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The DIBS Method... No Free Lunch continues

  • #9,041
  • Jan 3, 2010 11:40pm Jan 3, 2010 11:40pm
Quoting alter
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.
My comment was general and not directed at you, if it was a response to your comment you would see your post in 'quotes'.

Razor
  • #9,042
  • Jan 3, 2010 11:47pm Jan 3, 2010 11:47pm
Quoting albertsy2
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?
It has been covered and there are more posts than most would care to mention about filtering the process. Back test it with what ever you like, chances are that no matter what you do you will miss some good and bad trades by filtering.

Trading is not about doing everything in your power to avoid loosing trades, really you dont know if a trade is going to be a winner or looser until after the fact so trying to predict the future will get you no where and that is all traders are looking for by filtering.Regardless of
the model, coming in and offering advice without doing any testing with your suggestions is futile and a waste of time. So be proactive, do some testing and then come back with some figures.

Something along the lines of 'hey all I took IB data from 2002 till today, put a """ EMA and whatever else and testing both with and without and these are my results'.

IF you do this and you have some firm data to corresponde with a better results with your filter then hey you have progress, but until traders (and that goes for all those who have made random comments like the above) start doing this then they are going no where, regardless of which thread they are at
  • #9,043
  • Jan 3, 2010 11:48pm Jan 3, 2010 11:48pm
Im back from my small vacation (as if you couldnt tell) so Ill be adding more to this thread and mine over the coming weeks.

Hope you all had a good break

Razor
  • #9,044
  • Jan 4, 2010 12:22am Jan 4, 2010 12:22am
Quoting Razor_trader
Im back from my small vacation (as if you couldnt tell) so Ill be adding more to this thread and mine over the coming weeks.

Hope you all had a good break

Razor
Keep up the good work. I'm not currently trading DIBS, but I like to keep up-to-date on the thread.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #9,045
  • Jan 4, 2010 12:51am Jan 4, 2010 12:51am
um, but is that kinda the point of trading?

you keep repeating the answer to your own question.........

Quoting alter
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.
  • #9,046
  • Jan 4, 2010 12:51am Jan 4, 2010 12:51am
i think the only think worth do discuss in trading DIBS is the exit.
  • #9,047
  • Jan 4, 2010 12:56am Jan 4, 2010 12:56am
MM cannot change a losing strategy into a winning one.........

Quoting alter
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...
  • #9,048
  • Jan 4, 2010 6:43am Jan 4, 2010 6:43am
When you test dibs - are you building multiple positions in the same direction when new inside bars appear?

what sort of exit did you use?

The only issue I have seen with hourly charts is that you often miss opportunities to add additional positions when inside bars occur during non-prime trading hours..

you must be bigger when you are right than when you are wrong....

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....
  • #9,049
  • Jan 4, 2010 12:29pm Jan 4, 2010 12:29pm
I agree completely with Andy12. I have backtested Dibs and FSP on tradestation and both are LOSING STRATEGIES. There is no edge to these systems. If you think you can 'beat' the system using a secret money management approach or by some discretionary approach then good luck to you.... Now the question is: has anyone attended Joel's workshop and managed to backtest the systems for which they have paid 1000 USD AND been able to get the same equity curves that he advertises?... I suspect that the equity curves are very much like those for dibs and fsp... Can someone prove me wrong?
  • #9,050
  • Jan 4, 2010 1:42pm Jan 4, 2010 1:42pm
Quoting patrickon
I agree completely with Andy12. I have backtested Dibs and FSP on tradestation and both are LOSING STRATEGIES. There is no edge to these systems. If you think you can 'beat' the system using a secret money management approach or by some discretionary approach then good luck to you.... Now the question is: has anyone attended Joel's workshop and managed to backtest the systems for which they have paid 1000 USD AND been able to get the same equity curves that he advertises?... I suspect that the equity curves are very much like those for dibs and...
This post and your previous post are probably better suited for the Commercial Section of the Forum. Also, as a member of Forex Factory you are in violation of RULE#3.

http://www.forexfactory.com/userguide.php#rule3
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #9,051
  • Jan 5, 2010 1:00am Jan 5, 2010 1:00am
Quoting razorboy
When you test dibs - are you building multiple positions in the same direction when new inside bars appear?

what sort of exit did you use?
.
Answer to your first question. No. I am not building multiple positions. Do you think it can make a difference?
Answer for your second question. I divide position on 3 parts first exit is at 1R, second at 2R, and third at 5R. This worked the best and brought me barely break even results.
Razorboy what is your exits any advise, I want to find something that might work.
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #9,052
  • Jan 5, 2010 1:24am Jan 5, 2010 1:24am
No offense taken. Would you care to share your exit strategy?
And trust me I rather read posts before doing backtests so I read all this thread and read multiple times PC posts and James. I have to re-read PipMan though, maybe he has something magical to say. And it is all sounds good until you do backtests. So could you share your exit strategy?
Quoting dim4ik42
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....
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #9,053
  • Jan 5, 2010 1:59am Jan 5, 2010 1:59am
Quoting Andy12
No offense taken. Would you care to share your exit strategy?
And trust me I rather read posts before doing backtests so I read all this thread and read multiple times PC posts and James. I have to re-read PipMan though, maybe he has something magical to say. And it is all sounds good until you do backtests. So could you share your exit strategy?
I can understand your words and at least you have taken the time to read through the thread and in some cases re read certain aspects. Backtesting is really essential for you to get a hold of the info that has been spread. It is there for you to come to a decision on whether it is viable for you to do so I am glad that you are considering it, even on just a small level, once you have got the idea from your reading.

Exit strategy is really the only thing that hasnt got an answer. Entries are defined, the bar is define, time frame and how to trade this way is defined but exit is really up to the user.

Some use the half off at 1:1 which is the standard way of helping overcome psychologically the runner but as most are aware of this is an event that doesnt happen very often and when it does there is usually alot of concern over handing back alot of pips when the market does its retrace so there are some options.

Having a trailing stop is one. Trail it either manually behind an EMA or have the trade setup with a 50 pip trail (whatever figures).

Have a fixed exit. Depending on your tolerance it may be more or less. While this will give you profits at the point it will null the running aspect that gives this method some of its viability

Move your SL to BE after 1:1 so you have profit locked in and then place your SL under the previous swing Low/High. Provided the market runs in your direction for a period without a big retrace then your order will stay in and in the event it pulls back then you have 2 sets of realised profit. You get a small payment at 1:1 and another later on.

The other option which I adopted and still use more often that not is to place your first exit (designed for 1:1) after the market has passed through. By doing this you will have the opportunity to get more out of your first off lots when the market breaks out strong. Doing this method I normally get 2x or better for my first lot and in the event the trade doesnt quite get there your worst case scenario is 1:1 when it comes back and takes it out. You can also work with taking 2/3s off at the first point. This will realise more profit in the short run while still giving a small position an opportunity to grow.

Or just take profit when you feel like it. Set your trade up into 3 or more orders and take profit at 1:1, 3:1 and then run or adapt one of the above.

In the end the exit is comparable to any other model in that your goal is to gain more than you loose. You will not know ahead of time whether your choice to exit a trade is going to be better or worse for any of the above, unless you have a crystal ball. My suggestion is to give backtesting a go with a few different exit methods. Trail it over the course of 3-6 months on a demo to get a plan ironed out and then evaluate.

The hardest part is going to be making the decision to tackle a model and learning about it and yourself an how well you compliment each other. No amount of answers others give you will matter if in the end you cannot get a trade down. If you are super conservative and your talking to some people who are more comfortable with the risk there will be a clash and in some cases you may not continue because of the information you have recieved.

What I have given above is enough for anyone whether they are aggressive or conservative, you can tweek them more or less to suit you.

Hope this helps answer some questions

Razor
  • #9,054
  • Jan 5, 2010 3:00am Jan 5, 2010 3:00am
Razor trader. Thanks for the answer. I have a bad memory but I think I tried pretty much everything you described for exit strategies.
About so called runners. I found, in my backtest at least, that on 100 trades it is reasonable to expect that one trade on average will reach 21R. So it is not profitable to only look for just one runner. Because small loses will outweight your one big winner.
It will be profitable if one of those 100 trades will reach more then 100R. Am I wrong about this? I actually wish I am, so can anyone confirm what on average you can expect one max average trade out of 100 trades.
So what we left then is only discretionary trading. That is my point. And for discretionary trading you don't really need any strategy. Just buy or sell randomly and if you good enough you will be in profit if not then you will lose.
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #9,055
  • Jan 5, 2010 3:24am Jan 5, 2010 3:24am
Razor trader I like to ask you one straight forward question, in your live account do you positive or negative with DIBS?
"Every battle is won before it is ever fought." - Sun-tzu, The Art of War.
  • #9,056
  • Jan 5, 2010 5:56am Jan 5, 2010 5:56am
PC has put all these answers out there........

correct me if i am wrong, but I don't think I ever saw his say that you should exit a position as you described.

Exits.............the longer the hold the better.

I think it is about time that someone shut this thread down as it really has all been said before.



Quoting Andy12
Answer to your first question. No. I am not building multiple positions. Do you think it can make a difference?
Answer for your second question. I divide position on 3 parts first exit is at 1R, second at 2R, and third at 5R. This worked the best and brought me barely break even results.
Razorboy what is your exits any advise, I want to find something that might work.
  • #9,057
  • Jan 5, 2010 6:20am Jan 5, 2010 6:20am
Quoting Andy12
Razor trader I like to ask you one straight forward question, in your live account do you positive or negative with DIBS?
My account is currently positive but it would be almost impossible to give you the figure (for IBs) because it is not the only method of trading. Also I trade IBs on a 4 hour to daily chart basis, very rarely do I take hourlys. It is not that I dont believe in the hourly process its just I do all my analysis in the morning and then am only at my computer at small intervals so 4 hourlys give me an option that doesnt require being stuck at my screen.

I still trade IBs and I love them for there simplicity however without sounding like im contradicting myself they are just a bar. Pins bars offer some great advantages too and combined with IBs they can be a great sign of potential reversals.

Razor
  • #9,058
  • Jan 5, 2010 6:29am Jan 5, 2010 6:29am
Quoting razorboy
PC has put all these answers out there........

correct me if i am wrong, but I don't think I ever saw his say that you should exit a position as you described.

Exits.............the longer the hold the better.

I think it is about time that someone shut this thread down as it really has all been said before.
It is true that there are repeated questions but I believe it is due to the length of the thread. I love to read (and write) so for me a 1000 + page journal is probably the equivilent to a 100 page book, in most cases I can get through it in a night. Others are not the same and they dont wish to read which is by choice. It is also the choice of those who have read the thread to either provide feedback or not.

Shutting down the thread is not an option because this is still a viable thread that has posters. The one thing that it has lacked for some time is charts and trades which is something I am looking to get back into as this month draws on. This goes for anyone else. The reason this thread has probably copped alot of critics is due to this. If there were traders still devoted to the cause and who were constantly posting both winners and loosers then I believe it will, much like when I first came across it, become of more use.

The more use that the pages hold the less likely that the words of critics and lazy people will stand out. At the moment there just seems to be so much against the idea that when new traders come along that is the last thought (also most just read the last few pages to see if theres results being posted) they are left with and hence they post the questions.

So for those who have stood by the cause it is time to get busy with some trades and some charts.

Razor
  • #9,059
  • Jan 5, 2010 6:31am Jan 5, 2010 6:31am
Quoting patrickon
I agree completely with Andy12. I have backtested Dibs and FSP on tradestation and both are LOSING STRATEGIES. There is no edge to these systems. If you think you can 'beat' the system using a secret money management approach or by some discretionary approach then good luck to you.... Now the question is: has anyone attended Joel's workshop and managed to backtest the systems for which they have paid 1000 USD AND been able to get the same equity curves that he advertises?... I suspect that the equity curves are very much like those for dibs and...
Are you going to back up the claims with some screen shots of results along with the parameters that went into the testing. So far there have been a good number of critics who have placed there claims but have never posted results.

Razor
  • #9,060
  • Jan 5, 2010 6:42am Jan 5, 2010 6:42am
To back up some of the claims before here is a screen shot of a Pin/high wave bar (could almost argue it either way) followed by an IB that tanked south. It is a classic example of the market reaching an exhaustion point (over bought/sold) and the IB being a confirmation of sorts. This goes against the rules as it is above the 6.00 open however some thousand posts ago I mentioned being discretionary and trading setups that you believe offer a better outcome. Did I take this trade, certainly not but it took me about 2 secs of opening the chart and it stood out like dogs perverbials.

To analyse the setup we would have had a 29 pip risk so say 35 including spread. The trade tanked quite nicely and for those who place 1:1 after the market has moved through would have netted much better than 1:1. At the moment the trade is 8x R/R and if you trailed your first half lot I imagine there would have been an opportunity for at least 3-4x reward.

Chart below
Attached Image
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