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The DIBS Method... No Free Lunch continues

  • #9,161
  • Jan 13, 2010 9:27am Jan 13, 2010 9:27am
Quote
the money comes in with intelligent exit strategies...and only that is worth to discuss!
u can destroy the best setup in the world if u dont exit proper.

i will tell u again and again where the money comes from: not from DIBS!!!

money comes from the EXITS!!!!
great its exactly what i think
  • #9,162
  • Jan 13, 2010 10:15am Jan 13, 2010 10:15am
Quoting RussiaTrader
this is why i postet earlier:

"i think the only think worth do discuss in trading DIBS is the exit."

u can trade (how i do it) forms of DOJIs, rangebreakouts, and variations of DIBS.
with DIBS u have just a SETUP - thats all!

the money comes in with intelligent exit strategies...and only that is worth to discuss!
u can destroy the best setup in the world if u dont exit proper.

i will tell u again and again where the money comes from: not from DIBS!!!

money comes from the EXITS!!!!

so please,...
Wise words these, 100% agree.

An IB bar simply gives you a set up that one may use to keep a structure in your trading and maintain discipline on the entries, also helps with over trading and helps you to focus on a particular type of trade. It is the trader that will make these trades profitable.

For me the two most important concepts in DIBS is buying above or below the daily open (I personally use Pivot Ranges) and buying and selling the strongest and weakest markets on the day (the most important). The inside bar is just a trigger, you could use a pin bar or whatever you like, I think to run through years of data, going from one IB to the next on a single currency chart and totalling up the wins/losses is missing the point really. The market is so much more dynamic than that...
Want what the market wants
  • #9,163
  • Jan 13, 2010 11:44am Jan 13, 2010 11:44am
hi everyone thanks for your great help there is a IB formed in Eur/USD 1 hour chart i jus want to know when IB formed isit only valid if a very next candle crosses it upwards or it will stay valid until any other candle moves up like in this chart after IB candle didnt crosses it upwards so am still waiting lets say if this candle ends up bearish and doesnt crosses IB upward can i trade if a next candle crosses it i mean isit still gona b a valid IB trade?
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  • #9,164
  • Jan 13, 2010 12:00pm Jan 13, 2010 12:00pm
Quoting imran84
hi everyone thanks for your great help there is a IB formed in Eur/USD 1 hour chart i jus want to know when IB formed isit only valid if a very next candle crosses it upwards or it will stay valid until any other candle moves up like in this chart after IB candle didnt crosses it upwards so am still waiting lets say if this candle ends up bearish and doesnt crosses IB upward can i trade if a next candle crosses it i mean isit still gona b a valid IB trade?
This isn't really a good time to take the dibs trade which is different from an inside bar trade. I suggest you read the first post of this thread. Other threads deal with inside bar trading.

Hope this helps
Gone to a better place
  • #9,165
  • Edited 1:12pm Jan 13, 2010 12:57pm | Edited 1:12pm
Quoting imran84
hi everyone thanks for your great help there is a IB formed in Eur/USD 1 hour chart i jus want to know when IB formed isit only valid if a very next candle crosses it upwards or it will stay valid until any other candle moves up like in this chart after IB candle didnt crosses it upwards so am still waiting lets say if this candle ends up bearish and doesnt crosses IB upward can i trade if a next candle crosses it i mean isit still gona b a valid IB trade?
Hi Imran84,

I'm very glad you brought up this point. Thanks! I hope I've understood your comment correctly. If not, I apologise, but it does bring up a valid point nevertheless that may be worth discussing.

To clarify:

If you have an IB ABOVE the daily open, and the next bar or few bars break below this before a break above, does that invalidate the IB, and vice versa for short trades?

I'm currently testing this, by a remarkable coincidence! Whether to invalidate the setup if price breaks to the wrong side or to ignore.

It's too early to say a definite yes or no.

My initial feeling is NO, because backtesting today a few large winning trades were from DIBs where the wrong side of the IB was breached before the price turned around to move in the right direction.

As long as price has not made a strong move to the wrong side and is 'undecided', then I am inclined to think it's okay to wait for a break in the right direction. The amount that price has moved in the wrong direction previously and/or the number of bars since the IB formed is something that I would not like to give thoughts on just yet.

I would suggest you to do backtesting on this, trying both methods. I don't recall if this was mentioned by Peter or discussed at length before, but some of his charts suggest, at least to me, that he does allow the price to break the 'wrong' side a little and he will later take the trade when the price breaks the IB in the right direction.

Below, (2nd image), is a screenshot showing an IB setup above the daily open. (20th May, 2009, EUR/USD, H1 Chart, around noon, GMT). So I was looking to go long on an upward break of this setup. However, price broke below it in the next hour, but turned around and went on to become a HUGE winner. At least, when I ran the strategy tester on MT4 in visual mode, that is what happened.

I've also attached a screenshot of the Daily chart, (1st Image), so you can see the outcome better.

Regards,

- TTP -
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Attached Image
  • #9,166
  • Jan 13, 2010 1:02pm Jan 13, 2010 1:02pm
were you building multiple positions in your test? adding on as new inside bars form?

it looks like you were looking at a 3 hour window each day.......

Quoting JackintheBox
ok, folks,

tired of testing lots of systems...I tried this one and again, I cannot understand the hype.

Some figures who speaks for themselves...

Trades from March2009-november2009:
At all inside Candles (only first candle 1h, based on 7GMT to 10GMT): 90
Trades possible: 52(38 not hit)
STOP_LOSS_HIT_BEFORE_HALFPositionClose_Possible:39/52 (*wow*)
Biggest win to the end of the day: 92 pips(average:56 Pips if win)
Stop_LOSS_HIT_average:-21,06 pips

at all:
win:56*13(it's a bit less because you close half of the position after SL-loss is in...
  • #9,167
  • Jan 13, 2010 1:13pm Jan 13, 2010 1:13pm
Dibs is just a frame work for acurately marking off risk and controlling over trading as entries are only as often as the pattern occurs.

There are other set ups that provide the same situation.........here is one:

throw up a Donchian channel........set it to 20+ and a 50period ma as well

long set up
when price is above 50 ma, when a candle forms below the midline of the channel, go long on the next candle if it breaks the high of the previous candle. Take half the position off when price hits the top of the channel and let the other run (follow with one of the channel lines as a TP)

your SL on the trade is the low of the candle that you used to gauge your entry on.

This limits the number of trades you take as the conditions are hard to satisfy and requires you to let them run.

This is obviously a break out/trend type trade so you get paid by outliers......

use the opposite to go short




Quoting RussiaTrader
this is why i postet earlier:

"i think the only think worth do discuss in trading DIBS is the exit."

u can trade (how i do it) forms of DOJIs, rangebreakouts, and variations of DIBS.
with DIBS u have just a SETUP - thats all!

the money comes in with intelligent exit strategies...and only that is worth to discuss!
u can destroy the best setup in the world if u dont exit proper.

i will tell u again and again where the money comes from: not from DIBS!!!

money comes from the EXITS!!!!

so please, please....[b]STEP...
  • #9,168
  • Jan 13, 2010 2:22pm Jan 13, 2010 2:22pm
Quoting razorboy
what was the pipage on these trades.......also, I probably would not trust anything other than a manual backtest, unless the basis for the test is actually tick data
Winning trades=13

1; 771 pips
2; 112 pips
3; 432 pips
4; 130 pips
5; 138 pips
6; 432 pips
7; 768 pips
8; 867 pips
9; 143 pips
10; 51 pips
11; 681 pips
12; 196 pips
13; 529 pips
  • #9,169
  • Jan 13, 2010 2:32pm Jan 13, 2010 2:32pm
Quoting takingthepip
Hi Imran84,

I'm very glad you brought up this point. Thanks! I hope I've understood your comment correctly. If not, I apologise, but it does bring up a valid point nevertheless that may be worth discussing.

To clarify:

If you have an IB ABOVE the daily open, and the next bar or few bars break below this before a break above, does that invalidate the IB, and vice versa for short trades?

I'm currently testing this, by a remarkable coincidence! Whether to invalidate the setup if price breaks to the wrong side or to ignore.

It's...
Hi Thankyou for your kind reply .the charts and the trade you have showed me IB formed and the very next candle after IB formed went down and then went up as a winner i did get this but what i was trying to ask is lets say IB formed and the Next candle after IB went down and end up as down bearish candle and after this candle another candle formed and went up from IB so do you think it would be a valid trade? sorry if i you didnt get it let me knwo then i can put more charts thanks for help
  • #9,170
  • Jan 13, 2010 2:33pm Jan 13, 2010 2:33pm
1. did you build positions along the way as price trended - adding positions as new inside bars present themselves?

2. What was the gross pipage - losers too

Quoting DemoForever
Winning trades=13

1; 771 pips
2; 112 pips
3; 432 pips
4; 130 pips
5; 138 pips
6; 432 pips
7; 768 pips
8; 867 pips
9; 143 pips
10; 51 pips
11; 681 pips
12; 196 pips
13; 529 pips
  • #9,171
  • Jan 13, 2010 2:44pm Jan 13, 2010 2:44pm
Quoting imran84
Hi Thankyou for your kind reply .the charts and the trade you have showed me IB formed and the very next candle after IB formed went down and then went up as a winner i did get this but what i was trying to ask is lets say IB formed and the Next candle after IB went down and end up as down bearish candle and after this candle another candle formed and went up from IB so do you think it would be a valid trade? sorry if i you didnt get it let me knwo then i can put more charts thanks for help
Hi Imran,
I think it will depend on YOU, what YOU have decided as YOUR trading plan from doing YOUR manual backtest and seeing with your own eyes what sort of patterns emerge, if you haven't done the backtest's or forward test you wont have an idea of whether to let that trade go by or you wont have an idea that maybe just maybe that trade will be the beginning of the strongest trend ever, and in hindsight you might sit back and say to yourself, self why did i not just bite the bullet and risk my 0.25% per trade or what ever your risk is, i could be sitting in a pretty good trend, but then again, when we get a runner there is always a good chance there will be MULTIPLE opportunities to get in on it.

it comes down to you and your tollerance.

that is just my opinion
for what it is worth

cheers
Geoff
  • #9,172
  • Jan 13, 2010 3:12pm Jan 13, 2010 3:12pm
Quoting razorboy
1. did you build positions along the way as price trended - adding positions as new inside bars present themselves?

2. What was the gross pipage - losers too

1 Yes,the maximum positions in any trend was three.

2 Sorry havnt got time to count them at the moment,work at 05.00 am.
  • #9,173
  • Jan 13, 2010 6:10pm Jan 13, 2010 6:10pm
was this the maximum that you could have put on or just the maximum that the trends/Ib's would allow?


Quoting DemoForever
1 Yes,the maximum positions in any trend was three.

2 Sorry havnt got time to count them at the moment,work at 05.00 am.
  • #9,174
  • Jan 14, 2010 12:37am Jan 14, 2010 12:37am
Quoting imran84
Hi Thankyou for your kind reply .the charts and the trade you have showed me IB formed and the very next candle after IB formed went down and then went up as a winner i did get this but what i was trying to ask is lets say IB formed and the Next candle after IB went down and end up as down bearish candle and after this candle another candle formed and went up from IB so do you think it would be a valid trade? sorry if i you didnt get it let me knwo then i can put more charts thanks for help
yes, they are valid.
no, they are not valid.
both is true.

i know people who take only the next IB and cancel after the hour the order and other who leave them there for the next hours.

the best is to find it out by your own research.

why? cause u will need a lot of selfconfidence in real trading and this comes only from your own analyses.

even if the best trader in the world is pinpointing on a strategy, i would first doubt and test by myself.
the reason is, we are human kinds and born to make mistakes. so i want rather make my own mistakes and learn from them.
  • #9,175
  • Jan 14, 2010 2:44am Jan 14, 2010 2:44am
Quoting takingthepip
My initial feeling is NO, because backtesting today a few large winning trades were from DIBs where the wrong side of the

- TTP -

EUR/USD has been ranging for the past 3 days. Not a good time to trade the DIBS strategy.
Gone to a better place
  • #9,176
  • Jan 14, 2010 2:56am Jan 14, 2010 2:56am
Quoting smikester
EUR/USD has been ranging for the past 3 days. Not a good time to trade the DIBS strategy.
but a good time to start now!
  • #9,177
  • Jan 14, 2010 3:15am Jan 14, 2010 3:15am
Quoting RussiaTrader
but a good time to start now!
I don't understand you. Until EUR/USD breaks out of its range then DIBS would not be a good strategy. Ranging markets create more inside bars, but they are less useful to us because they have less momentum when they break out.
Gone to a better place
  • #9,178
  • Jan 14, 2010 3:29am Jan 14, 2010 3:29am
Quoting smikester
I don't understand you. Until EUR/USD breaks out of its range then DIBS would not be a good strategy. Ranging markets create more inside bars, but they are less useful to us because they have less momentum when they break out.
what my experimence is that a 3 days range market has a high probability to has in the very next days a trendday.
and therefore it is good to enter trades in DIBS after a 3 day range market.
  • #9,179
  • Jan 14, 2010 4:29am Jan 14, 2010 4:29am
Quoting razorboy
was this the maximum that you could have put on or just the maximum that the trends/Ib's would allow?
Morning everybody (or afternoon,or evening)

These trades were the maximum the trend would allow,but you have got me thinking maybe i might have missed some winning ibs because i like to leave a bit of a gap before i put on another possition.I will go back over my charts and see if i have missed any.
  • #9,180
  • Jan 14, 2010 6:01am Jan 14, 2010 6:01am
do you have a crystal ball that tells you when the range is going to break?

Part of the goal of dibs is to get in a trend near its beginning and start to build a position as the trend grows....you have to accept that there are going to be some losses here and also some surprise winners. In my backtesting, sometimes this was the only IB in what turned out to be a decent trend. Sure you could add a subjective filter to the method, like don't enter dibs in a ranging market, but what is your definition of a ranging market and are you consistent in that definition.



Quoting smikester
I don't understand you. Until EUR/USD breaks out of its range then DIBS would not be a good strategy. Ranging markets create more inside bars, but they are less useful to us because they have less momentum when they break out.
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