The DIBS method is one of the most reliable “unknown” methods available for Forex trading. Profitable forex strategies are rare, but they do occur. This strategy was developed by a professional American trader Peter Crowns. He worked in the New York Stock Exchange pit for 8 years, then 9 years at the same stock exchange from the office, and then moved to Forex. In 2008, Peter appeared at the largest American forum, where he drew special attention to the fact that he revealed some secrets of exchange trading.
The essence of his method:
- Be prepared to buy if the market is above the opening of the day.
- Be ready to sell if the market is below the opening of the day.
In fact, this means that you never sell if the price is higher than yesterday’s close and you do not buy if the price is lower than yesterday’s close. The fact is that the market moves in some direction most of the time, and reversals happen much less frequently. If you follow these rules, then small losses on reversals are compensated by a large profit in trends.
Peter Crows has come up with a very simple technique for applying these rules. Daily IBar Setup (DIBS) is what he called his strategy. To calculate the start of the day, the time of 6:00 GMT is applied. The strategy works on all timeframes. Weekly and monthly schedules should also be taken into account. Peter Crounce himself trades on H1, but he says that the strategy is not worthy of attention if it works only on one timeframe. Trading on M30 and M15 timeframes gives you more opportunities to enter, although smaller volumes of profit. Timeframe H4 is more suitable for medium-term trading
What is Inside Bar?
A bar with an upper level that is lower than the previous one and a lower level that is higher than the previous one. A stricter definition for DIBS trading is that IB cannot exceed the boundaries of the previous bar. This means that the top and/or base can be equal to the previous bar. All we have to do is wait for this bar to appear and open a position of 2 conditional lots. Take Profit and Stop Loss are set to the size of the inside bar. When the profit is reached, 1 lot is closed and the second one is trailing stop.
The best time to trade is the first 6-9 hours of operating time. It also depends on the couple being traded. For example, the best time for a Japanese yen is from 00:00 GMT. The author applies the strategy for the main pairs – USD/JPY, USD/CHF, EUR/USD, GBP/USD. But she can work for any couple. We only need to analyze the spread relative to the size of the internal bar.
An example of a successful login. The full size of the candle or bar is taken into account
An example of a sales transaction. With an internal bar of about 10 points, the price has passed 50 points. Different indicators can be used for additional filtering of signals. In this case, the maximum and minimum day levels and the MACD trigger are applied.