Dibs Trading System For MT4
Table Of Contents:
- Dibs Trading System For MT4
- The Dibs Trading System For MT4 – Long positions
- The Dibs Trading System For MT4 – Short positions
- Is the Dibs Trading System For MT4 effective for trading forex?
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Dibs Trading System For MT4 is a forex strategy that makes use of moving averages and momentum. However, this trading system is basically applied for trading only on the short term charts. The name Dibs comes from the fact that it is a daily inside bar trading system.
Thus, besides the moving averages and the momentum indicator, there is also a bit of price action involved. Traders might know that an inside bar is a candlestick or a bar pattern. When an inside bar is formed, the high and the low usually engulf the previous session's high and low. This inside bar can often signal a breakout in the next or the next few sessions.
What this means is that the Dibs trading system makes use of the inside bar formed on the daily chart time frame and then signals you to trade on the short term charts. This is a great way to take into account multiple chart time frames. But we should note that the inside bar pattern that forms, is usually taken from the current session.
Therefore, traders should constantly look to the daily chart time frame before trading to ensure whether or not an inside bar pattern is formed.
There aren't that many indicators used in the Dibs trading system. The first indicator is called the DIBS indicator. As the name suggests this indicator forms the basis for the trading. However, the indicator does not do much. In fact, if you check the settings, the only thing you will find is some basic information such as displaying the inside bar, the daily open line and showing the remaining time on the current session. The Dibs indicator by default sets the inside bar alert to false. You can change this and the inside bars formed on the current chart time frame show up in yellow.
The next indicator on the Dibs trading system is the moving average. This trading system makes use of the 200-period simple moving average. This is the pink line that you see on the price chart. The moving average indicator serves the purpose of acting as a trend filter. This means that you will only take short positions when price is below the 200 period moving average and take only long trades when price is above the 200 period moving average.
Finally, on the price chart, we have the H Afor indicator. This indicator is responsible for color the bar charts on the price. When the trend is down, the H Afor indicator colors the prices to blue and when prices are moving up, it colors the bars to green. The H Afor indicator is basically a modified Heiken Ashi indicator.
In the sub window of the Dibs trading system, we have the CCI indicator. Unlike the traditional CCI indicator, this modified version plots histograms. However, it oscillates between the +100 and -100 levels. Buy and sell signals can be confirmed depending on how the CCI indicator is positioned. The above indicators combined together form the Dibs trading system. Let's now take a look at how we can trade long and short positions in this trading system.
The Dibs Trading System For MT4 – Long positions
To take long positions using the Dibs trading system, we first start with the daily chart time frame. Ideally, you should trade when there is an inside bar formed on the daily chart. Following this, you should then shift to the five minute chart time frame for trading.
Depending on where price is, we will take long positions only if price is trading above the 200 period moving average on the five minute chart. Following this, look for the CCI indicator to turn above zero. This will signal that the momentum is to the upside. By this time, the price bars will also turn green, confirming the uptrend.
Now take a long position at market. Set the stop loss to the recent swing low that you see before taking the long entry. For take profit, calculate the risk for a 1:3 risk to reward set up. Alternately, close out your position before the end of day.
The Dibs Trading System For MT4 – Short positions
To take short positions using the Dibs trading system, we first start with the daily chart time frame. Ideally, you should trade when there is an inside bar formed on the daily chart. Following this, you should then shift to the five minute chart time frame for trading.
Depending on where price is, we will take short positions only if price is trading below the 200 period moving average on the five minute chart. Following this, look for the CCI indicator to turn below zero. This will signal that the momentum is downside. By this time, the price bars will also turn blue, confirming the downtrend.
Now take a short position at market. Set the stop loss to the recent swing high that you see before taking the short entry. For take profit, calculate the risk for a 1:3 risk to reward set up. Alternately, close out your position before the end of day.
Is the Dibs Trading System For MT4 effective for trading forex?
In conclusion, the Dibs trading system is a rather simple but an effective forex trading system. Due to the fact that it includes both trading with indicators and price action as well, it is a very good way to trade as it accounts for all aspects.
Traders who wish to get acquainted with how to trade with price action and indicators can find the Dibs trading system to be a very good trading system to begin with. Even beginners can also easily start trading with the Dibs trading system.
The low number of indicators, yet correctly used indicators makes the template in the Dibs trading system to be quite light weight. This means that you can use the trading template from this trading strategy to monitor multiple charts and instruments at the same time.
The Dibs trading system is a good trading system for the sheer fact that it includes trading with indicators, price action and also multiple time frames. Experienced traders can simply expand on this basic trading system to add more value to their trading strategies.
Because the Dibs trading system is a mix of both indicators and price action, you can make profitable trades in both trending and ranging markets.
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