Bob Volman Price Action Scalping

[BLS]

No trades for me today. I spotted a potential RB but decided to skip it because I wasn't comfortable trading it.

 

[shotgun77]

Ended up having a really bad day:

In your first chart, do you think that angular line break was too high up from the low of the pullback?

In most of Bob's charts where he shows an angular line, its break is coming at the low of the pullback for longs. In a few, it is not the exact low but a slightly higher low. In yours, you have the low, then a higher low, then the BB and its break with the angular line. Perhaps that is significant?

If you used a different placement for the angular line, you'd get a break at that little block right at the end of the pullback. Which corresponds with a false break below your barrier line so now you have multiple reasons for an entry:
false break trapping shorts
break of the angular line if started at the last swing high
a tiny block formation with 3 equal highs that holds support at a prior confirmed support area (your barrier line)
Further, notice no false breaks to the upside in that pullback so no bulls have been whipsawed and are still on the sidelines waiting to get in

Despite all this, from your 2nd chart it looks like an aggressive tipping pt mgm would have had you exit without reaching target.

As for the angular pullback on your 2nd chart, I echo what others see. Not enough range in the bars. Your entry looks like it could be a DD but with the doji bars the same size as the pullback bars, nothing of interest to sideliners. They won't see the "breakout". The pullback may have appeared at the time of entry to have stopped at the ema. But I'd want a test of the breakout of the 20 level.

What you got instead was 2 false upside breaks. So bulls are not showing strength despite the prior 2 strong bull trend bars. That'd make me cautious. You might would take the little BB that built at the 1.282 level and is shown on BLS chart. And looks like that failed too -- like most ARBs seem to that are too drawn out.

 

[cha-ching]

@cha-ching
Nice job on the retracement.pdf

Thanks. I haven't got enough time to review Bob's charts until recently. I have been studying one subject at a time from those charts to catch up. It's quite basic and is probably well-known to most of you guys but I found it helpful for me to put things together, and now I feel that I have a much better understanding.

Here's another one.

 

[vanica]

Thanks a lot for sharing cha-ching. Very useful material.
Shotgun, thank you for comments. You mentioned many very valid points. I agree that the setups I decided to take were not perfect. I leaned on my understanding of context (support/resistance in this case) more. A mistake I made before, but one so hard for me to avoid in current market environment. I find it quite difficult starting out in such a low volatility period. Watching the market and not trading must be a useful exercise, but then in the end of the week when I see Bob's charts I get confused. Last 3 weeks, which I consider to be very slow, appeared to be not bad for the non-trending setups we all were looking for. But for some reason I miss many valid trades and don't see other members spotting opportunities.
Initially I chose this trading method because I thought it would be possible to shorten my learning curve using a very small time frame in a market that has decent volatility. I guess I'll just need to reassess my goals.

 

[cha-ching]

Thanks a lot for sharing cha-ching. Very useful material.
Shotgun, thank you for comments. You mentioned many very valid points. I agree that the setups I decided to take were not perfect. I leaned on my understanding of context (support/resistance in this case) more. A mistake I made before, but one so hard for me to avoid in current market environment. I find it quite difficult starting out in such a low volatility period. Watching the market and not trading must be a useful exercise, but then in the end of the week when I see Bob's charts I get confused. Last 3 weeks, which I consider to be very slow, appeared to be not bad for the non-trending setups we all were looking for. But for some reason I miss many valid trades and don't see other members spotting opportunities.
Initially I chose this trading method because I thought it would be possible to shorten my learning curve using a very small time frame in a market that has decent volatility. I guess I'll just need to reassess my goals.

Hi,

I think it's better to focus on how not to take invalid setups rather than how to take all valid setups. If you can take only half of the valid trades Bob spotted and avoid bad setups it'll be easy for you to achieve 5 pip a day (For US traders it'll be harder). If you can achieve consistency, with 5 pip a day and 0.5% max risk per trade you get 50% return per year even without daily adjustment of account size (with that you get 65% return, assuming 200 trading days per year).

Maybe you can also follow samich1262's approach, try a higher time frame method to supplement Volman's method during the overlap session, but maybe stick to Volman only during European morning session.

Just my two pips...

Happy trading,

 

[vanica]

Hi,

I think it's better to focus on how not to take invalid setups rather than how to take all valid setups. If you can take only half of the valid trades Bob spotted and avoid bad setups it'll be easy for you to achieve 5 pip a day (For US traders it'll be harder). If you can achieve consistency, with 5 pip a day and 0.5% max risk per trade you get 50% return per year even without daily adjustment of account size (with that you get 65% return, assuming 200 trading days per year).

Maybe you can also follow samich1262's approach, try a higher time frame method to supplement Volman's method during the overlap session, but maybe stick to Volman only during European morning session.

Just my two pips...

Happy trading,

Thanks for the spreadsheet, cha-ching! Great work and I agree with all your comments. From a practical point of view though, in order to average 5 pips a day one needs a decent amount of trades even per each single week. Obviously, it stops been a requirement if we assume high level of trader's proficiency, when his win/loss ratio starts improving, getting closer to 70-80%. But on earlier stages, the edge will be less evident and only bigger sample size of trades will show it. By no means I'm expressing my disbelief in Bob's methodology. I still think it's the best fit for my personality. I just thought it would be useful for myself (and maybe for other traders new to this thread) to set realistic and objective goals based on current market environment and some experience I've already obtained.

 

[BLS]

More charts from Bob:

Week 47 was a quiet week from of 70 tick chart perspective. With most US based traders taking off for the holidays (Thursday and Friday) there was not much to be expected in terms of fireworks. The market moved quite a bit in terms of price, though. Still, on the 70 tick and many other intraday frames, the low volume this week translated once again into many choppy ranges, little follow-through and virtually no momentum; in short, pretty much the usual, nowadays. But then again, equally usual is the fact that this environment provides excellent ranges that are highly tradable if only a trader is patient enough to let charts do the work first. A lot of scalpers often entertain the idea that they have to be all over the place, trading every tiny hint and clue found in the chart; after all, they are scalpers, right. But what purpose does that serve in a low volume, nonvolatile environment. Just relax, and let the market build up its ranges. If that is what it prefers to do, then who are we to object. You only need to catch a couple of good solid trades per week to already come out ahead. On balance, the charts do not make it hard, traders do. Attached you find the majority of textbook opportunities in Week 47.

 

[matty_dunn]

More charts from Bob:

Thanks again Bob and BLS, much appreciated.

 

[shotgun77]

Thank you again, Bob and BLS. Much appreciated!
It looks like stehlikpetr caught one of Bob's and considered another one at the beginning of the week.

I updated my noted based on weeks 45,46,47. Not much added. Search the doc for those numbers to see the updates.

 

[stehlikpetrmsncom]

Thank you Bob and BLS. The charts are so helpful!

 

[matty_dunn]

Giorrgi,

Thanks for your message mate. Unfortunately I am not permitted to send personal messages as I am only a rookie member.

I agree with you about the amount of time, just have to be patient and do what is possible with the time I have, however limited.

It's comforting to know that I'm not the only one who finds the juggle/struggle difficult.

Good luck with it all.

 

[vanica]

Thank you Bob and BLS. Very grateful for new charts.

 

[random12345]

Morning all,

If you'll be kind enough to indulge me - I am not interested in trading these techniques, but I picked up the book and have read through it bit by bit. I am interested in hearing about daily P&L and running P&L achieved by people on this thread.

My critique of the method is, as with all price action methods on forex, over-complication of basic mathematics, though dressed up as if it isn't. I won't go further into this as this thread is for positive discussion I can see that and I don't want to start an argument. I am interested in hearing about the psychology you employ though. Say if you go 30 pts into the red after 3 losers in a row (barring any stop movements or early exits)... the day is basically a write off no? 4 winners with no losers seems incredibly unlikely at this point - since forex moves in waves of differing sizes, limiting profit to 10 pips seems... hmm... more like a futures methodology.

Basically I'm saying do any of you ever get the feeling that you're making your lives difficult trading the EURUSD in this fashion? I have looked over some of the graphs supplied, and I have to say that a lot of the missed trades look identical to the taken trades except for the final 3 bars - how they managed to enter the latter and not the former using the same rules seems like stretching the truth to me. Some of these winning range breaks are barely 10 pts in total yet they so often claim to have skipped over 5 pt moves. Yet that 5 pts could have been half of the 10 needed for the successful break and I don't buy it (if you follow me). This book, to me, looks like it would do a lot better on a liquid futures index with solid directional moves rather than forex waves.

Can someone be kind enough to prove me wrong with some small explanation? Please note I imply ZERO denigration in what I write, but I do have difficulty coming across as otherwise.:innocent:

Thanks.

 

[virtuesoft]

If you'll be kind enough to indulge me - I am not interested in trading these techniques, but I picked up the book and have read through it bit by bit. I am interested in hearing about daily P&L and running P&L achieved by people on this thread.

This question has come up a few times now. I may as well lay down my stats. They're not spectacular by any means. I'm still struggling to make any serious profit with this system but after almost 2 years of trading full time, this method has given me the most success.

Over the past 4 months I've made the following...

July - 19 pips
August - 24.1 pips
September - 12.9 pips (I went on holiday for 2 weeks though)
October - 29.4 pips

Prior to this I wasn't trading live with real money so those stats are fairly pointless.

I am interested in hearing about the psychology you employ though. Say if you go 30 pts into the red after 3 losers in a row (barring any stop movements or early exits)... the day is basically a write off no? 4 winners with no losers seems incredibly unlikely at this point - since forex moves in waves of differing sizes, limiting profit to 10 pips seems... hmm... more like a futures methodology.

The most I have suffered is 4 losers in a row, however this was spread over a number of days and the total only came to -19.8 pips. I've never suffered a loss of 10 pips. My average loss is 5.4 pips. I also have a rule that if I suffer a loss of 20 pips or more in a single day I will stop trading for that day.

I quite often have 4 or more winners in a row. My maximum is 6. Again though, this is never in the same day.

Basically I'm saying do any of you ever get the feeling that you're making your lives difficult trading the EURUSD in this fashion? I have looked over some of the graphs supplied, and I have to say that a lot of the missed trades look identical to the taken trades except for the final 3 bars - how they managed to enter the latter and not the former using the same rules seems like stretching the truth to me.

Yes, it is difficult. However, like I said earlier, it is the best method I have found thus far and has given me the best results. The differences between a valid and invalid setup are subtle but you do get used to them. I trade very conservatively so I skip a setup if I'm not 100% convinced that it's valid. This does lead to a lot of missed opportunities but I don't really care that much, as long as I'm making a profit and getting better results month by month.

Some of these winning range breaks are barely 10 pts in total yet they so often claim to have skipped over 5 pt moves. Yet that 5 pts could have been half of the 10 needed for the successful break and I don't buy it (if you follow me).

I'm not following you here. Sorry.

This book, to me, looks like it would do a lot better on a liquid futures index with solid directional moves rather than forex waves.

I've thought about looking at employing this method on a futures index once or twice. However, a few things put me off... Set opening hours. Less flexibility in scaling up your position size. Wider spread (as far as I could see but perhaps I was looking at a crap broker). I'm open to suggestions though...

 

[vanica]

Still trying my luck with ARBs. Had my first and only winner couple of weeks ago, but think I should leave them for the time being.

 

[Giorrgi]

Anyone can critique the way I handled this ?

1. The barrier wasn't very clear and I had to adjust the rectangle at least 2 times before I entered.

2. Overall conditions: that might be a head and shoulders pattern inside of the box, but that might be stretching it a little. I couldn't read any other clues. A double bottom would've been better.

2. My entry: the squeeze wasn't perfect but it wasn't bad either.

3. Exit: I sold on the breaking of the little doji support pattern. I'm still not very good with tipping point but it seems valid to me. I'd really like some comments on this

4. Price reverses, builds a perfect squeeze and breaks out for a nice 10 pip run.

Yey for trading on simulation, I would've been really pissed if it was with real money.

 

[random12345]

This question has come up a few times now. I may as well lay down my stats. They're not spectacular by any means. I'm still struggling to make any serious profit with this system but after almost 2 years of trading full time, this method has given me the most success.

Over the past 4 months I've made the following...

July - 19 pips
August - 24.1 pips
September - 12.9 pips (I went on holiday for 2 weeks though)
October - 29.4 pips

Prior to this I wasn't trading live with real money so those stats are fairly pointless.



The most I have suffered is 4 losers in a row, however this was spread over a number of days and the total only came to -19.8 pips. I've never suffered a loss of 10 pips. My average loss is 5.4 pips. I also have a rule that if I suffer a loss of 20 pips or more in a single day I will stop trading for that day.

I quite often have 4 or more winners in a row. My maximum is 6. Again though, this is never in the same day.



Yes, it is difficult. However, like I said earlier, it is the best method I have found thus far and has given me the best results. The differences between a valid and invalid setup are subtle but you do get used to them. I trade very conservatively so I skip a setup if I'm not 100% convinced that it's valid. This does lead to a lot of missed opportunities but I don't really care that much, as long as I'm making a profit and getting better results month by month.



I'm not following you here. Sorry.



I've thought about looking at employing this method on a futures index once or twice. However, a few things put me off... Set opening hours. Less flexibility in scaling up your position size. Wider spread (as far as I could see but perhaps I was looking at a crap broker). I'm open to suggestions though...

Thanks for the responses - what I meant was that some of the trades marked up on the charts that were skipped were near identical in behaviour to trades that were taken later, the latter only developed into winners given time, time which wasn't given to the skipped trades, but no satisfactory explanation was given as to why the skipped weren't entered and allowed to develop (in my mind). I could be mistaken, perhaps I should read the annotated versions more closely.

All I would say is that this stopping trading mindset some people have doesn't make sense to me. The correlation to profit/time is rather set depending on your method. Any behaviour in price action that causes you to struggle and you've been struggling on, is more likely to change than it isn't. I.e. in basic terms, a narrow ranging market is likely to have an explosive and sudden trend and vice versa for example. It's like shunning the fact you're a profitable trader over time. However, if it sorts your head out for the next day then fair does. I was just too bloody minded to allow myself to have a losing day.

But anyway, good luck with it all. It's just a lot of bloody effort.

I was going to say you could try dax futures through a DMA broker or on one of the 1-pt spread betters, but come to think of it, it's not the best idea if Volman didn't intend it.

 

[cha-ching]

Anyone can critique the way I handled this ?

1. The barrier wasn't very clear and I had to adjust the rectangle at least 2 times before I entered.

2. Overall conditions: that might be a head and shoulders pattern inside of the box, but that might be stretching it a little. I couldn't read any other clues. A double bottom would've been better.

2. My entry: the squeeze wasn't perfect but it wasn't bad either.

3. Exit: I sold on the breaking of the little doji support pattern. I'm still not very good with tipping point but it seems valid to me. I'd really like some comments on this

4. Price reverses, builds a perfect squeeze and breaks out for a nice 10 pip run.

Yey for trading on simulation, I would've been really pissed if it was with real money.

I think the overall condition is good, but I don't like the squeeze. If the market was not slow you could take it though. Your usage of tipping point was correct, just bad luck.

EDIT: I just found that your initial tipping point would've been awkward (your stop would be 7 + 3 = 10 pips, which I don't like given the not-so-good squeeze).

 

[virtuesoft]

Thanks for the responses - what I meant was that some of the trades marked up on the charts that were skipped were near identical in behaviour to trades that were taken later, the latter only developed into winners given time, time which wasn't given to the skipped trades, but no satisfactory explanation was given as to why the skipped weren't entered and allowed to develop (in my mind). I could be mistaken, perhaps I should read the annotated versions more closely.

I can't say I noticed that to be honest, but perhaps I just missed it. I'm going to read the book again over the next week (for about the sixth time!) as I've been a bit rusty recently and I haven't traded as well. I will look out for that this time.

All I would say is that this stopping trading mindset some people have doesn't make sense to me. The correlation to profit/time is rather set depending on your method. Any behaviour in price action that causes you to struggle and you've been struggling on, is more likely to change than it isn't. I.e. in basic terms, a narrow ranging market is likely to have an explosive and sudden trend and vice versa for example. It's like shunning the fact you're a profitable trader over time. However, if it sorts your head out for the next day then fair does. I was just too bloody minded to allow myself to have a losing day.

Yes, the rule I have in place is there just psychological reasons. It's to sort my head out and prevent any further losses caused by an unstable mind.

I was going to say you could try dax futures through a DMA broker or on one of the 1-pt spread betters, but come to think of it, it's not the best idea if Volman didn't intend it.

Thanks. I'll have a look at DAX futures this week and see how it moves anyway.

 

[cha-ching]

This question has come up a few times now. I may as well lay down my stats. They're not spectacular by any means. I'm still struggling to make any serious profit with this system but after almost 2 years of trading full time, this method has given me the most success.

Over the past 4 months I've made the following...

July - 19 pips
August - 24.1 pips
September - 12.9 pips (I went on holiday for 2 weeks though)
October - 29.4 pips

Prior to this I wasn't trading live with real money so those stats are fairly pointless.



The most I have suffered is 4 losers in a row, however this was spread over a number of days and the total only came to -19.8 pips. I've never suffered a loss of 10 pips. My average loss is 5.4 pips. I also have a rule that if I suffer a loss of 20 pips or more in a single day I will stop trading for that day.

I quite often have 4 or more winners in a row. My maximum is 6. Again though, this is never in the same day.



Yes, it is difficult. However, like I said earlier, it is the best method I have found thus far and has given me the best results. The differences between a valid and invalid setup are subtle but you do get used to them. I trade very conservatively so I skip a setup if I'm not 100% convinced that it's valid. This does lead to a lot of missed opportunities but I don't really care that much, as long as I'm making a profit and getting better results month by month.

Very good results virtuesoft. May I ask how many hours do you trade per day, and how many trades you take (on average) per week? Are you comfortable with all 7 setups or just some of them? Thanks.