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The DIBS Method... No Free Lunch continues

  • #10,361
  • May 12, 2013 4:37pm May 12, 2013 4:37pm
Quoting smikester
{quote} My point was only to say to let your winners run and risk the absolute minimum. For example, I am running a test at the moment on a strategy which is a hybrid of DIBs and the win rate is <50% but:{image} and {image}
smart thinking smike... i'm with you totally, I never fear a loser anymore cause my R/R is so favourable, all that partial closing, moving stops up early... really not worth it, trade all the set ups and let them run to a decent R/R... 3/1 minimum, absolutely minimum.

Also you start to notice those trades you're sitting in at 2/1 R/R that you would of normally closed, all of a sudden jump to 4/1, 7/1 and more....

Probably one of the hardest lessons to learn but can turn most simple and sound strategies from slowly liquidating your account to steadily growing it.

There is some data to back this thinking up too, I would dig it out if anyone wishes...
tradewith60
  • #10,362
  • May 12, 2013 6:24pm May 12, 2013 6:24pm
Quoting dustbin
{quote} Its still going! More Thanks PC! This trade is now over 10% account growth. I don't believe my eyes... But I do... {image}
Hm.. If 300 pips make you Account grow over 10 % arent you risking a little bit to much ?? :nerd:
How to opt out annoying user signatures ??
  • #10,363
  • May 13, 2013 1:58pm May 13, 2013 1:58pm
Quoting 60minuteman
{quote} smart thinking smike... i'm with you totally, I never fear a loser anymore cause my R/R is so favourable, all that partial closing, moving stops up early... really not worth it, trade all the set ups and let them run to a decent R/R... 3/1 minimum, absolutely minimum. Also you start to notice those trades you're sitting in at 2/1 R/R that you would of normally closed, all of a sudden jump to 4/1, 7/1 and more.... Probably one of the hardest lessons to learn but can turn most simple and sound strategies from slowly liquidating your account...
Hi 60,

If you could dig it up that would be great, i tried to pm you but you have them switched off...

many thanks
Grant
  • #10,364
  • May 13, 2013 2:08pm May 13, 2013 2:08pm
Quoting grant18265
{quote} Hi 60, If you could dig it up that would be great, i tried to pm you but you have them switched off... many thanks Grant
http://www.nobrainertrades.com/2010/...placement.html
tradewith60
  • #10,365
  • May 13, 2013 2:20pm May 13, 2013 2:20pm
Quoting 60minuteman
{quote} http://www.nobrainertrades.com/2010/...placement.html
I'm not making any statement about DIBS method here, I'm just making the point that the optimum TP/ R/R on simple price action strategies can be very high and very different to the all too common 1/1 2/1 TP...

And I have found it to be true with my trading too.
tradewith60
  • #10,366
  • May 14, 2013 3:07am May 14, 2013 3:07am
Thanks for the link 60, much appreciated
  • #10,367
  • May 14, 2013 8:09am May 14, 2013 8:09am
That article was a nice read, 60. Of course, dynamic exits are an alternative to continual manual optimization of stops and takeprofits (one of the commenters there mentions this).

The author also touches on diversification--in terms of trading multiple strategies. A related idea is diversification in terms of trading multiple pairs. I haven't understood either of these concepts for years. If your best performing strategy running on your best performing pair are subject to random explosion, then wouldn't adding 4 more strategies and pairs to the mix simply make things worse?
An ounce of profitable logic is worth a pound of efficient code.
  • #10,368
  • May 14, 2013 4:55pm May 14, 2013 4:55pm
Quoting Toranaga
{quote} Hm.. If 300 pips make you Account grow over 10 % arent you risking a little bit to much ?? :nerd:
It depends how you call it. If you have an initial trade and run your profits and keep adding on with repeat signals it's very easy to turn 1R into 300 plus... Hope I'm not stating the obvious... probably am!
  • #10,369
  • May 14, 2013 6:18pm May 14, 2013 6:18pm
Quoting RJo
That article was a nice read, 60. Of course, dynamic exits are an alternative to continual manual optimization of stops and takeprofits (one of the commenters there mentions this). The author also touches on diversification--in terms of trading multiple strategies. A related idea is diversification in terms of trading multiple pairs. I haven't understood either of these concepts for years. If your best performing strategy running on your best performing pair are subject to random explosion, then wouldn't adding 4 more strategies and pairs to the...
I think he is referring to having a rangebound strategy, a breakout strategy, a trend following strategy... etc etc..

I believe dynamic exits are the best too, but they're not simple and they have to take account of where the move is coming from and from what timeframe...

For instance, if you know an entry signal against you current trade is just a retrace trade then you should really hedge your position until you get the continuation signal.... whereas if the entry signal is at a higher timeframe S/R and therefore a likely reversal point then you should close your existing trade and open a new trade in the opposite direction.

Not at all easy, but a thing of beauty when you pull either off..... but again, as I have come to realize, a good strategy will still always work if you just play the numbers game...i.e take every signal and insure you only close when the necessary R/R is achieved.
tradewith60
  • #10,370
  • Edited 12:09pm May 15, 2013 1:22am | Edited 12:09pm
Quoting 60minuteman
I think he is referring to having a rangebound strategy, a breakout strategy, a trend following strategy... etc etc..
Ah... 5 strategies, but trading only one strategy at a time as appropriate for current market conditions, or trading all 5 strategies simultaneously while each strategy is assigned to its own pair. I see a reread in my future.

Quoting 60minuteman
I believe dynamic exits are the best too, but they're not simple and they have to take account of where the move is coming from and from what timeframe...
Yeah, I suppose the real challenge is to define "dynamic." For stoploss, I like swing highs and lows on a 50 pip range bar chart--basically, point 0 or 2 in a 1-2-3 pattern. For takeprofit, I simply wait for a 1-2-3 reversal appearance. This method involves manually trailing as new 1-2-3's appear. Regardless, the takeprofit/potential takeprofit generally grossly exceeds the shrinking stoploss, so R/R is still relevant.
An ounce of profitable logic is worth a pound of efficient code.
  • #10,371
  • May 19, 2013 10:06am May 19, 2013 10:06am
hi im new in this thread

i have a question about the method do we just trade all inside bar which form v reversal?as i know this is a high-prob rev

just my first try,please let me know if im doing wrong

Attached Image



thanks
  • #10,372
  • May 20, 2013 1:56pm May 20, 2013 1:56pm
Quoting ariftakh1
hi im new in this thread i have a question about the method do we just trade all inside bar which form v reversal?as i know this is a high-prob rev just my first try,please let me know if im doing wrong {image} thanks
Mate - wrong, you need to do some work. That may be a strategy but not this strategy. Read the thread properly and preferably read Peter Crown's posts. I realise English is not you first language but you are gonna have to do the work.
Gone to a better place
  • #10,373
  • May 22, 2013 1:38pm May 22, 2013 1:38pm
thanks smikester
sometimes its difficult to communicate with english

this is today gbp/usd on h1 chart

[IMAGE]

gonna do some more
Attached Image
  • #10,374
  • May 25, 2013 3:05am May 25, 2013 3:05am
Quoting 60minuteman
{quote} I'm not making any statement about DIBS method here, I'm just making the point that the optimum TP/ R/R on simple price action strategies can be very high and very different to the all too common 1/1 2/1 TP... And I have found it to be true with my trading too.
Thanks for posting that link 60minuteman. It's an interesting coincidence that I have also recently been using 1, 3 and 10 as my multiples when judging R : R ratios in back testing and getting similar results. Simply put, if you were to only accept 10 : 1 R : R you would still make a better profit than taking 1 : 1 when it is available - just having to live with hating to lose more trades. I am now working on methods of moving stops to near those pre-defined profit levels so that there is potential for the trade to run further but words keep ringing in my ears which were; "Why move your stops or take profit at all? Once an H1 trade has reached daily, or even weekly, management status, we should be looking for much higher multiples and using those major S/R levels as our guide."

Not easy, psychologically, but then neither was getting those shorter runs to begin with.
Gone to a better place
  • #10,375
  • May 26, 2013 6:24am May 26, 2013 6:24am
Quoting smikester
{quote}Thanks for posting that link 60minuteman. It's an interesting coincidence that I have also recently been using 1, 3 and 10 as my multiples when judging R : R ratios in back testing and getting similar results. Simply put, if you were to only accept 10 : 1 R : R you would still make a better profit than taking 1 : 1 when it is available - just having to live with hating to lose more trades. I am now working on methods of moving stops to near those pre-defined profit levels so that there is potential for the trade to run further but words keep...
The key is to use the power of scale. it's something I have been working on the last 3 months...

For DIBS it would require waiting for Weekly to turn and then entering with H1 (obviously different combinations would work, some would have better win rates but less R potential)

here's a rough example, it's a basic version of my current trading but I use H4 and M15.... if daily and weekly agree then even better
Attached Image (click to enlarge)
Click to Enlarge Name: Screen shot 2013-05-26 at 12.20.49.jpg Size: 321 KB
tradewith60
  • #10,376
  • May 26, 2013 6:39am May 26, 2013 6:39am
Quoting smikester
{quote}Thanks for posting that link 60minuteman. It's an interesting coincidence that I have also recently been using 1, 3 and 10 as my multiples when judging R : R ratios in back testing and getting similar results. Simply put, if you were to only accept 10 : 1 R : R you would still make a better profit than taking 1 : 1 when it is available - just having to live with hating to lose more trades. I am now working on methods of moving stops to near those pre-defined profit levels so that there is potential for the trade to run further but words keep...
I would avoid getting too bogged down in trying to max R levels out too much,

If you can average above 3R with a 50% win rate you can trade big chunks of capital and never blow up your account.....

All depends on what you want to achieve I guess..
tradewith60
  • #10,377
  • Edited 3:55pm May 26, 2013 2:57pm | Edited 3:55pm
Quoting krmo
Hi All, This still is a viable method. Here are two trades from last night on the EURUSD and USDCHF 30 minute. (I prefer the 30 over the 1 hour). Both hit a 5 to 1 R/R !!! {image} {image} Money Management: I read a few pages back some more posts on stops, trailing stops and profit taking. My personal method is as follows: I enter with 4 Units = .5% each unit, of my account. (typical on all my trades) I take 2 off at 1:1 for a "free trade". In the examples above it hit 2:1 before taking the first 2 off!!! (that is icing on the cake, profit locked...
hello krmo, i see your post on Dibbs page 511, i like your set up chart it is clean and makes good sense having 1:1, 2:1 plot on chart for easy reading. Is the template a script or indicator that can be shared? i use math to make lines on my chart maybe your template will help with me! i enjoy this forum and glad to see active on Dibbs

maybe the lines are fibs?
  • #10,378
  • May 27, 2013 3:07am May 27, 2013 3:07am
Quoting irabaj
{quote} hello krmo, i see your post on Dibbs page 511, i like your set up chart it is clean and makes good sense having 1:1, 2:1 plot on chart for easy reading. Is the template a script or indicator that can be shared? i use math to make lines on my chart maybe your template will help with me! i enjoy this forum and glad to see active on Dibbs maybe the lines are fibs?
It is a modified fib tool. You can find lots of examples in FF. Just do a search.
Gone to a better place
  • #10,379
  • May 27, 2013 4:59am May 27, 2013 4:59am
Hi folks,
Have just discovered this thread and DIBS.
Easy to follow and I am giving it a try but can someone tell me the best/easiest way to determine the "strongest/weakest" pairs as PC suggested he does.
Appreciate any help.
  • #10,380
  • May 27, 2013 5:12am May 27, 2013 5:12am
Trading the "hot hand": Trading the strongest/weakest market is actually really simple. For example, yesterday the Eur/Usd was up more proportionately than the Usd/Chf was down. This was because the Usd/Chf wasn't even a down day. Definitely off its highs but not down relative to last week's close. The Eur/Usd was up, up and away! So that is the market you buy.

And I did! I'm sure I had company from this group.

In the pit the first thing you learn--- when you are ready to actually make money..., and stop the bleeding, is:

  1. Only be willing to buy a market if it is up on the day.
  2. Only be willing to sell a market if it is down on the day.


Obviously, it would logically follow that the currencies which are up more are better buys and the ones down more are the better shorts. So basically, if you get a buy setup forming on two strong currencies, take the trade on the one up most on the day.

This actually means that you never go short a currency unless it is "down" relative to yesterday's close; or go long for any reason unless the market is "up" on the day.

Review for yourself how many large losses you could've eliminated from your past trades if you followed these rules. At the same time, I am certain you would have eliminated very few of your biggest winners by doing this.

Think about this for a while. I have for decades. The power of this simple concept still amazes me.

I'm sure this sounds simplistic to everyone, and maybe this stuff is obvious to you all, but I doubt it. How many times do you find yourself buying a weaker currency instead of the stronger one, thinking that the weaker one "has" to catch up, or the stronger one has already moved as much as it is likely to already.

Always buy setups in the strongest daily markets, always take sell orders in the weakest daily markets.

And yes, I have come up with very simple methods to exploit this. Breakouts of inside bars on hourly charts is one very useable technique I use a lot. Pennants of various constructions work very well too. Once you know which markets to trade, and in which directions--- it is a pretty simple job.

After all, trading is just risk control. Unfortunately it can take a while for us to learn to use the simple tools we have available.

Can anyone help please?
I do not really know how to work out the strongest and weakest on the day.
Anyone got an easy way of working it out.

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