The DIBS Method... No Free Lunch continues | Page 469 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The DIBS Method - No Free Lunch Returns 13 replies

No Free Lunch but all the Free Coffee you can drink 736 replies

Peter Crown's DIBS method revisited 14 replies

DIBS Method EA 11 replies

Problem using Dibs EA 4 replies

Attachments: The DIBS Method... No Free Lunch continues
Exit Attachments

The DIBS Method... No Free Lunch continues

  • #9,361
  • Mar 8, 2010 3:11am Mar 8, 2010 3:11am
Quoting bluefish
Sorry about the deletion. It was 2am when I was editing my original post



Maybe I can be a little help. Below is a screenshot of 3 different simulated equity curves.
Testing time is 2 yrs, sample of close to 800 individual trades.

Blue - moving to BE after distance of 1:1 (R:R) has been reached
Pink - taking half off at 1:1
Green - No TP, no moving to BE

Starting equity 1000 EUR, fixed risk per position.
The backtest doesn´t include swap costs (rollovers).
Tested on tick data level.

Bluefish
this is eyeopening for maybe some traders, who start trading dibs.
even after 300 trades the green line is only breakeven!

so u trade approximatly 9 month and u will have to wait for the big run of the year. and if u miss these few trades after 300 trades your account will not gain!
  • #9,362
  • Mar 8, 2010 3:24am Mar 8, 2010 3:24am
Quoting RussiaTrader
this is eyeopening for maybe some traders, who start trading dibs.
even after 300 trades the green line is only breakeven!
Well..you´re right. I was around BE after few trades when I started live...and then it went down. Being a risk-averse person, I decided that until I have bulletproof evidence about net expectancy of this system and how it behaves, I will not trade it, because in my mind I had LOTS of questions... which showed to be pretty time consuming for manual backtest...

What happens, if I use Trailing SL like ... ?
What happens, if I take half off at point XY ... ?
What happens, if I adjust my positions sizing to ... ?
What happens, if I trade only during X day or from X to Y....?
What happens, if I enter max. 3 time per currency per week...?
What happens, if I take longs only when....?
What happens, if....

Bluefish
  • #9,363
  • Mar 8, 2010 7:45am Mar 8, 2010 7:45am
bluefish,

Were you taking every DIBS, or did you filter on up and down days per Peter Crowns method?

Also, which pairs did you use in your test?

Maybe I've just been lucky and haven't tested DIBS long enough, but about 1/2 of my trades (or more) reach the 1:1 mark. It's a no brainer to take some profit there and let a smaller position try to catch the whale.

I agree with razorboy that this lets you use higher leverage, risking 2%-3% per trade.
  • #9,364
  • Mar 8, 2010 8:06am Mar 8, 2010 8:06am
Quoting dr_zeus
bluefish,

Were you taking every DIBS, or did you filter on up and down days per Peter Crowns method?

Also, which pairs did you use in your test?

Maybe I've just been lucky and haven't tested DIBS long enough, but about 1/2 of my trades (or more) reach the 1:1 mark. It's a no brainer to take some profit there and let a smaller position try to catch the whale.

I agree with razorboy that this lets you use higher leverage, risking 2%-3% per trade.
i think nobody can trade it with 2 or 3% risk per trade. its far to0 much when u think about that the hitrate of a 1:1 trade is about 50% and if u start unlucky u will have more than 100 trades in a row with no success and trend.
u can also have a row with 10-15 consecutiv losses, which is devastating but very realistic.

u can easily lose 50-70% with a risk of 2% or more and then u will quit.
this is my experience with a risk of 2% or more.
  • #9,365
  • Mar 8, 2010 8:09am Mar 8, 2010 8:09am
Quoting RussiaTrader
i think nobody can trade it with 2 or 3% risk per trade. its far to0 much when u think about that the hitrate of a 1:1 trade is about 50% and if u start unlucky u will have more than 100 trades in a row with no success and trend.
u can also have a row with 10-15 consecutiv losses, which is devastating.

u can easily lose 50-70% with a risk of 2% or more and then u will quit.
this is my experience with a risk of 2% or more.
When you trade DIBS along with other methods and higher timeframe price action, it is profitable. If you see a pin bar on the 4 hour, which direction do you think you should trade that dibs trade? IBs are consolidation, nothing more. They, more often than not, break in the direction of the previous trend. It's simple stuff, I don't know why everyone makes it so ridiculously difficult.
I dream, therefore I become.
  • #9,366
  • Mar 8, 2010 8:53am Mar 8, 2010 8:53am
Quoting mike w
When you trade DIBS along with other methods and higher timeframe price action, it is profitable.
did i say the opposite?

please, read my post again!
  • #9,367
  • Mar 8, 2010 11:04am Mar 8, 2010 11:04am
Quoting dr_zeus
bluefish,

Were you taking every DIBS, or did you filter on up and down days per Peter Crowns method?

Also, which pairs did you use in your test?
It is MY version of this strategy - I modified it to suit my needs. The curves shown on the posted chart were only for demonstration, what one can expect from taking profit at 1:1 or moving to BE.

Backtest was run on E/U.

Bluefish
  • #9,368
  • Mar 8, 2010 11:21am Mar 8, 2010 11:21am
Quoting mike w
It's simple stuff, I don't know why everyone makes it so ridiculously difficult.
You are a very funny man!
Gone to a better place
  • #9,369
  • Mar 8, 2010 1:14pm Mar 8, 2010 1:14pm
you are using dibs to build positions. This is analogous to putting up your ante for a poker game, you arent putting on one position and seeing if it turns out to be a winner....

Would I play hourly dibs with 2 to 3% risk a trade, probably not, but higher time frame charts arent too painful with that sort of size



Quoting RussiaTrader
i think nobody can trade it with 2 or 3% risk per trade. its far to0 much when u think about that the hitrate of a 1:1 trade is about 50% and if u start unlucky u will have more than 100 trades in a row with no success and trend.
u can also have a row with 10-15 consecutiv losses, which is devastating but very realistic.

u can easily lose 50-70% with a risk of 2% or more and then u will quit.
this is my experience with a risk of 2% or more.
  • #9,370
  • Mar 8, 2010 1:33pm Mar 8, 2010 1:33pm
Quoting razorboy
Would I play hourly dibs with 2 to 3% risk a trade, probably not, but higher time frame charts arent too painful with that sort of size
Definitely! 2-3% per trade using basic form of this strategy is asking for some serious DD
  • #9,371
  • Mar 8, 2010 4:28pm Mar 8, 2010 4:28pm
close to 3000 pips now

As this is just a small challenge account - the goal is to blow it up using dibs for the next 5 years, right now I am sometimes risking upto 6% a position
Attached Image (click to enlarge)
Click to Enlarge Name: gushort up date.JPG Size: 100 KB
  • #9,372
  • Mar 9, 2010 1:09am Mar 9, 2010 1:09am
Quoting razorboy
close to 3000 pips now

As this is just a small challenge account - the goal is to blow it up using dibs for the next 5 years, right now I am sometimes risking upto 6% a position
good luck!

the markets where cosy to u in the last months. we had good trends.

what are u doing if u have 15 loses in a row?
with 6% risk per position u are very near of risk of ruin.
  • #9,373
  • Mar 9, 2010 1:41am Mar 9, 2010 1:41am
Quoting bluefish
15 losses in a row on D1? ... this is asking for some backtest

Bluefish
i wouldnt post here if i had not made these backtests years back AND experienced in my carrer these consecutive 15 losses several times.

its a simple matter of mathematics. if you have a chance of 50% that u hit the 1:1 level, then 15 losses in a row are "normal" and to be as a serious tader expected and in the plan.

the main target in trading is to "stay alive in bad times". if u are not prepared for a storm then your house will blow up.

nethertheless you can make more than 100% a year with risking only 1% of your equity.
i know, this is not really related to this thread, but when i read posts of some folks here i feel it makes sense.

i think also this is the reason why some are here suggesting that dibs is not working for them. because they are expecting an 70 or 80% hitrate, means in 70% of the time u hit your 1:1 target-this is not reality!
  • #9,374
  • Mar 9, 2010 5:01am Mar 9, 2010 5:01am
the other issue is that people dont understand how to build positions using IB's to measure off risk. If you only play one position at a time, then yes, you will not make money with this. you see it on this message thread where people will say i only put on 3 positions max or silly stuff like that


Also, as my account grows, the amount of risk i take falls. It all depends on the size of the IB that I am entering in off of, but given the frequency of their occurance, i really dont over trade and in the 17 years of back testing i did with daily data, the drawdown was never anywhere close to that extreme.

Since I started this experiment, playing two pairs, I have put about 80 to 90% on the account......including all my losses


Quoting RussiaTrader
i wouldnt post here if i had not made these backtests years back AND experienced in my carrer these consecutive 15 losses several times.

its a simple matter of mathematics. if you have a chance of 50% that u hit the 1:1 level, then 15 losses in a row are "normal" and to be as a serious tader expected and in the plan.

the main target in trading is to "stay alive in bad times". if u are not prepared for a storm then your house will blow up.

nethertheless you can make more than 100% a year with risking only 1%...
  • #9,375
  • Mar 9, 2010 7:34am Mar 9, 2010 7:34am
Quoting razorboy
the other issue is that people dont understand how to build positions using IB's to measure off risk. If you only play one position at a time, then yes, you will not make money with this. you see it on this message thread where people will say i only put on 3 positions max or silly stuff like that
Could you explain your position management a bit further ?

Quote
Also, as my account grows, the amount of risk i take falls. It all depends on the size of the IB that I am entering in off of, but given the frequency of their occurance, i really dont over trade and in the 17 years of back testing i did with daily data, the drawdown was never anywhere close to that extreme.

Since I started this experiment, playing two pairs, I have put about 80 to 90% on the account......including all my losses
So you only trade this on 2 pairs ? Which do you prefere ?
I trade intraday pin's on EU & GU for a couple of weeks now, previously i used to watch 15+ pairs, really stressing my mind.

Since i started to focus these 2 pairs, my account is up 20% and i dont got that stress anymore, really enjoying !
Never whishing, always trading.
  • #9,376
  • Mar 9, 2010 8:14am Mar 9, 2010 8:14am
Quoting Hova
Could you explain your position management a bit further ?

So you only trade this on 2 pairs ? Which do you prefere ?
I trade intraday pin's on EU & GU for a couple of weeks now, previously i used to watch 15+ pairs, really stressing my mind.

Since i started to focus these 2 pairs, my account is up 20% and i dont got that stress anymore, really enjoying !
If you know what you are looking for then you will understand that there are upsides and downsides to trading more pairs. Monitoring more pairs naturally gives you more exposure and opens up opportunities. It does not mean that you need to trade every IB on every pair you are watching, however over time you will start to see certain markets setting up better (hot hands) and when you see and understand combinations and larger directional bias' then you will start to allow for the larger market to give your reasons to trade. This is very true if you are trading IBs on daily timeframes more so than shorter timeframes.

It is great to hear however that you are enjoying success at the moment with a more focused point. It is up to the person to work out there comfort levels and having just a few pairs to watch can allow you to stay intune with the current action of those pairs.

Take care

Razor
  • #9,377
  • Mar 9, 2010 8:29am Mar 9, 2010 8:29am
Since almost all pairs trade relative to the USD, I play the G/U and U/J to diversify my geographic exposure. In the future I may see which pair is a good proxy for oil

I take every IB on my trend.........that is my position management

Quoting Hova
Could you explain your position management a bit further ?

So you only trade this on 2 pairs ? Which do you prefere ?
I trade intraday pin's on EU & GU for a couple of weeks now, previously i used to watch 15+ pairs, really stressing my mind.

Since i started to focus these 2 pairs, my account is up 20% and i dont got that stress anymore, really enjoying !
  • #9,378
  • Mar 9, 2010 2:20pm Mar 9, 2010 2:20pm
Quoting razorboy
Since almost all pairs trade relative to the USD, I play the G/U and U/J to diversify my geographic exposure. In the future I may see which pair is a good proxy for oil

I take every IB on my trend.........that is my position management
Hi razor,

Am I right in saying that you only trade the IB when it is in the same direction of the long term trend? I think PC traded IB's once he had got into the long term trend. Everytime he traded in the same direction (with success) he was just maximising his position with limited risk.

It is a shame we don't hear from PC anymore, as there was one critical question I would have put to him, after reading every single thread regarding this method.

Regards,
K
  • #9,379
  • Mar 9, 2010 2:37pm Mar 9, 2010 2:37pm
Quoting PeterCrowns
Thanks for the kind words about my posts - I'll tell TheRealThing later today when I call him (after the NFP action finally slows down).

Your results obviously show the benefits of being willling to hold onto winners and put up with multiple losers, over and over again.

In the for-what-its-worth department:

You really do get past the pain of losses at some point. When you finally realize that the losses are necessary discouragement to the individuals/institutions on the other side of our trades who haven't realized (or...
Peter,

I know this might sound ridiculous, but have you ever come accross anyone who was never prepared to enter a stop loss and was massively successful. If the currencies range nearly 70% of the time, using perfect mathematical formulas, would this not result in fantastic profits - especially if you caught the long term trend early on and only traded within that trend. "Know one thing for sure".

I have read your thread with interest and your friend: "The Real Thing".

K
  • #9,380
  • Mar 9, 2010 4:27pm Mar 9, 2010 4:27pm
Quoting Knight Rider
Hi razor,

Am I right in saying that you only trade the IB when it is in the same direction of the long term trend? I think PC traded IB's once he had got into the long term trend. Everytime he traded in the same direction (with success) he was just maximising his position with limited risk.

It is a shame we don't hear from PC anymore, as there was one critical question I would have put to him, after reading every single thread regarding this method.

Regards,
K
Give PC the respect he deserves!
What about finding the answers to Your questions on Your own and maybe share with us, if You feel that PC didn´t give us enough! How does that sound? You are member since March 2010 with 9 posts and You´ve read EVERY SINGLE POST in the DIBS thread?
16 traders viewing now