Bob Volman Price Action Scalping

[bling23]

Just wanted to share this backtest that I did earlier.
I find that this is a common situation for me.

Everything seems to be falling into place, but ends up the entry I take usually fails.

Then it starts to move against me and hovers on the brink of exiting my trade, after which it usually does.

I just wanna see what comments everyone has. I know Bob always tells us to manage our stops properly and not be over zealous for a breakeven stop as prices usually crawl back to the breakout point before hammering down again.
I try to control my stoploss and usually try not to move my stops but many times, I wonder if I should have exited earlier since the 'inevitable' always happens and exiting earlier can save me a couple of pips.


For my chart below:

E1: attempted upside movement to 1.238 but failed. lower and lower highs, squeezing back to 1.236 bottom. The bullish attempts were often quickly defended by the bears, which prompted the entry after the 20EMA squeeze at 1.236. Prices move for a couple of pips, but reverse back into range, finally a false break and stopped out.

E2: The false break prompted movement downwards, indicating downward momentum intact. Because of the new low and the fast movement downwards which did not give enough pressure, earlier ARB entry was rejected until the 2nd red arrow. Price did jump, but not enough to reach target, after which price rebounded and formed an ascending triangle (aka BB), cleared the 20EMA and was stopped out.
Note that E2 reached a max of 6-7 pips, stopped neatly at 1.2350 before reversal.
Should a smaller target of 7 pips be set since we know that 1.235 is a round number zone?

I feel that all these small losses always hinder my account value and to my win-lose ratio.

 

[samich1262]

Just wanted to share this backtest that I did earlier.
I find that this is a common situation for me.

Everything seems to be falling into place, but ends up the entry I take usually fails.

Then it starts to move against me and hovers on the brink of exiting my trade, after which it usually does.

I just wanna see what comments everyone has. I know Bob always tells us to manage our stops properly and not be over zealous for a breakeven stop as prices usually crawl back to the breakout point before hammering down again.
I try to control my stoploss and usually try not to move my stops but many times, I wonder if I should have exited earlier since the 'inevitable' always happens and exiting earlier can save me a couple of pips.


For my chart below:

E1: attempted upside movement to 1.238 but failed. lower and lower highs, squeezing back to 1.236 bottom. The bullish attempts were often quickly defended by the bears, which prompted the entry after the 20EMA squeeze at 1.236. Prices move for a couple of pips, but reverse back into range, finally a false break and stopped out.

E2: The false break prompted movement downwards, indicating downward momentum intact. Because of the new low and the fast movement downwards which did not give enough pressure, earlier ARB entry was rejected until the 2nd red arrow. Price did jump, but not enough to reach target, after which price rebounded and formed an ascending triangle (aka BB), cleared the 20EMA and was stopped out.
Note that E2 reached a max of 6-7 pips, stopped neatly at 1.2350 before reversal.
Should a smaller target of 7 pips be set since we know that 1.235 is a round number zone?

I feel that all these small losses always hinder my account value and to my win-lose ratio.

Hmm, ARB's like this aren't really my strength but I'll give this a shot. I personally wouldn't feel comfortable taking the first trade. Most diagonal attempts to break a barrier or range seem to fail. If I'd seen prices come up off the barrier and then push against it again, I might consider it. I like to look for almost a horizontal "brick wall" and think, if price gets below this, will it be difficult for it to push through it?

I might have taken the 2nd trade but it would require close attention. I don't see anything super obvious that would make it invalid. The first thing I would be looking at is that low at the far left of the chart which ended up being used as support. If I see something like that, I will want a little extra pressure before the ARB or RB breaks to make sure it has enough momentum to take that out. The most ideal situation would be an RB breaking topside so you don't have to worry about that (trend = trend) but reversal RB's are still valid.

I don't like that there's only one test of the high, and since it's right below 1.24, there's always the possibility of the "magnet effect" near round numbers, especially since the initial trend was bullish before the range formed. There is a small head and shoulders pattern, but I'd still prefer a retest of the high. Things are never going to be perfect, but I'd be cautious here that the bulls are still waiting around. So it looks like if you skip that first trade, you could still try to take the 2nd one and get out for a small profit or break even.

I just started taking ARB's this past week, so I'm not that experienced with them yet, but I am pretty comfortable with RB's now. Hope this helps a little!

 

[stehlikpetrmsncom]

Hey guys, I'd love to join this thread!

I have been trading Bob Volman's strategy for about a month now (with minimum size). I don't like the solitary nature of trading, so I was really happy to stumble across this thread.

I'm situated in Czech Republic and I trade usually 8-10am and then 12-5pm (GMT), 5 days a week, using ProRealTime and Oanda fxTrade (EURUSD).

I see a little community has been formed around this thread and I look forward to participate!

 

[BLS]

I just stumbled on this thread today.
Have been trading Bob's method for the past few months now, still trying to get the hang of it.

My win/loss ratio stands at about even, with loss slightly more =(

I refer to your E4 below, it seems I always face that problem.
More often, I find myself trying to stick closely to Bob's RB but no matter how it looks, somehow my entry ends up becoming a false break or tease break like yours.

I find that happening so often (about half the time), even though there is proper squeeze.

Anyone have any comments on E4-ish kind of pattern?

If the overall pressure and conditions line up with a good setup, then it's okay to trade. The pattern from E4 was excellent but would shouldn't focus too much on that. Can we see a clear direction in the overall pressure? Yes, prices failed to break the 40 level and we see the bears attack the 20 level. Are there unfavorable conditions or support from below that blocks our 10 pip target? No, except maybe from that low I pointed out but one low usually is not enough for us to assume there is strong support at that level (there was strong support from that low but it wasn't really "visible" to us at the time of entry.

It's possible that you are just unlucky and happen to pick a lot of valid trades with bad outcomes. That's quite possible to do during this environment. I thought volume and follow through were returning based on last week's price action but I was wrong. That was mostly low liquidity, news driven price action.

It's very tricky to trade during this time. I think Thurdsay's price action is a good example, see my attached charts. The market does nothing most the time and drifts between twenty levels (On Thursday it just moved around the 1.2300 level). You have to be very careful about your trade selection when this happens (wait for better conditions, better signal line, better squeeze). Then price action picks up suddenly, producing a trade-able trend. But you have to switch from trading conservatively to trading more aggressively to get in on the trend. That takes experience, experience that I don't have yet. If you take a look at the comments on the 4th chart, I was still in "conservative mode". Looking back now, those skipped trades were probably all trade-able.

Sure that skipped BB had support below to deal with but that was factored into the length of the BB. We also had the round number below us that might pull prices through. That DD might have been ruined by having the round number above it pull prices up but the risk to reward was favorable enough to trade it. The risk was about 5 pip and you stood to gain 10. That second DD is a good example of a valid trade with a bad outcome but trade-able nonetheless.

 

[BLS]

Just wanted to share this backtest that I did earlier.

For my chart below:

E1: attempted upside movement to 1.238 but failed. lower and lower highs, squeezing back to 1.236 bottom. The bullish attempts were often quickly defended by the bears, which prompted the entry after the 20EMA squeeze at 1.236. Prices move for a couple of pips, but reverse back into range, finally a false break and stopped out.

E2: The false break prompted movement downwards, indicating downward momentum intact. Because of the new low and the fast movement downwards which did not give enough pressure, earlier ARB entry was rejected until the 2nd red arrow. Price did jump, but not enough to reach target, after which price rebounded and formed an ascending triangle (aka BB), cleared the 20EMA and was stopped out.
Note that E2 reached a max of 6-7 pips, stopped neatly at 1.2350 before reversal.
Should a smaller target of 7 pips be set since we know that 1.235 is a round number zone?

I feel that all these small losses always hinder my account value and to my win-lose ratio.

I would not take that that first trade. There is not enough buildup given how prices came down from the 80 area and you have that 60 level right in front of the trade acting as support. If prices are ranging like this it's better to wait for more buildup and a better signal line/range barrier.

The second one is a bit trickier; I'm not sure if I would have taken it or not. You have more buildup now but you can reasonably expect some support around the 50 area. I think the new stop for this one was alright.

 

[bling23]

Hi all

just wanted to share a trade I just made today.
It's a modified Bob's technique, making use of his entry style but changing the 10 pips take profit concept.

I made use of average true range value from some other method I have learnt to give me a gauge of the price movement that might occur.

Bob's method usually just focuses on the entry pressure, but I feel, fail to note the overall price movement and pressure from a bigger time frame, which sometimes, inevitably, causes us to end up on trades that are bound to go against us eventually.

The fib lines were in place using the average range from the previous day and by placing the 0% at the LOD.

Please kindly comment and let me know what you think of this method.

 

[BLS]

E1: Probably should've skipped this trade since prices pretty much came from the the top barrier of the block. It would probably take more price action, ie a lengthier block, to break through the resistance below around the 40 area. Indeed we had a successful break (first skipped trade) but I skipped it because I wanted more build up. I probably also skipped this because my first trade didn't work, but trades like these are alright to take since the bears are using the 60 level as a base of resistance to attack lower levels and we have a long block that acknowledges the resistance underneath.

The second skipped trade is similar to the first one but I'm not sure if it was long enough for a break out to hit the 60 area. It's hard to tell whether it was long enough or not but I guess one could trade this is they wanted to. I think it'll take more experience before I can feel comfortable taking these kinds of trades.

E2: Prices are trending a bit at this point (in my opinion anyway). They didn't break through the 60 level that easily; a bull flag was formed before prices moved on. Prices pulled back to the bull flag, offering some support. Without this bull flag support, I probably would've skipped this trade because prices would likely want to test the 60 before moving on. The bulls were able to break past a previous high but hit resistance at the 1.2373 level so I thought it was prudent to trailing more aggressively.

 

[vanica]

E1: Probably should've skipped this trade since prices pretty much came from the the top barrier of the block. It would probably take more price action, ie a lengthier block, to break through the resistance below around the 40 area. Indeed we had a successful break (first skipped trade) but I skipped it because I wanted more build up. I probably also skipped this because my first trade didn't work, but trades like these are alright to take since the bears are using the 60 level as a base of resistance to attack lower levels and we have a long block that acknowledges the resistance underneath.

The second skipped trade is similar to the first one but I'm not sure if it was long enough for a break out to hit the 60 area. It's hard to tell whether it was long enough or not but I guess one could trade this is they wanted to. I think it'll take more experience before I can feel comfortable taking these kinds of trades.

E2: Prices are trending a bit at this point (in my opinion anyway). They didn't break through the 60 level that easily; a bull flag was formed before prices moved on. Prices pulled back to the bull flag, offering some support. Without this bull flag support, I probably would've skipped this trade because prices would likely want to test the 60 before moving on. The bulls were able to break past a previous high but hit resistance at the 1.2373 level so I thought it was prudent to trailing more aggressively.

Hey BLS,

The first chart you posted looked very two-sided to me. When the block/small range, where you had your first entry, started forming it looked very much like a squeeze (up until 5.50 your time). At that point I thought that bulls needed a breakout otherwise would retreat. Though the breakout never happened, I wouldn't call that price action bearish. Why did you decide to take this short trade into the zone of previous support?

Many thanks.

 

[BLS]

Hey BLS,

The first chart you posted looked very two-sided to me. When the block/small range, where you had your first entry, started forming it looked very much like a squeeze (up until 5.50 your time). At that point I thought that bulls needed a breakout otherwise would retreat. Though the breakout never happened, I wouldn't call that price action bearish. Why did you decide to take this short trade into the zone of previous support?

Many thanks.

Price action was ranging between the 40 and 60 levels for quite awhile so it seemed likely that those levels would hold somewhat. That was further confirmed when the bulls couldn't crack the 60 level. I think the fact that the bears could cap prices under the 60 was a good clue for a short, especially since they brought prices down from the top of the barrier around 5:50 like you said.

But are right, it was too early to trade at that time. We have a clue of bearish control but it's not enough to trade off of; we need more confirmation that the bulls have struggled and are going to give up at the break of the bottom barrier.

It's okay to take BB's into previous support, assuming the conditions and pressure are supportive. I think Bob mentions this in the book but I forget where. Blocks like these form because there is support at some lower level. The challenge is determining if the price action within the block is supportive enough of a downward break.

We may encounter some congestion around the 50 area but I don't think it was something to worry about. Prices moved from the 40 area to the 60 area without much resistance after prices broke out of that dotted ellipse. I don't think we have to care much about that slow prices action around the 50 area from before 5:00 on the chart. That just looks like London lunch hour price action.

I made a mistake with E1 and traded too early. It would have been nice to wait for more of a "struggle" before trading. I think that tiny false break that occurred later could have been the last clue to push a trader over the edge to trade the break but I wasn't so sure at the time.

 

[stehlikpetrmsncom]

Hi, these are the trades I took today. They're all Double Doji Breaks

1/ First DD is a very beautiful setup - Newly born, strogn trend, nice diagonal pullback little above the EMA.

2/ Second DD is slighly inferior. I had doubts because the first black candle in the pullback rejected the round number above quite quickly and rest of the pullback consisted of dojis. Still, I had to take it because the trend was clearly on my side and there was no way of predicting that resistance would form below the '20 round number.

3/ There's really not much to say, another nice DD.

 

[BLS]

Hi, these are the trades I took today. They're all Double Doji Breaks

1/ First DD is a very beautiful setup - Newly born, strogn trend, nice diagonal pullback little above the EMA.

2/ Second DD is slighly inferior. I had doubts because the first black candle in the pullback rejected the round number above quite quickly and rest of the pullback consisted of dojis. Still, I had to take it because the trend was clearly on my side and there was no way of predicting that resistance would form below the '20 round number.

3/ There's really not much to say, another nice DD.

Nice trades. Wish I was awake for the first two but I wake up pretty early as it is for my time zone.

In case you didn't know, on the lower left hand corner of ProRealTime's chart window, there is a button that looks like a printer. You can press this to either print your charts or save it as an image so you don't have to use the snipping tool.

 

[samich1262]

Yeah, the Euro session looked really nice today. The overlap session was probably the most bland I've seen it since I started scalping 6 weeks ago. Seems like the Euro session has had smoother setups and then the overlap session just consolidates a lot for the past month. Kind of discouraging. I may actually try to get up for it tomorrow.

 

[samich1262]

Didn't do so hot today, but nothing catastrophic. I missed the BB trade that BLS posted. I tried to take two RB trades. Neither made it to the target but I got out for a profit on one and a loss on the other.

Here's my EUR/USD trade.

The problem with this, I think, is that it's not really an RB. The price isn't really ranging yet. It hadn't established a consistent high so this was probably a bad move. Once I saw that the break was stalling, I decided to get out for a 3 pip gain because the bears just weren't enthusiastic enough. I felt like that was the right call according to Volman for this trade, I just shouldn't have played it like an RB.


2nd trade today was on the USD/CAD

This 2nd RB didn't work out. I think the setup looks better than the EUR/USD trade that I took. The only particularly bad sign is that higher high right before the break, and I almost didn't take this because of that. I think I actually took the trade one pip lower than that line, and treated it like an ARB.

Does anybody see anything wrong with this trade? I'm trying to figure out if it just didn't work out, or if I overlooked something. Possibly that higher high, not enough pressure on the break... That higher high went above the 20 MA, and I was going to skip it until price went back down and formed a small barrier 1 pip below that horizontal line. Then it had the 20 MA on its side again, pushing it down. Maybe a combination of that higher high and the magnet effect of the round number above? Also thought maybe this RB was just too indecisive before the break. It's very horizontal, not many arcs. I dunno. Last week I was good with RBs but not so much today. I have made some good trades on the USD/CAD in the past month, so I don't really think that pair is too much different than the EUR/USD that this strategy shouldn't work. It does move a little bit slower, but with the right setup, it can be traded.

 

[BLS]

Didn't do so hot today, but nothing catastrophic. I missed the BB trade that BLS posted. I tried to take two RB trades. Neither made it to the target but I got out for a profit on one and a loss on the other.

Here's my EUR/USD trade.
View attachment 142660
The problem with this, I think, is that it's not really an RB. The price isn't really ranging yet. It hadn't established a consistent high so this was probably a bad move. Once I saw that the break was stalling, I decided to get out for a 3 pip gain because the bears just weren't enthusiastic enough. I felt like that was the right call according to Volman for this trade, I just shouldn't have played it like an RB.


2nd trade today was on the USD/CAD
View attachment 142662
This 2nd RB didn't work out. I think the setup looks better than the EUR/USD trade that I took. The only particularly bad sign is that higher high right before the break, and I almost didn't take this because of that. I think I actually took the trade one pip lower than that line, and treated it like an ARB.

Does anybody see anything wrong with this trade? I'm trying to figure out if it just didn't work out, or if I overlooked something. Possibly that higher high, not enough pressure on the break... That higher high went above the 20 MA, and I was going to skip it until price went back down and formed a small barrier 1 pip below that horizontal line. Then it had the 20 MA on its side again, pushing it down. Maybe a combination of that higher high and the magnet effect of the round number above? Also thought maybe this RB was just too indecisive before the break. It's very horizontal, not many arcs. I dunno. Last week I was good with RBs but not so much today. I have made some good trades on the USD/CAD in the past month, so I don't really think that pair is too much different than the EUR/USD that this strategy shouldn't work. It does move a little bit slower, but with the right setup, it can be traded.

I'm not too sure about the first one. If you thought the market was trending a bit at the time then it was an okay trade, though you would have to trail your stop attentively because you are trading into the 40 level.

There was some support above the 40 level though I'm not sure if it was visible on your chart at the time of entry. If you didn't think there was much of a trend, and that support was visible, then you should probably have skipped it. That 40 level needs some...oomph to crack. In ranging/non-trending markets, it's nice to see ranges form with 20 levels as a base of support/resistance, rather than ranges forming to break in the direction of support/resistance.

If the second setup appeared on the EUR/USD in the exact manner I'd probably take it; I'm not too familiar with the characteristics of USD/CAD price action.I don't know what happened ~30 minutes before but it's possible there may have been something unfavorable there. That false break of the 20EMA is a welcome sign because it gives you a good place for your tipping point.

 

[vanica]

Didn't do so hot today, but nothing catastrophic. I missed the BB trade that BLS posted. I tried to take two RB trades. Neither made it to the target but I got out for a profit on one and a loss on the other.

Here's my EUR/USD trade.
View attachment 142660
The problem with this, I think, is that it's not really an RB. The price isn't really ranging yet. It hadn't established a consistent high so this was probably a bad move. Once I saw that the break was stalling, I decided to get out for a 3 pip gain because the bears just weren't enthusiastic enough. I felt like that was the right call according to Volman for this trade, I just shouldn't have played it like an RB.

I also got involved here, even at a lower price. Unfortunately got basically low ticked on my entry. The price was slowly grinding down and I thought a weak trend was unfolding. Bottom barrier of this range wasn't clear to me so I gave it a bit more time for confirmation. And when prices formed the last block (where you exited) I assumed it was a good place to trade either a form of ARB or BB (although I don't like BB which appear right after the break of previous swing low). I agree, the setup wasn't one of the clearest. Plus the price action in the preceding two hours was rather two sided, although with bears slightly dominating. Think should have skipped it as need to focus on more orderly setups at the moment.

 

[stehlikpetrmsncom]

...

Hi, the second setup doesn't have a proper break. The higher high isn't necesarilly an issue since it can also be considered a double top (therefore bearish sign), but the price clearly broke down from this high, which is not what you want.

On this particular chart, most candles are dojis, which is very tricky when trading RB, because the squeeze candles are usually dojis as well

 

[samich1262]

Last week we were talking about false DDs coming right after a range break. They didn't work out because the market wasn't truly trending or the RB had not been retested. This morning there were a couple good DD setups after a downward break was not retested (although this wasn't really a tradeable RB setup. Stop-loss isn't economical, no real push before the barrier break, plus ranging action right below it to the left). I skipped the first DD although it was definitely the most valid of the three. The market had dropped 15 pip as opposed to what we saw last week, where an RB broke south by 5-8 pips, came back and formed a DD, but a couple pips below the range barrier (it did not retest the range barrier to to the pip). In this case, the downward break was so powerful that it probably negated the need for a retest. It would have scared too many bulls away, and it broke far enough south that it would be a serious feat for it to climb back into that range. The counter trend was uniform and each candlestick was smaller than the candlesticks in the initial downtrend. But nevertheless, I didn't take the first setup because I was still trying to weigh whether or not this was going to be a false DD again. I did get in on the 2nd DD there, which traveled 8 pip and then reversed. I got out for a 3 pip gain at the X, where my tipping point was breached. That DD is inferior to the first setup. It's not as uniform and it backs up into the first setup instead of using it as support. Almost didn't take it, but the market was in an obvious downtrend at that point (although signs pointed to the trend slowing down). I almost exited when it got to 8 pip but decided that would be a bad habit to form and stuck to Volman's tipping point rules. That last arrow looked to me like an SB but I was already in the DD at a better price.

So despite not having a retest of the range, I felt like this DD should have been taken. It's a good example of what we were talking about last week, whether or not we can take trending setups after an RB or not, although this trend was short-lived.

 

[BLS]

View attachment 142698

Last week we were talking about false DDs coming right after a range break. They didn't work out because the market wasn't truly trending or the RB had not been retested. This morning there were a couple good DD setups after a downward break was not retested (although this wasn't really a tradeable RB setup. Stop-loss isn't economical, no real push before the barrier break, plus ranging action right below it to the left). I skipped the first DD although it was definitely the most valid of the three. The market had dropped 15 pip as opposed to what we saw last week, where an RB broke south by 5-8 pips, came back and formed a DD, but a couple pips below the range barrier (it did not retest the range barrier to to the pip). In this case, the downward break was so powerful that it probably negated the need for a retest. It would have scared too many bulls away, and it broke far enough south that it would be a serious feat for it to climb back into that range. The counter trend was uniform and each candlestick was smaller than the candlesticks in the initial downtrend. But nevertheless, I didn't take the first setup because I was still trying to weigh whether or not this was going to be a false DD again. I did get in on the 2nd DD there, which traveled 8 pip and then reversed. I got out for a 3 pip gain at the X, where my tipping point was breached. That DD is inferior to the first setup. It's not as uniform and it backs up into the first setup instead of using it as support. Almost didn't take it, but the market was in an obvious downtrend at that point (although signs pointed to the trend slowing down). I almost exited when it got to 8 pip but decided that would be a bad habit to form and stuck to Volman's tipping point rules. That last arrow looked to me like an SB but I was already in the DD at a better price.

So despite not having a retest of the range, I felt like this DD should have been taken. It's a good example of what we were talking about last week, whether or not we can take trending setups after an RB or not, although this trend was short-lived.

I skipped the first DD because I thought the pullback was too shallow compared with the down move the preceded it. There also appeared to be some uncertainty around the reversal (long candle wicks) that I did not like. I guess I wanted to see how prices would handle the 40 level a bit more.

I thought the second setup was superior to the first because it was additional confirmation of a forming trend (lower high/prices under the 20EMA). I ended up exiting for a small loss on the second DD.

 

[samich1262]

Yeah, it was close, but it looked to be pretty close to 40%. I checked the AUD/USD chart and both of those DD's showed up much clearer there. They both worked out, traveling about 13 pip each but they were at a sharper angle on that chart.

 

[samich1262]

Hey BLS, should I be comparing the pullback to the initial move from where it breaks the range, or from the top of the last arc before it breaks the range?