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  • #9,501
  • Apr 12, 2010 3:00pm Apr 12, 2010 3:00pm
exactly......

When I did my testing, I did not make the assumption that the relationship between D1 and H1 was the same between say D1 (what I use to enter) and M1 (the monthly open). additionally, the same daily patterns of liquidity have less of an impact on longer term trends.

The only thing to grasp is finding a way to determine how long to let your winners run and how to cut them short when you are losing. I am sure that throwing on the additional filters may help with your results, but once I have a positive EV method, I am more concerned with my sizing algo....


Quoting HouseTrader
Well let me help, if I may...

I asked razorboy about a line bias to go long/short on D1, cause PC's original rules (and I've been here since the beginning) states the we must go LONG on the break of an 1H IB if price is ABOVE Daily Open LINE (thats the line bias, and vice versa for short).

He also stated that we could use IBs on 4H or D1, using as a line bias Weekly Open or maybe Monthly Open, the same way (above, go long, below, go short).... that's the reason for my question...

If I'm not wrong, razorboy is using a MA as a long/short bias.......
  • #9,502
  • Apr 13, 2010 8:10pm Apr 13, 2010 8:10pm
up about 850 pips at this point........all risk free............5 positions.......depending on what happens tomorrow, may have set up to at a 6th position.......

Am also long the G/U off of the 2 IB's that formed on the 7th and 8th of april.......have decided to stop taking 1/2 the position off when the trade goes 1:1 as I have a feeling sound money management is more important here
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  • #9,503
  • Apr 13, 2010 9:31pm Apr 13, 2010 9:31pm
In one of his posts, PC mentioned that someone did some massive testing on hourly IB and got a profit factor of between 1.21 and 1.27. Do you think you could get a higher profit factor by playing every IB over a 24 hour period (so you add to winning positions as needed) or would the low liquidity periods destroy profits?
  • #9,504
  • Apr 14, 2010 2:24am Apr 14, 2010 2:24am
Quoting razorboy
In one of his posts, PC mentioned that someone did some massive testing on hourly IB and got a profit factor of between 1.21 and 1.27. Do you think you could get a higher profit factor by playing every IB over a 24 hour period (so you add to winning positions as needed) or would the low liquidity periods destroy profits?
I remember Nathan did the testing and he found a greater PF by not taking off 1/2 @ 1:1 however I am sure all the testing was done through the london period with completion around close of London which would be a few hours into NY.

Not sure whether you would be a greater PF factor by trading through Tokyo and New York but with volitility being lower you would probably find you get a few head fakes. I guess you could do some testing as I am sure Nathan also found a timeframe that had better results. Whether this timeframe was a combination of timezones or just a 9 hour stretch taken at some other beginning time is going to remain an unknown.

Best of luck to you

Razor
  • #9,505
  • Apr 14, 2010 6:01am Apr 14, 2010 6:01am
I forgot that Nathan found another edge.....maybe this is it, but truth be told, my experience with most traders (regardless of their time frame) is that they don't have the patience to hold trades, relative to the length of the time frame they are playing

Ignoring all practical considerations associated with normal life, would it not be optimal to take all IB's across a 24 hour period, or at least use them to add on to trades that were initiated during the London session. What I found during my testing is that if I limited myself to only taking trades during london, is that I missed a lot of the add on opportunities that occurred and this significantly limited my ability to build bigger positions (and may have actually limited the profit factor of this approach). The numbers I have gotten from my testing in terms of profit factor and EV per trade are much greater than Nathan's, but of course given the larger time frame, I use smaller sizes, so in the end, I am not sure which is really better or worse

I am in the midst of transitioning between taking 1/2 off and 1 to 1 and letting the whole thing ride. Across my back testing, this amounts to about a 62% increase in net pips over the time period - not accounting for position sizing. My EV per trade/position was in the mid to low triple digits.

Some could make the arguement that my back testing did not go back far enough to include times when markets were "normal" - but you first have to define what a normal market is.........volatility goes thru cycles, geo-political events always come out of the blue and time and time again, no one ever sees the next economic catstrophe. On top of it all, its during the times of economic upheaval and instability that traders make money.........some times markets are tight, sometimes the are volatile, but the market is market..........its only abnormal when you arent making money

Quoting Razor_trader
I remember Nathan did the testing and he found a greater PF by not taking off 1/2 @ 1:1 however I am sure all the testing was done through the london period with completion around close of London which would be a few hours into NY.

Not sure whether you would be a greater PF factor by trading through Tokyo and New York but with volitility being lower you would probably find you get a few head fakes. I guess you could do some testing as I am sure Nathan also found a timeframe that had better results. Whether this timeframe was a combination of timezones...
  • #9,506
  • Apr 14, 2010 10:26am Apr 14, 2010 10:26am
Quoting razorboy
I forgot that Nathan found another edge.....maybe this is it, but truth be told, my experience with most traders (regardless of their time frame) is that they don't have the patience to hold trades, relative to the length of the time frame they are playing

Ignoring all practical considerations associated with normal life, would it not be optimal to take all IB's across a 24 hour period, or at least use them to add on to trades that were initiated during the London session....
As I recall, taking 1/2 off gave a profitability of 1.2 and letting the whole thing ride was 1.27, right? But taking half off smooths out the equity curve which I think is important.

I've been taking two trades, one is twice the size of the other and has a TP at 1.5% profit. The other only has a SL with a 0.5% loss, so if the bigger trades hits the TP and the smaller reverses to the SL, I still get 1%. If both hit SL, I lose 2%. I like getting 1% and letting a smaller position ride, although I've been out of the game for a couple of weeks due to family/work.
  • #9,507
  • Apr 14, 2010 10:33am Apr 14, 2010 10:33am
I'm not sure that taking trades between 6pm GMT and 6am GMT is wise - on my charts price is often sideways for most of that period with lots of IBs, followed by OBs, short moves up and down, which would produce a ton of losses - far more losers than winners.

The IB is a sign of indecision in a liquid market which is what we are looking to trade. In an illiquid market it is a sign of nothing more than a pattern in the sand from the waves - it's price moving but not being driven.
  • #9,508
  • Apr 14, 2010 10:51am Apr 14, 2010 10:51am
According to the DIBS rules, I believe you begin trading dibs at 6am GMT and trade the first 6-8 hours or so....

Quoting MattW
I'm not sure that taking trades between 6pm GMT and 6am GMT is wise - on my charts price is often sideways for most of that period with lots of IBs, followed by OBs, short moves up and down, which would produce a ton of losses - far more losers than winners.

The IB is a sign of indecision in a liquid market which is what we are looking to trade. In an illiquid market it is a sign of nothing more than a pattern in the sand from the waves - it's price moving but not being driven.
skype: ststroud. let's talk trading.
  • #9,509
  • Apr 14, 2010 11:18am Apr 14, 2010 11:18am
Im not talking about initiating new positions, I am talking about adding to existing ones....

Quoting MattW
I'm not sure that taking trades between 6pm GMT and 6am GMT is wise - on my charts price is often sideways for most of that period with lots of IBs, followed by OBs, short moves up and down, which would produce a ton of losses - far more losers than winners.

The IB is a sign of indecision in a liquid market which is what we are looking to trade. In an illiquid market it is a sign of nothing more than a pattern in the sand from the waves - it's price moving but not being driven.
  • #9,510
  • Apr 14, 2010 11:21am Apr 14, 2010 11:21am
Quoting razorboy
Im not talking about initiating new positions, I am talking about adding to existing ones....
Not sure I follow. You mean using the pre-existing stop but simply adding on the break of overnight IBs? Guess that could work.
  • #9,511
  • Apr 14, 2010 11:43am Apr 14, 2010 11:43am
Oops, too quick. I should have read the whole conversation before replying....I see what you guys are talking about now....sorry for not making any sense

Quoting tyler812
According to the DIBS rules, I believe you begin trading dibs at 6am GMT and trade the first 6-8 hours or so....
skype: ststroud. let's talk trading.
  • #9,512
  • Apr 14, 2010 6:24pm Apr 14, 2010 6:24pm
no, you do not use the pre existing stop. Every IB trade must stand n its own, with its own SL price, you just continue to add on as the trend continues.

My approach to trading IB's may be more Turtle-sque than PC's was...........


Once you have developed the ability to sit in a trade with a large profit and not panic out, but rather follow you plan for exiting the trade, then you know you have arrived



Quoting MattW
Not sure I follow. You mean using the pre-existing stop but simply adding on the break of overnight IBs? Guess that could work.
  • #9,513
  • Apr 14, 2010 6:35pm Apr 14, 2010 6:35pm
lol you are confusing me further! If the stop is at the end of the IB then my statement that your additions are more likely to get stopped out still stands.

Say you open a position at 2pm GMT at 100, stop at 90.
Price rallies during the afternoon..
At 11pm GMT there's an IB so you decide to add to your position by placing an order on the break of 150, stop at 140, which fills.
Price then fluctuates randomly due to low liquidity and moves from 160 to 130 to 160 etc. thus stopping out your addition.
Your initial trade still exists and is in profit.

Given the above scenario, I still stand by the statement that adding to a trade using IBs in the dead periods are more likely to cost you money than make profit imo, but that is based purely on eyeballing and not on sound backtesting

Quoting razorboy
no, you do not use the pre existing stop. Every IB trade must stand n its own, with its own SL price, you just continue to add on as the trend continues.

My approach to trading IB's may be more Turtle-sque than PC's was...........


Once you have developed the ability to sit in a trade with a large profit and not panic out, but rather follow you plan for exiting the trade, then you know you have arrived
  • #9,514
  • Apr 14, 2010 7:17pm Apr 14, 2010 7:17pm
Matt,

I only trade IB's on daily charts, so I am more hypothesizing than anything else about H1 IB's - but as far as you statement being true, you would have to back that up with something more than your opinion - as you have indicated. It may be that for my trades any IB that forms on the 7th trading day of the month has a low probability of stopping out, but I haven't really bothered to look that hard

PC was pretty clear in that the london time frame had the highest probablility for the start of trends, but really left the whole idea of trend continuation up in the air.

Anyways.........time for a trade.........long g/u - 2 IB's in a row.....both were taken (by the elipse).........1/2 of each position has not been closed out - Each position is in the money by about 200 pips



Quoting MattW
lol you are confusing me further! If the stop is at the end of the IB then my statement that your additions are more likely to get stopped out still stands.

Say you open a position at 2pm GMT at 100, stop at 90.
Price rallies during the afternoon..
At 11pm GMT there's an IB so you decide to add to your position by placing an order on the break of 150, stop at 140, which fills.
Price then fluctuates randomly due to low liquidity and moves from 160 to 130 to 160 etc. thus stopping out your addition.
Your initial trade still exists and is in profit....
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  • #9,515
  • Apr 17, 2010 2:48pm Apr 17, 2010 2:48pm
Closed out this trade with about 600 pips of profit - 2 of the 5 positions stopped out for a gain of 0 and the end of day close broke thru the MA I was using for TP target

This was about a 5 to 6% gain for the account

Anyone who really wants to get their head around this stuff should read Covel's books



Quoting razorboy
up about 850 pips at this point........all risk free............5 positions.......depending on what happens tomorrow, may have set up to at a 6th position.......

Am also long the G/U off of the 2 IB's that formed on the 7th and 8th of april.......have decided to stop taking 1/2 the position off when the trade goes 1:1 as I have a feeling sound money management is more important here
  • #9,516
  • Apr 19, 2010 3:33pm Apr 19, 2010 3:33pm
I love this system I banked. 650 pips today on 3 trades would have mad about 300-400 on another but wasta round to set a trailing stop loss so missed out by the time I got back from work
I set trade this morning got me 64pips in 15 mins
What a great day just using simple old DIBS
Too bad I'm on demo account as I would have had a health bank balance today!
This month will be break even on my first month
Thank you J16 & Trader Dante
  • #9,517
  • Apr 19, 2010 5:18pm Apr 19, 2010 5:18pm
Quoting chartergas
I love this system I banked. 650 pips today on 3 trades would have mad about 300-400 on another but wasta round to set a trailing stop loss so missed out by the time I got back from work
I set trade this morning got me 64pips in 15 mins
What a great day just using simple old DIBS
Too bad I'm on demo account as I would have had a health bank balance today!
This month will be break even on my first month
It is never to bad to be on a demo account. You will understand this when you have a few losses in a row. That will be the first test, to see how you manage the losses and how many you can take and still stick around. And congrates on a good result for you first month. BE is a win in my books as you have allowed yourself an opportunity for results and are still in great shape heading towards month 2.

Razor
  • #9,518
  • Apr 20, 2010 6:35am Apr 20, 2010 6:35am
do yourself a favor before you get all wound up. Get a good understanding of the basics of trend trading, money management (your size needs to be a lot smaller than you think) and the importance of the concept of expected value. Learn to think in probabilities as it applies to trading




Quoting chartergas
I love this system I banked. 650 pips today on 3 trades would have mad about 300-400 on another but wasta round to set a trailing stop loss so missed out by the time I got back from work
I set trade this morning got me 64pips in 15 mins
What a great day just using simple old DIBS
Too bad I'm on demo account as I would have had a health bank balance today!
This month will be break even on my first month
  • #9,519
  • Apr 20, 2010 6:42pm Apr 20, 2010 6:42pm
Quoting PinMan
Hi All,

First post - but I thought I'd drop in to say how great this forum is. I've perused a lot of the posts in this forum, notably the posts by PeterCrowns, Bemac, TheRealThing, and RazorTrader. There's a lot of good sense in here. I've been successfully using IB trading for the last four years and I've seen an average 4x per annum growth on my account - I started out with £500 and used a spread bet platform rather than a broker (after initally getting hacked off with requotes), I'm not here to boast but I'll let you do the math! I've done...
Hi.
How did you managed to use 2% risk with 500£ with spread betting broker?
I cant find any brokers that offers smaller than 0.5-1.0£ per "point".
Or did you use larger initial risk with the 500£?

Did you use the same strategy as mentioned above? I am looking a better broker (no bucketshops, im sick of requotas) for trading long term DIBS, but with my limited initial deposit i can manage (500-1000eur) find it too risky. Thanks.
  • #9,520
  • Apr 21, 2010 4:09pm Apr 21, 2010 4:09pm
Quoting razorboy
do yourself a favor before you get all wound up. Get a good understanding of the basics of trend trading, money management (your size needs to be a lot smaller than you think) and the importance of the concept of expected value. Learn to think in probabilities as it applies to trading
yes I'm only trading the smallest lot size which is 0.01
I'm currently concentrating on recognition of "A" grade trades and also managing the trade whilst it is active ie trailing stop loss and BE points etc
I'm going to get right into the M.M. side of things because everyone has said how dam important it is!
so once i get all that nicely into sync things should hopefully go smoothly



I'm also finding that hedging the the trade can work out well too (not sure if that would technically make it a straddle trade?)

But for example if will set trades each way and find the morning session might make me 1-300 pips and then the afternoon tumbles down to net some more on the down side I haven't done extensive back test on that but over the last couple of weeks I have noticed it and have had some success

anyone else playing it like that too??
Thank you J16 & Trader Dante
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