999
  • Dec 18, 2009 8:58am Dec 18, 2009 8:58am
Quoting RussiaTrader
what if u took 10 trades before and lost 20%?
this example doesnt proof a strategy, but i know what u mean.

i personally wouldnt concentrate too much on a few trades, regardless if they where profits or losses.
Then you'd still be up about 23% of your INITIAL balance. It's still above the average trader IMO, and above any traditional investment (bonds, etc..)

Remember PC's posts.... he's interested on the long tails with DIBS... and that's what the example is for...

Cheers!
Many share my views with me. But I don't share them with them...
  • #9,000
  • Dec 18, 2009 9:29am Dec 18, 2009 9:29am
Quoting RussiaTrader
what if u took 10 trades before and lost 20%?
this example doesnt proof a strategy, but i know what u mean.

i personally wouldnt concentrate too much on a few trades, regardless if they where profits or losses.
The problem is, and i have stated this around before, is that people are thinking way to big over the longevity of there trading year, decade and life.

People come here and expect the 100:1 payoff to happen immediatly. Its not the case and for those who expect to make 100% ROI in a year, I suggest you go and join one of the '0' star, 100 or less posts threads that promise 99% wins and 100% ROI month in month out. What you will find there is disappointment.

IBs as a concept with the basis of long tails aims to produce that .5% winner that makes your account. Its not an easy thing but you need to look at trading as more than just this trade. You need to look at the scope of years doing the same thing. If you loose small amounts here and there, take a small amount of winners and then have a couple of great trades that helps you achieve 20% or so ROI then hey thats frickin great. But very few are prepared to do that because the lure of making 100% ROI every month is so much more appealing.

IT ISNT SUSTAINABLE and anyone who has done any amount of serious backtesting will attest to this. Trading is not about doubling you money in the shortest period of time, thats gambling and the casinos love you for that mindset. Real trading is hardcore grinding discipline and making gains out of oppportunities. I have been trading IBs since the start of this year, although not asmuch recently (because I dont trade hourly charts so my IBs are usually less frequent) but back at the start of the year I was part of a string of 8 loosers that put me at a grand total 7% drawdown which was wiped out a by a few longer string winners that got me in the black and then some.

Worrying about the loosing side will get you emotional, you will be thinking 'gee now I need to get X pips to get me back'. It will lead you to further frustration which is why we absorb the loss and then move on, which is no different from the winners (although theres a little high 5 to yourself).

Aim for a pathetic 10% per year, which less than 1% per month. By doing so year in and year out you will find yourself more comfortable managing larger dollars which in turn gives you a sustainable future. You will find also that you will have great years and not so great, but the not so great are still managable. Trading for too much will have you biting nails which will lead you to bust and wondering.

Razor
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