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The DIBS Method... No Free Lunch continues

  • #9,441
  • Edited 8:30am Mar 17, 2010 8:01am | Edited 8:30am
gratulations razorboy!

i think the possibilities of AUD.USD to be a longterm winner is good.
another IB now!
Attached Image (click to enlarge)
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  • #9,442
  • Mar 17, 2010 11:16am Mar 17, 2010 11:16am
Much thanks

I havent done any testing on the A/U - however, what I can say is that another key to this strategy is not to hit different pairs haphazzardly as you lose any edge to the method. If you always play a particular pair or play 2 pairs against each other (or however you do it), throwing in a new pair without willingness to keep playing it is probably not going to be a confidence builder.

that said, im going home and taking that A/U trade.......just joking.....


Quoting RussiaTrader
gratulations razorboy!

i think the possibilities of AUD.USD to be a longterm winner is good.
another IB now!
  • #9,443
  • Mar 20, 2010 7:24am Mar 20, 2010 7:24am
Hi this is my first post on FF and i have been going thru the DIBS method and its fantastic i love the simplicity and effectiveness .

Whilst going thru historical data on cable and circling open bars, IB's buy and sell points and stop loss and TPP i noticed that it maybe possible to use IBs in a shorter time frame as a type of scalp. Now im a total novice but this just came to me whilst looking at charts:

It may be possible to take a trade either side of the open and close of an IB irrespective of the daily open, so when PA closes below the IB then go short and if PA goes above the IB then go long.

This looks to work in some cases for smaller time frames. on a 1hr chart 2-3 or more bars. you would have to continually monitor the trade though.

Any thoughts or additions or tell me I'm completely wrong and Bonkers then please let me know

Hilton
Thank you J16 & Trader Dante
  • #9,444
  • Mar 20, 2010 12:30pm Mar 20, 2010 12:30pm
Quoting chartergas
Hi this is my first post on FF and i have been going thru the DIBS method and its fantastic i love the simplicity and effectiveness .

Whilst going thru historical data on cable and circling open bars, IB's buy and sell points and stop loss and TPP i noticed that it maybe possible to use IBs in a shorter time frame as a type of scalp. Now im a total novice but this just came to me whilst looking at charts:

It may be possible to take a trade either side of the open and close of an IB irrespective of the daily open, so when PA closes below the IB...
Welcome to the thread. Not bonkers at all. I think you are talking about a "straddle" trade and although the reward risk ratio is not so good on these trades they can be highly successful if the outcome is allowed to "run". I would be interested to know what you have found in back testing.
Gone to a better place
  • #9,445
  • Mar 20, 2010 12:54pm Mar 20, 2010 12:54pm
Quoting chartergas
Hi this is my first post on FF and i have been going thru the DIBS method and its fantastic i love the simplicity and effectiveness .

Whilst going thru historical data on cable and circling open bars, IB's buy and sell points and stop loss and TPP i noticed that it maybe possible to use IBs in a shorter time frame as a type of scalp. Now im a total novice but this just came to me whilst looking at charts:

It may be possible to take a trade either side of the open and close of an IB irrespective of the daily open, so when PA closes below the...

Yes, IBs can indeed be traded in many different ways. A few posts back is a link to a new thread that may well give more insight into the straddle approach.

As a word of encouragement I've taken a look at the 5min on GBPUSD, over the last 5 days (taking trades between about 9am GMT to 4pm GMT) and the results are 52.5% win rate with an average win of 1.78R.
  • #9,446
  • Mar 21, 2010 4:21pm Mar 21, 2010 4:21pm
Daily IB's

Short on the G/U (again) - in on March 19 off the March 18 IB. Already closed 1/2 the position as the trade went 1:1. 2nd half sitting at about 200 pips

USD yen - have been stopped out of two positions 1 long and 1 short in the past week. Am currently long - in at 90.76 (down about 45 pips in total across two positions). I have two long entries cued up for 90.706 and 90.817.

My daily bars start at 5 pm EST and I do not include any IB's that form sunday evening before 5pm est
  • #9,447
  • Mar 22, 2010 12:27pm Mar 22, 2010 12:27pm
God Dam i love this strategy!!

I have just started back testing it on metatrader.
with small lots but in under 5 mins i have just gained 15pips.
sounds small but hey i have never had a proper strategy to play and now i do and it works, i have gone through loads of historical data to pick out opens and IB to play which confirms it.

Thank you to every one on FF!!! I was thinking about blowing a couple of k on a course. All i needed was FF and some dedication.

I'm excited!!!

rant over - please carry on!!!
Thank you J16 & Trader Dante
  • #9,448
  • Mar 23, 2010 4:13pm Mar 23, 2010 4:13pm
Hi Guys,

I have read this thread multiple times and have always been intrigued by the potential of the method. However, when I backtested the strategy, I found that it is not a consistently profitable strategy.
I tested it on the 4 hr timeframe and across multiple timeframes and results were highly discouraging.

Here are the rules I followed -
1. Only buy when inside bar closes above the weekly Open. Only sell when the inside bar closes below the weekly open.
2. StopLoss is the other side of the inside bar.
3. Only conside those inside bars that have a range of less than 70% of the prior bar.
4. if an inside bar straddles the weekly open, the bias will be to sell only when the inside bar low is below the 48 period EMA.
5. An inside bar once created will trigger an entry search. The inside bar will become invalid if a bar close above/below the hi/lo of the bar prior to the IB.
6. If price has travelled more than 30% weekly ATR on long side, short entries will not be taken in that week. Conversely, if the price has travelled more than 30% weekly ATR on the short side, long entries will not be taken that week.
7. If long position open, short positions will not be entered till all the long positions are closed. Conversely, if short position is open, long positions will not be entered till all short positions are closed.
5. No trades during early Monday or Late Friday.
6. a new trade will be placed only when the prior trade has reached at least 1:1 RR distance. The prior trade does not have to be risk free.
7. Trades will be closed with a trailing stop. for a long trade, if the close is below the 48 EMA, the stop will be updated to the low of the bar that broke the MA line.
For a short trade, if the close is above the 48 EMA, stop will be updated to above the bar that broke the MA line.

I am sure that I might be missing something but am unable to figure it out. Hopefully some of you might have ideas about what is missing here?
  • #9,449
  • Mar 23, 2010 4:22pm Mar 23, 2010 4:22pm
Adding to the above post, if I add S/R and Fibs to the charts then I can and have traded DIBS profitably. However S/R and Fibs can be so subjective at times that it is almost impossible to code and backtest.

I guess the real power of DIBS might be in being discretionary about trading IB's but then if that is the case, how does one be really sure about the long term validity of the method to continue to trade it despite the long string of losses that will occur quite frequently with this method.
  • #9,450
  • Mar 24, 2010 1:57am Mar 24, 2010 1:57am
i took these 4 great IBs this afternoon and night.
another IB is showing up now, but i am a little tired.

they are really working pretty well in the night sessions.

i think the fact that chinese are heading to a superpower will also generate a lot of serious traders in the asian area. so this time will become more and more important in trading DIBS.
Attached Image (click to enlarge)
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  • #9,451
  • Mar 24, 2010 2:16am Mar 24, 2010 2:16am
Quoting RussiaTrader
i took these 4 great IBs this afternoon and night.
another IB is showing up now, but i am a little tired.

they are really working pretty well in the night sessions.

i think the fact that chinese are heading to a superpower will also generate a lot of serious traders in the asian area. so this time will become more and more important in trading DIBS.
Good trading and thanks for posting the chart. What a chart. It just proves trading can be straightforward. What could be simpler than that?
Gone to a better place
  • #9,452
  • Mar 24, 2010 5:35am Mar 24, 2010 5:35am
Interesting that the last EUR/USD H1 inside bar failed. No wonder I'm paranoid. I was lucky - I broke the rules and moved my stop.
Gone to a better place
  • #9,453
  • Mar 24, 2010 5:55am Mar 24, 2010 5:55am
1. how much data did you back test
2. Maybe you have a few too many rules. How do you know if any of these are valid or invalid rules?

Keep it simple................

A quick review of your rules

1. OK, I can see where you are coming from. But I dont really know if it has an impact on your results. Especially when you have all the other factors
2. OK
3. Why?
4. I can see the trouble with this situation. If the IB is below the moving average you are using for a trailing stop, you are obviously not going to go long. this is your buy/sell line
5. This could be your major issue. Let me see if this is what you mean. Say you get a short entry signal and then a new bar forms that has a higher high and higher low than your IB, you will not use the IB as an entry trigger at all? Or if a new bar breaks the high of the bar prior to the IB. Either way, this is probably killing a lot of entries for you
6. Probably way too complicated - over kill. it looks like you are trying not to lose
7. Of course.
8. Why? Especially if you are playing longer term. The only IB i will not use is the one that forms sunday evening est
9. Why?
10. your trailing stop is too complicated. you may be letting a trade run too much against you. why not just make it simple. Simply us a close below an MA.


Quoting Eklavya
Hi Guys,

I have read this thread multiple times and have always been intrigued by the potential of the method. However, when I backtested the strategy, I found that it is not a consistently profitable strategy.
I tested it on the 4 hr timeframe and across multiple timeframes and results were highly discouraging.

Here are the rules I followed -...
  • #9,454
  • Mar 24, 2010 6:59am Mar 24, 2010 6:59am
Quoting smikester
Interesting that the last EUR/USD H1 inside bar failed. No wonder I'm paranoid. I was lucky - I broke the rules and moved my stop.
during the day there are more faketrades then at night when most of the traders sleep. this strategy is already followed by a lot market players.
  • #9,455
  • Mar 24, 2010 7:09am Mar 24, 2010 7:09am
another pretty IB on the pound.
Attached Image (click to enlarge)
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  • #9,456
  • Mar 24, 2010 1:18pm Mar 24, 2010 1:18pm
Quoting Eklavya
Adding to the above post, if I add S/R and Fibs to the charts then I can and have traded DIBS profitably. However S/R and Fibs can be so subjective at times that it is almost impossible to code and backtest.

I guess the real power of DIBS might be in being discretionary about trading IB's but then if that is the case, how does one be really sure about the long term validity of the method to continue to trade it despite the long string of losses that will occur quite frequently with this method.
You're right, you cant automatically back-test a discretionary system. But you can manually - either by scrolling back the chart and "taking trades" as they come into view, or by buying some FX strategy testing software that allows you to trade on historical tick data.

How do you know that a discretionary system will keep working? Well, of course you don't, any more than an amazing back-tested automatic system will. But you'll be trading with small risk so if it looks like the method has stopped working you change the method, right?

But will inside bars really stop working? What do you think?
  • #9,457
  • Mar 24, 2010 6:15pm Mar 24, 2010 6:15pm
After taking a few losses in this zone of congestion that contained mutliple IB's, I am finally long 3 units risk free (3 positions were closed when the trades when 1:1) (follow this link to see when the congestion started http://www.forexfactory.com/showthre...77#post3544677)

Entry points (all triggered in the last 24 hours)

90.471 (SL was 90)
90.76 (SL was 89.97)
90.82 (SL was 90.29)

Let's see where this ends up
Attached Image (click to enlarge)
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  • #9,458
  • Mar 24, 2010 9:38pm Mar 24, 2010 9:38pm
again.........

Short three positions on the GU

1. in @ 1.5216 - already a risk free trade
2. in @ 1.4854 - sitting in draw down in this one......have not removed half the position yet
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  • #9,459
  • Mar 24, 2010 9:56pm Mar 24, 2010 9:56pm
Razor

There is probably few hundred more pips coming your way
  • #9,460
  • Mar 25, 2010 5:48am Mar 25, 2010 5:48am
i like to play for 1000's

Quoting robertw
Razor

There is probably few hundred more pips coming your way
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