Bob Volman Price Action Scalping

[samich1262]

1/ DD - I can't really complain that it didn't go my way if you look at the point from which the trend initiated, was I supposed to even trade this? I am losing most pips on DD setups because it's so easy to see them everywhere. I have to learn to pass on most of them.

2/ RB - This setup also looks a little akward, but because the price was moving up and down all day and this setup is on the upper side of the chart, I felt like taking it. High odds or not?

1. Hmm, looks ok... I have skipped a lot of DDs that don't have significant compression, but I looked at the book and it probably looks ok. Might have been able to lower your tipping point a pip or two to match that FB to the upside, but that's kinda up to you.

2. I feel weird about breaks like that with the blocky action to the left. I'm avoiding them for now.

 

[shotgun77]

I am interested in what you do outside the chart that helps you trade better, how do you keep your focus

I find meditation very helpful to sharpen my focus but I don't do it while trading. Focus is a skill and you can train you mind to do it better. Mark Douglas said something about discipline is bringing your mind back to where it needs to be once it wanders.

what kind of activities do you do throughout the trading session?

I don't try to stay on "high alert" throughout because that would be exhausting. So I go on alert only when I see fav conditions and a good setup building. In a slow market, it's going to be boring. I focus on not overtrading then. Sometimes I'll draw on chart where the smart buyers and sellers are just waiting and waiting for price to get to them. So I can sit on hands and "stand down" until price reaches an area where I anticipate the really patient traders are. But in slow markets, I can still see what I want to see and despite everything, overtrade. Volman says know when not to trade but knowing and doing don't always mesh for me.

Page 157-158 describes the step-wise shift in power. I look for signs on the chart that shows one side is trying to convince the other side to join them. I find this exercise very engaging and keeps my attention except in very slow, tight markets where there is no conviction by either side.

 

[samich1262]

That's good advice. I am similar, sometimes I do something else and just check the chart every minute or so when there's not much activity or I don't see the potential for a setup immediately. I play a lot of guitar, so sometimes I practice my guitar scales and exercises in front of the chart to keep myself from getting bored, yet I've still got my eye on it the whole time. If something starts to form or the pace picks up, I shift my complete attention back to the chart. Sometimes talk radio helps too. TV doesn't bother me but it could distract some people. As long as I'm still in front of the computer, I pay more attention to the chart than anything else I'm doing, so it doesn't bother me.

 

[shotgun77]

Man, I cannot win a BB unless it's either trending, or inside the barrier as part of an RB. I am not sure if this was the right decision.

I'm looking at your chart in hindsight so have that bias.
You can't argue with the bullish pressure -- the prior DT pullback between 9:48 and 10:00 failed for the shorts and 2 successive higher lows at 9:48 and 10:00.

BBs can form anywhere but I find them more probable as a horizontal pull-back in a strong recent trend for a continuation trade of that trend or at the end of the pullback in the EMA in a trend. They can also be a range trade as an IRB-BB in any of its 3 types: boomerang, break-out, wide range trend leg to barrier.

Looking at your chart, I'd be more inclined to call the box an ARB of the cluster type. The thing that would concern me is the number of bars. In the book's example of this type, it usually shows 4-8 bars. Your box has more than that.

Just my .02 cents.

 

[samich1262]

Hmm interesting. I didn't notice the # of bars. I was just going back through last week's chart and saw this scenario work out, but it had a supporting BB from an IRB right under it.

I like BBs in a trend or pullback that have some support underneath them. I find those to be pretty high probability trades. I'm not too good at the IRB BBs yet unless it's really obvious.

 

[shotgun77]

Re: SB and BB win rate/probability:

I looked at my stats. My win rate on SBs is 42% but it's a low sample. When I looked at the reason recorded for an SB loss, I usually find I didn't have a "legit" SB setup/conditions. So in theory, my win rate is low because I'm doing a poor job of trading them. I agree with others that SBs should be one of the highest probability trades you can take.

My win rate on BBs is 53%. I take a lot of them. When I look at the reason recorded for the wins, it's hard to find a common factor. But strength of trend is one of them and how fast the market is moving or starts to move is another. Main reason for losses is support/resistance nearby that held that I expected to break due to pressure build-up.

Do you all use a tick count down indicator? I find that very useful. I can watch the count down to see how fast it is counting down and also how near to the end before bar completes.

 

[samich1262]

I do use the tick countdown indicator. I'm pretty good with BBs in a trend, DDs and basic RBs. The only ARB that I feel comfortable with is as a DD retest, and maybe as a BB breaking from inside the range. Other than that, still trying to figure out IRBs and the other ARB setups.

 

[johnwolf]

Thanks John! So do you only take SBs that have a double bottom to the pip, or can the lows be 1 or 2 pip apart? You're looking for a rather pronounced W pattern rather than a quick FB to the upside then?

No, I don't require a retest to the pip. I'm just looking for a micro double-top/bottom and evidence that the second leg has stopped pulling back. Perhaps I'm not trading the SB as Bob describes it. But the one he shows on page 86 is what I'm looking for.

I never computed the number of each type of trade I take, but I would guess a large percentage are SBs. If the pullback context is not ideal or there is clustering to the left, I wait for an SB. I figure if the countertrend traders fail twice they are more likely to give in.

John

 

[johnwolf]

I use a tick counter and wouldn't be without it. It good to know when the bar is about to close.

The only IRB I'll take is the boomerang style at trading range extremes. I see potential there, and they are a focus of mine now. I have little confidence in the other IRBs at this point.

John

 

[samich1262]

Yeah, I like those. Still working on them but I do look for boomerangs. I do like the BB style breakouts after a significant double or triple bottom. But it has to be rather pronounced bottoms so larger timeframes would notice them. Otherwise I see those as much more likely to fail.

 

[samich1262]

Hmm. Looking back at that BB I took earlier, I think I should've entered earlier, when a BB formed inside the range, right before the one that I took. If I had taken it there, I should've been able to get out for a 2 or 3 pip gain once it pulled back off that double top. Other than that, I really didn't see too much today that wasn't aggressive.

 

[uberteh]

Might be a bit off topic but..seems like my data feed based on 5 digits and even more, spoting setups is very hard, I checked pro real..and it costs ~500$ a year, is that correct ? Maybe there is cheaper options for 4 digits tick data ?

 

[samich1262]

I'm not sure, I'm basically using a trial account right now. Had trouble finding other cheap tick chart packages that were accurate though.

 

[johnwolf]

I am interested in what you do outside the chart that helps you trade better, how do you keep your focus, fight boredom, what kind of activities do you do throughout the trading session?

I read trading books (mostly Volman and Brooks) and make notes on them. I also play guitar.

And I've got one of these steppers. I mainly traded trend setups, so when the market goes sideways I jump on the stepper with some dumbells, while keeping an eye on the monitors. In addition to the exercise, it's nice to step back and view the charts from a more distant perspective.

John

 

[samich1262]

I read trading books (mostly Volman and Brooks) and make notes on them. I also play guitar.

And I've got one of these steppers. I mainly traded trend setups, so when the market goes sideways I jump on the stepper with some dumbells, while keeping an eye on the monitors. In addition to the exercise, it's nice to step back and view the charts from a more distant perspective.

John

Hey John, do you ever use Brooks's 5m methods too, or just the Volman method? I was curious to see how the methods compared.

 

[cha-ching]

My first trade today was a FB. Looking back I found that the pullback wasn't good enough, but I welcome comments from you guys if there's anything else wrong with this FB.

On the other hand I did not manage the trade well. If I had walked away from my computer without moving the stop, I could've pocketed 10 pip. So my questions for you:

1) Do you move 10 pip stop to the ultimate tipping point right after you place the order?

2) After that do you move the stop on your broker's platform at all, or just mentally prepare to close it when price reaches your mental stop? What about TP?

3) Do you mark your entry, SL, TP lines on your charting software? If I had done so I would not have moved my stop 5 pip higher. For a moment I took the UTP I drew as my entry, so I thought to myself why not move SL to breakeven + 5 pip, when it actually was just BE + 1. Or if I had moved my stop on my broker's platform I would've noticed that visually without a problem. Instead, I did the dumbest thing by clicking on the order and typed in the actual price level. I guess I did this because I have the OCD of not willing to see fractional pip in my SL...

I appreciate your help. I found this thread a great one with a very high signal-to-noise ratio.

 

[BLS]

My first trade today was a FB. Looking back I found that the pullback wasn't good enough, but I welcome comments from you guys if there's anything else wrong with this FB.

It doesn't seem like much of an FB. For FBs price usually moves by quite a bit and pulls back about 40-60% of the trend move. There's also some resistance to the left about the 1.3018 level that I was worried about.

On the other hand I did not manage the trade well. If I had walked away from my computer without moving the stop, I could've pocketed 10 pip. So my questions for you:

1) Do you move 10 pip stop to the ultimate tipping point right after you place the order?

I'm not quite sure what you mean. The 10 pip stop is for the worst case scenario, i.e. prices just move against you really quickly before you can react. Normally you use the tipping point as your stop from the moment of entry.

2) After that do you move the stop on your broker's platform at all, or just mentally prepare to close it when price reaches your mental stop? What about TP?

No. Bob says there's the issue of how many pippettes to use for tipping points to avoid getting stopped out on your trading platform when the ProRealTime chart doesn't show a stop out; it's just gets confusing. The tipping point is a mental stop. TP should not be touched though I've closed out early without using the tipping point many times before (I'm still learning).

3) Do you mark your entry, SL, TP lines on your charting software? If I had done so I would not have moved my stop 5 pip higher. For a moment I took the UTP I drew as my entry, so I thought to myself why not move SL to breakeven + 5 pip, when it actually was just BE + 1. Or if I had moved my stop on my broker's platform I would've noticed that visually without a problem. Instead, I did the dumbest thing by clicking on the order and typed in the actual price level. I guess I did this because I have the OCD of not willing to see fractional pip in my SL...

I only mark the tipping point lines on the charting software, I don't mark the profit target.

 

[BLS]

I think I may have been chasing prices for E2. I'm getting a bit frustrated.

 

[stehlikpetrmsncom]

I think I may have been chasing prices for E2. I'm getting a bit frustrated.

I messed up E3 in the exact same way :-( After a string of losers I wanted to protect my trade so much I ended up ruining it. It's funny though, one tiny little pip to the downside can mean the differnce between profitable and losing day, even a week (in my case).

I'll just add my RB that doesn't look like much at first glance, but the round number and no support below the barrier were beautiful.

 

[cha-ching]

It doesn't seem like much of an FB. For FBs price usually moves by quite a bit and pulls back about 40-60% of the trend move. There's also some resistance to the left about the 1.3018 level that I was worried about.

Thanks.

I'm not quite sure what you mean. The 10 pip stop is for the worst case scenario, i.e. prices just move against you really quickly before you can react. Normally you use the tipping point as your stop from the moment of entry.

I set up my order button in one-click mode with default TP = 10 pip and SL = 9 pip (b/c of 1 pip spread from OANDA). So most of the time I'll need to move SL to the tipping point right away.

Do you mean you change the default SL every time before you enter a trade? I'm not experienced to do it fast enough at this moment. Many times when I spot a trade I don't have enough time to type in tipping point as SL before I place the order.

No. Bob says there's the issue of how many pippettes to use for tipping points to avoid getting stopped out on your trading platform when the ProRealTime chart doesn't show a stop out; it's just gets confusing. The tipping point is a mental stop. TP should not be touched though I've closed out early without using the tipping point many times before (I'm still learning).

I only mark the tipping point lines on the charting software, I don't mark the profit target.

This is where I got a little confused: I understand Bob's point is to focus on the trade itself rather than P/L. So do you mark the tipping point lines during the trade or after? When price progresses, are you (and should you be) aware of how far away price is from profit target as well as current mental stop? Do you (should you) check the actual entry price level? If you don't mark the profit target do you know exactly where it is on the chart? Or you rely on some sound alert from the broker to notify you that trade's been closed so that you can relax?