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The DIBS Method... No Free Lunch continues

  • #9,021
  • Dec 22, 2009 5:33am Dec 22, 2009 5:33am
Quoting albertsy2
Correct me if I'm wrong, but London opens 1 hour after Frankfurt.
Forex is a 24 hour market. If there is strong sentiment, generally speaking, it doesn't reverse when Frankfurt opens, and London doesn't reverse Frankfurt's. Traders are traders all over the world. Any session starts to wind down towards the end which is why we are likely to get an inside bar towards the end of the Asian session.

Again, if there is strong sentiment and the likelihood of a good move it's going to happen in the London session which is the most important session. We are more likely to get into that move with a small stop loss using dibs early in the day. It's the strong moves we want, but we don't want to join them half way through.

DIBs is a way to get into strong moves. That's why people who don't understand it think it's not effective.
Gone to a better place
  • #9,022
  • Dec 22, 2009 6:48am Dec 22, 2009 6:48am
and that is exactly the reason why 90 percent of traders fail and will continue to fail. Human emotion is exactly the reason why DIBS works.

I've seen it every day at work for the past two weeks - i just started with a prop firm trading equities - people who do not understand basic math and the concept of trend following. They get greedy and close out a trade after it is a few cents in profits for no other reason than "they think" it is all the market will give them. The only thing you can define in this business is your risk. It is the back testing over years of data that removes the emotion from the trader. Speaking from experience, it is no different that having to diagnose a patient with a certain condition after seeing it over and over and over again.

I'm sitting up about 1800 pips right now across two currencies - three positions in each. Yes the trend could reverse and I could end up with a few hundred pips on this trade, but I know from testing that my biggest win is always in front of me......


Quoting RussiaTrader
when u think trading DIBS is ONLY understanding basic math then do your own experience, go ahead!
you will soon realize that there is a human being behind the math.
  • #9,023
  • Dec 22, 2009 10:53am Dec 22, 2009 10:53am
Quoting jarroo
Peter my have given a hint on his chart with the 72 and 90 Simple Moving Averages.
Post #7133. The 72 sma is powerful in catching moves in the trend.
I dream, therefore I become.
  • #9,024
  • Dec 23, 2009 9:10am Dec 23, 2009 9:10am
very interesting thread. nice work! question: im new to the inside bar method, are the IB's always a trend continuation? or a reversal as well? if they are both, they wouldnt be quite useful I guess.... I ask because the first few that i saw as examples were all part of a strong move down, then a consolidation peroid occurs, then the IB, then it resumes down (perfect!) then i came across one that went on a reversal... confused. I guess thats why its important to only enter a stop entry?? thanks
jeff
  • #9,025
  • Dec 23, 2009 3:38pm Dec 23, 2009 3:38pm
I'm a little more conservative in my IB trading and was wondering if there was a version of this indicator that looks for the breakout of the OUTSIDE bar's high/low after the inside bar is finished forming?
  • #9,026
  • Dec 24, 2009 7:20am Dec 24, 2009 7:20am
how in the world is this "more conservative"

Quoting madmartigan
I'm a little more conservative in my IB trading and was wondering if there was a version of this indicator that looks for the breakout of the OUTSIDE bar's high/low after the inside bar is finished forming?
  • #9,027
  • Dec 24, 2009 12:20pm Dec 24, 2009 12:20pm
Quote
I'm sitting up about 1800 pips right now across two currencies - three positions in each. Yes the trend could reverse and I could end up with a few hundred pips on this trade, but I know from testing that my biggest win is always in front of me......

Right there with you Razor.

Well guys it's time to take off and celebrate the holiday. Hope everyone had a great year. I sure did!!! Once the auditor has finished closing the books for me, I will post 2009 results!!! Everything else is just talk.. It was very nice getting a chance to meet with some of you and talking about this about this business of ours. I wish everyone a great Christmas and a wonderful New Year-may you all achieve you dreams....
  • #9,028
  • Dec 25, 2009 12:36pm Dec 25, 2009 12:36pm
I am looking forward to trading this in 2010.
  • #9,029
  • Dec 27, 2009 5:46am Dec 27, 2009 5:46am
The above systems have all been mentioned on this forum. FSP and ONS are systems that can be found traded on Joel Rensink's blog (though the blog has not been updated since the systems has gone into drawdown). London Squeeze is a system that Joel teaches on a workshop for which he charges 1000 USD per person.

My questions are:

(A) Has anyone who has attended the London Squeeze workshop been able to replicate the performance Joel advertizes by their own backtesting on TradeStation?

(B) Has anyone backtested FSP or ONS on the currency pairs Joel trades on his website?

Joel mentions himself that what separates a real trader from an amateur is that they validate for themselves the methods that they use... so has anyone actually backtested the above systems? What have been your results?
  • #9,030
  • Dec 27, 2009 5:47pm Dec 27, 2009 5:47pm
i play FSP and DIBs

I have backtested DIBS enough to be comfortable with it. As far as FSP goes, I am simply forward testing it, but based on the concept of cutting your losses short and letting your winners run, I am comfortable testing it with real cash.

The difference between the two system is in the take profit method - one is time based, the other is priced based. With DIBS, you may have fewer trades, but you build bigger positions. In the long run they both work at generating profits. Sometimes the time based method pulls in a bigger win, sometimes the price based stop does. Either way, the goal remains the same.

I would drop the grand in second, if just for the help i've gotten in setting my head right...........

Quoting patrickon
The above systems have all been mentioned on this forum. FSP and ONS are systems that can be found traded on Joel Rensink's blog (though the blog has not been updated since the systems has gone into drawdown). London Squeeze is a system that Joel teaches on a workshop for which he charges 1000 USD per person.

My questions are:

(A) Has anyone who has attended the London Squeeze workshop been able to replicate the performance Joel advertizes by their own backtesting on TradeStation?

(B) Has anyone backtested FSP or ONS on the currency pairs...
  • #9,031
  • Jan 2, 2010 12:45pm Jan 2, 2010 12:45pm
I backtested FSP and ONS on all the pairs. I dont think I would be able to trade it as DD was often over 50% of the account just by risking 1% per entry/per pair.
However results were positive between 20-30% pa over 5 years for FSP and 10-15% for ONS. The reason why Joel has such a big gains could be due to silver position that he stared to accumulate at the beginning of the year and better MM.
I backtested DIBS over 1000 trades, but I have failed.


Quoting patrickon
The above systems have all been mentioned on this forum. FSP and ONS are systems that can be found traded on Joel Rensink's blog (though the blog has not been updated since the systems has gone into drawdown). London Squeeze is a system that Joel teaches on a workshop for which he charges 1000 USD per person.

My questions are:

(A) Has anyone who has attended the London Squeeze workshop been able to replicate the performance Joel advertizes by their own backtesting on TradeStation?

(B) Has anyone backtested FSP or ONS on the currency pairs...
  • #9,032
  • Jan 2, 2010 5:09pm Jan 2, 2010 5:09pm
Quoting alter
I backtested FSP and ONS on all the pairs. I dont think I would be able to trade it as DD was often over 50% of the account just by risking 1% per entry/per pair.
However results were positive between 20-30% pa over 5 years for FSP and 10-15% for ONS. The reason why Joel has such a big gains could be due to silver position that he stared to accumulate at the beginning of the year and better MM.
I backtested DIBS over 1000 trades, but I have failed.
That is interesting alter;

I was of the impression that ONS probably had better stats than FSP. What was your finding on them individually? What sort of allowances had you made for slippage and commissions?

Thanks.
  • #9,033
  • Jan 2, 2010 6:59pm Jan 2, 2010 6:59pm
joel breaks out the performance of his forex and silver position.

Trading account equity: $ 2,816.41
Loss from previous week: $ 214.56.

Silver position equity: $ 3,610.00
(Current XAG price: $16.20– 1000 unit position average: $12.59)
TOTAL Equity: $ 6,426.41

so even if he took $500 and turned itinto 2800 in 2 years.........thats pretty good

I dont get what you are saying. On one hand you are saying that you generated a 20 to 30% return per year, yet you can't trade it because of the drawdown, yet you know it makes money..........

What "rules" were you testing for "DIBS" and how did you "fail"?




Quoting alter
I backtested FSP and ONS on all the pairs. I dont think I would be able to trade it as DD was often over 50% of the account just by risking 1% per entry/per pair.
However results were positive between 20-30% pa over 5 years for FSP and 10-15% for ONS. The reason why Joel has such a big gains could be due to silver position that he stared to accumulate at the beginning of the year and better MM.
I backtested DIBS over 1000 trades, but I have failed.
  • #9,034
  • Jan 3, 2010 3:59am Jan 3, 2010 3:59am
Quoting razorboy

What "rules" were you testing for "DIBS" and how did you "fail"?
I think he means that results were negative. You can do backtest at first with minimal rules and later see what works the best but here is the bottom line for me at least at this point.Time after time I go back to DIBS with different back tests and once again I am finding that results just a bit negative or at best break even.
I respect Joel and I am really grateful to him for FSP, but I just don't understand why for fairly straight forward strategy like DIBS results just not there not only for me but for many people who actually did some work backtesting.
All I think that, this strategy like all others in FF. If you know how to trade (discretionary) then you will make money with any strategy but if you don't like 95% then DIBS just not for you.
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #9,035
  • Jan 3, 2010 4:30am Jan 3, 2010 4:30am
Quoting kiwi_trader
That is interesting alter;

I was of the impression that ONS probably had better stats than FSP. What was your finding on them individually? What sort of allowances had you made for slippage and commissions?

Thanks.
Hello kiwi
My broker doesn't have commissions just spread that I included in the trades. As I use limit orders there is no slippage issue as well.
Well, I had slightly better results with FSP but I did baktest for ONS only for 2 years(5 years FSP). I think MM plays important part of the system. I had a fixed 1% risk per trade/pair. When the system is performing well your equity is rising in slower pace than it is falling when system is preforming badly. It is because your 1% risk at the top of the equity (before DD), is much higher (in term of money) then it was at the bottom. Maybe some sort of martigale MM would be better for this kind of system.
Joel uses different MM as I have comapared results. He havent revealed it but it should not be a problem to derive his MM rules from the results presented.
alter
  • #9,036
  • Jan 3, 2010 5:05am Jan 3, 2010 5:05am
Quoting razorboy
joel breaks out the performance of his forex and silver position.

Trading account equity: $ 2,816.41
Loss from previous week: $ 214.56.

Silver position equity: $ 3,610.00
(Current XAG price: $16.20– 1000 unit position average: $12.59)
TOTAL Equity: $ 6,426.41

so even if he took $500 and turned itinto 2800 in 2 years.........thats pretty good

I dont get what you are saying. On one hand you are saying that you generated a 20 to 30% return per year, yet...
Yes results are great last 2 years, as I said i think it is due to good MM approach.
The result itself however, is not only one parameter that Im looking at. I want to see how my equity behaves over time, and if I'm psychologically prepared to take 40-50% DD. Well, I'm not. U don't get 20-30% each year, some years you earn 100% some years -20%. Maybe I didn't expres myslef right as I wrote 20-30% pa, I meant on average not every year, sorry for my english.
Regarding DIBS, I used standart rules. I used 0600 GMT as my open, last trade I took was at 1500 GMT. I took every IB that met conditions described in the thread. As an exit I took 1/2 off at 1:1 and second half on SL that I moved below/above preceeding swing low/high. When I had free trade I took other positions only in the direction of the trend. I have fail to achieve consistency which is not DIBS problem however. I think , I just was missing something.
alter
  • #9,037
  • Jan 3, 2010 6:00am Jan 3, 2010 6:00am
Quoting Andy12
I think he means that results were negative. You can do backtest at first with minimal rules and later see what works the best but here is the bottom line for me at least at this point.Time after time I go back to DIBS with different back tests and once again I am finding that results just a bit negative or at best break even.
I respect Joel and I am really grateful to him for FSP, but I just don't understand why for fairly straight forward strategy like DIBS results just not there not only for me but for many people who actually did some work backtesting....
A word about DIBS.

Well - I "know" how to trade. And I make money. And you are right about that I will make money with any ADEQUATELY strategy if I "know" how to trade.

The key about "knowing how to trade" is mentioning some times yet in this thread. You are probably blind if you have not seen it by now.

The key is taking big win trades (very rarely) through very lot of losses (very-very often). You have to take that profitable TAILS and paid for them through numerous losses.

Like my dear mentor say everytime - "your goal in trading is to catch runner. This is your true job description". And "your job is to cut that loser short, no matter what. Do not worry about how many times you'll have to cut that loser, at the end you will get the runner".

Get it? If not - you do not get the trading at all.

Just look around - how many people trade succesful DIBS or very same trading concepts (inside bars). Do you need more proof? These succesful people did make already a lot of hints about properly trading in this thread... Do not you see it???

James996 has said already ALL you need about trading DIBS and IB's.
PipMan has said already ALL you need about trading DIBS and IB's.

So - why instead trading it you just tell us that one can't make money if one hasn't some information from cosmos?????????????????

All information you need in trading is - you have to catch the big profitable wave, and to pay for it through many little losses... That's it.

I think (my humble opinion) that this thread would be some more clear and more useful if we would not have here so much of negativity from different posters.

If we have all we need to trade succesfull - why all we do here is trying to improve what already works, and saying that it doesn't work????
I think we need to put more energy to trading, to consistency, and optimism, because without proper attitude and optimism there is no succesful trader there......


No offence.

Thanks.
  • #9,038
  • Jan 3, 2010 8:55am Jan 3, 2010 8:55am
Your key role is risk management. It is the epicenter of profitable trading. Ignore risk management and your a casino dweller. Adhere to it and the profits will take care of themselves.

So risk management is protecting your capital, only having nibbles taken at it while trying to catch a bigger fish. It is mentioned in alot of threads however very few people really understand what risk management and capital preservation is. If you really know what it is then you will very seldom have months that have huge gains, the only exception being when you catch and hold that big fish and the reward begins multiplying. It is all to common that people claim big gains in a month or so and then preach risk management.

If you risk 5% or more then thats your call, if you hold 10 positions at 2.5% or more risk, then thats your call also but consider the repercusions when things go wrong, your downside will be huge (% wise, from a capital POV it depends on your account size).

The benefit on long tails, sound MM and an account capital that you care about is that even with less than 1% per trade you can increase your account by a substantial amount in comparison to market professionals while minimising downside.

The vast majority ( I was also part of this crowd until a paradigm shift last year) still come expecting to not only beat the major market but absolutly smash and obliterate the numbers with 'reckless' trading, while preaching a sound risk management approach. If you do your backtesting then look for an edge that you can exploit, not a rediculous number that releases endorphines and gives you a heighten belief that normal minds know is not sustainable. The game is longevity not click, click boom. Those who are trading in a decade with the same account should have found the beauty of compounding rollover and also witnessed the self destuction of 'traders' around them.

Trade smart, trade less and look for a long term future, whether it be on a full time trade basis or the little extra you need each month to cover yourself.

Razor
  • #9,039
  • Jan 3, 2010 9:43am Jan 3, 2010 9:43am
Razor I do not risk 5% per trade I have never said that. I even think 1% is too much for DIBS as from my backtest I would be comfortable to risk maybe 0.5% trading majors.
The real challenge is to keep taking losers and do not miss big winner. Because if u do for whatever reason u will probably join 95% other traders.
  • #9,040
  • Jan 3, 2010 9:47pm Jan 3, 2010 9:47pm
Wouldn't a 200 or 365 ma give us a good filter for DIBS? Too many pairs are ranging these days and IBs often go sour even when trading the "hot hand". Another good filter would be to put the entry at the break of the previous bar rather than the break of the IB. What do you think?
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