DIBS Method Strategy on Forex
The intrigue speculation is the most popular type of trading on Forex, despite the difficulties traders face when trading inside the day. If you are interested in trading at high speed, it is better to prepare carefully to do everything competently. In this article we will reveal the secrets of one new but promising free forex strategies that work - DIBS Method.
Based on the advice of experienced traders, this approach is recommended for the most frequently used European currencies, including EUR/USD, GBP/USD and USD/CHF. The main system-wide signal for the start of trade begins at 6 a.m. GMT. It turns out that the stage of trade at the Asian session should not concern you in any way.
As mentioned above, the signal should be searched only later than 6:00 GMT. During the preparatory phase, it will be necessary to properly calculate the time. There are specialized resources available to help you deal with this problem.
For example, you visit the site found, see the current time in GMT. All you have to do is compare it to the time on the terminal clock. For the sample, take a company whose location belongs to the Moscow time zone, so we get a difference of 3 hours, so customers in front of the terminal should be at 9:00 am on the ICS.
At the following stage during the work on the strategy of DIBS Method on Forex it is necessary to create primary, main marking. It involves the construction of a single, so-called "zero" line. Which runs through the opening price of a primary "session" Japanese candle emerging at 6:00 GMT.
After such careful preparation, you can deploy the timeframe for a period of 1 hour and start monitoring the market. If the price is above the calculated zero line, it is a reliable indicator of good chances of moving the asset up. If the cost falls below the line you set, you must wait for a subsequent fall. This example will be the first filter, one of the important elements of the signal.
Directly, the operations for opening warrants will be opened after the formation of the situation of the so-called Price Action pattern "Inside Bar." It is a combination in which the candles are arranged in such a way that the first bar, being the main bar, completely absorbs the following bar.
When Inside Bar comes on the market, the seller will need to anticipate further developments and then stay on the trend for as long as possible. If, for example, quotations are above the zero mark, you must open purchase transactions. If the quotations are below the starting point of the count, a sales warrant is established.
In addition, when trading in accordance with the rules of the DIBS Method strategy, entry into the market is carried out by opening 3 equilibrium orders, which will have the same setting of stop loss. Teak-profit at these positions is specified according to the following scheme: when the teak-profit of the first and then the second warrants close, it is necessary to trailer the last warrant. Moving the stop loss of this item will require a simple moving average calculated over a period of 20 candles.
Another requirement called Hot Hand should be taken into account, which states that trade should only take place at a time of sustained price movement. It can be found that there are movements in the market as follows. The D1 timeframe opens, adding a moving average for a period of 20 candles. The price should be above or below this line, however, in no way on it. It should be noted that this average should have a slope, because this fact is a prerequisite for possible cost correction.
The above-described scheme of work is criticized by many, but it is considered to be the most profitable free forex strategies that work showing the best trading results in the market.
Let 's summarize: within the framework of the considered methodology you should first define the general direction, after which trade on the sample Inside Bar (internal bar). In principle, even an inexperienced trader is able to independently study DIBS Method 's strategy on Forex, which is inherently elementary.
Nor should we forget the principles of mani management. The volume of stop losses when opening three warrants at once should not exceed 0.3% of the original capital. In addition, it is mandatory to observe that Inside Bar is not too elongated, because in such a case the meaning of the pattern will be lost.
The basic version of the system is designed so that its operation does not take into account larger time schedules. But it is irrelevant in flats, so active traders have come up with an additional filter - tracking the direction of the SMA indicator.
Since the DIBS Method strategy is quite easy to use, it is decided not to complicate it by imposing additional restrictions. Thus, the period of the moving average set on the D1 remains the same, that is, equal to 20 candles.
The filter described is easy to use. Only trend markets will be taken into account, because movements are quite obvious, and price variability remains stable.
Advantages and disadvantages of DIBS Method
Low risks, which include only the volume of 3 stop losses;
Possible profits that exceed risks by thirty times;
availability of application.
The strategy considered also has shortcomings:
For a long time it is necessary to monitor the opening of warrants;
The bidding takes place exclusively during American or London trading sessions;
Entry into the market is possible a small number of times, because opening deals is possible only if the situation of the pattern "Internal bar" appeared on the market.