Bob Volman Price Action Scalping

[shotgun77]

Its important, imho, to experiment because eventually you have to learn to try new things. Also, having on an insignificant position will always let you get a better feeling for the market then having nothing on and just watching.

Thanks. In general I agree. Right now the plan is to exercise discipline and do more of what I do well.

When I friend tried Volman, he said he'd take 100 trades and see how it goes. Then another 100 after review and adjustments. That seemed like a good exercise to try something new.

 

[shotgun77]

I didn't do the spreadsheet analysis that I did last week. But it looks like a very tough week to trade.

My questions from week 40 charts:

Chart #04 Around 13:00-13:05
After F and T breaks downside, price comes up and closes above ema.
Makes 3 dojis with equal highs. Is this a valid IRB but you hold off because of round
#? In the past, I would have taken something like this. But my current (more conservative) list doesn't allow.
Chart #11 shows a similar IRB and he shows that is good. It is slightly
above the round # so maybe that is the distinction.

Back on chart #4: Then he shows another T break. Would the pullback then subsequent break
be a valid RB? He doesn't mark it as such. Why are those 2 dojis with the
ema squeeze not sufficient for the RB? I would trade something like this and not think it
too aggressive - especially after the rejection at the round #.

Chart #06
On the skip, he says it started from a false low.
What is he talking about? Where is the false low?

 

[Giorrgi]

Guys I'm having some trouble understanding the intricacies of the ARB setup, they mostly have to do with identifying the entry bar.

1. So the first situation ARB is traded is when the barrier level isn't very clear like in an RB but instead looks like a mini block break formation. If I got this right, in this situation, the entry bar is the same as it would be in a block break: basically a breakout bar, am I correct? Are there any other varieties of a signal line for this ARB situation?

2. The second situation a sudden breakout (without the pre-breakout tension) which then pullsback to the barrier range OR (more frequently?) to the last arch ceiling. Here, if I got this right, the entry bar is simply a bar that reverses from the pullback motion and goes back towards the breakout motion (if the breakout was short, the entry point would be when the previous low of the bar was broken to the downside). Am I correct? Any other signal bars in this variation?

3. Also, page 220 Bob talks about an elongated doji line bar (11 in the 13.3 figure) which he says is a "stalling bar". I'm not quite sure what he means by "stalling bar". Can anybody explain?

Sorry for the lengthy/sometimes unreadable questions but I can't put it any other way. Thanks !

 

[stehlikpetrmsncom]

I didn't do the spreadsheet analysis that I did last week. But it looks like a very tough week to trade.

My questions from week 40 charts:

Chart #04 Around 13:00-13:05
After F and T breaks downside, price comes up and closes above ema.
Makes 3 dojis with equal highs. Is this a valid IRB but you hold off because of round
#? In the past, I would have taken something like this. But my current (more conservative) list doesn't allow.
Chart #11 shows a similar IRB and he shows that is good. It is slightly
above the round # so maybe that is the distinction.

Back on chart #4: Then he shows another T break. Would the pullback then subsequent break
be a valid RB? He doesn't mark it as such. Why are those 2 dojis with the
ema squeeze not sufficient for the RB? I would trade something like this and not think it
too aggressive - especially after the rejection at the round #.

Chart #06
On the skip, he says it started from a false low.
What is he talking about? Where is the false low?

On chart #4, I think the RB doesn't show sufficient bullish pressure to allow for such an agressive RB, you'd probably move the barrier a pip lower, so two dojis two pips above the barrier after a break from the middle of the range doesn't look very promising. Just my opinion.

On chart #6, false flow is reffering to the lows after ARB - the price went from new low (after rb) to make new highs ignoring all resistance on it's way. That's a 100% shift from fully bearish to fully bulish, with no build-up or anything, so the 'trend' is very likely to be strongly countered, because it doesn't spring from proper foundation. He talks about this phenomenon a lot in the chapter on unfavourable conditions.

 

[shotgun77]

Guys I'm having some trouble understanding the intricacies of the ARB setup, they mostly have to do with identifying the entry bar.

1. So the first situation ARB is traded is when the barrier level isn't very clear like in an RB but instead looks like a mini block break formation. If I got this right, in this situation, the entry bar is the same as it would be in a block break: basically a breakout bar, am I correct? Are there any other varieties of a signal line for this ARB situation?

There is a question of where the barrier level is -- different traders might put it at different levels. So on the break, there is not unanimous agreement that a break occurred. So price pauses while traders decide if that is a valid break and forms its own little barrier line -- its signal line. It does look like a mini-block. I wouldn't call it a breakout bar (my terminology might be different than yours) but just a break of the signal line.

2. The second situation a sudden breakout (without the pre-breakout tension) which then pullsback to the barrier range OR (more frequently?) to the last arch ceiling. Here, if I got this right, the entry bar is simply a bar that reverses from the pullback motion and goes back towards the breakout motion (if the breakout was short, the entry point would be when the previous low of the bar was broken to the downside). Am I correct? Any other signal bars in this variation?

You are correct. That is the signal bar.

3. Also, page 220 Bob talks about an elongated doji line bar (11 in the 13.3 figure) which he says is a "stalling bar". I'm not quite sure what he means by "stalling bar". Can anybody explain?

A stalling bar means price paused/stalled/reversed. Any doji could be considered a stall because its very small body means neither bull or bear won the fight -- it "stalled" in indecision of whether to be a bull or bear bar.

The bar in question (bar 11) first went up quite a bit from its open then reversed and closed at its low. So the up move "stalled" and left a big tail on top.

Another type that he describes somewhere is when you have a strong bear bar that gets reversed on the next bar with a good bull bar (or vice versa). So price looked like it was going to have more down with a solid bear close then reversed and went back up (frequently to the open of the bear bar. So the down move stalls. Volman's trick here is to combine the two bars. Then you see that you have a single bar with a long tail and possibly a doji or at least a small body.

Ask more questions if my explanations are muddy.

 

[Giorrgi]

shotgun77 - thanks a lot man, everything's crystal clear now.

 

[cha-ching]

Several have mentioned Al Brooks. He will be releasing a video course soon. Here is one big difference I see between Brooks traders and Volman traders. Both are watching the same charts all day. Traders here at the forum sometimes see the exact same trade. Some may take and others may pass. That tells me that Volman's method is understood of what makes a good setup and what does not. Sure you miss a lot of what Volman sees but that is to be expected when learning as a student can't expect to see as much as the teacher.

In contrast, on Brooks forum, you never see the discussion talking about the same setup, whether taking or passing it. Now in theory hundreds of Brooks traders are all looking at the same 5 minute ES chart. So it makes me wonder why are they not seeing the same thing? Several have their own journals and post their trades. But never do the traders see the same trade and discuss as an opportunity to trade or pass. In hindsight at end of day, there may be some discussion if a direct question is asked on a particular opportunity. And that discussion may have some overlap in shared analysis. I don't discredit Brooks at all -- he is a great trader. But I do wonder why others can't learn his method and "trade alike" like they can with Volman.

Brooks and Volman will both tell you that you don't have to use their method to make money. What counts is to learn "something" that has a proven edge (based on your studies/backtesting/studying/use) and really, really, really study it. When you have completely mastered "it", you make money.

I have recently "narrowed" down the conditions when I take Volman's setups. I think I can master them easier/faster by taking them only in the conditions that are easiest to see on the chart without fooling myself -- seeing what I want to see so I can trade. The "narrowest" conditions is the ARB. The "broadest" conditions is the BB. I think this narrowed focus will help me concentrate on doing more of what I do well.

But it is hard to see a setup go to profit and you didn't allow yourself to take it because it wasn't on your list. Something I have to fight psychologically.

Thanks for your input shotgun77. I searched some other forums and have yet to find anybody who claims s/he is profitable using Brooks method on forex with success. On the other hand I did find quite a few who claims Volman's book helped them a lot with non-forex trading. Not that I'm skeptical about Brooks, it's just that his books are difficult to read and require a lot of time from me, I guess I'll just put them aside until I have a really good understanding at Volman's book.

 

[TonyIommich]

This is my trading strategy. There are many like it, but this one is mine.

My trading strategy is my best friend. It is my life. I must master it as I must master my life.

My trading strategy, without me, is useless. Without my trading strategy, I am useless. I must fire my orders true. I must trade better than my enemy who is trying to kill me. I must run his stop before he runs mine I will...

My trading strategy and myself know that what counts in this business is not the number of trades we make, the amount of pips of each run, nor the charting software we use. We know that it is the probability that counts. We will trade the probabilities...

My trading strategy is human, even as I, because it is my life. Thus, I will learn it as a brother. I will learn its weaknesses, its expectancy, its parts, its variations, its drawdowns. I will ever guard it against the ravages of the market and damage from my emotions as I will ever guard my legs, my arms, my eyes and my heart against damage. I will keep my trading strategy ready. We will become part of each other. We will...

Before God, I swear this creed. My trading strategy and myself are the defenders of my account. We are the masters of our enemy. We
are the partners in the trading business.

So be it, until victory is America's and there is no enemy, but peace!

 

[MaxDoom]

good morning,

stumbled across your thread here, I have recently started trading Bob's method

 

[Giorrgi]

guys,

Is a platform that displays price evolution in pipettes a no-no? why would that be?

 

[stehlikpetrmsncom]

guys,

Is a platform that displays price evolution in pipettes a no-no? why would that be?

Because your chart will be all jagged and you'll have a hard time identifying proper signal lines to trade from. Just try and see. Full pips are definitely better

 

[shotgun77]

Thus, I will learn it as a brother. I will learn its weaknesses, its expectancy, its parts, its variations, its drawdowns. I will ever guard it against the ravages of the market and damage from my emotions as I will ever guard my legs, my arms, my eyes and my heart against damage.

Interesting way of looking at it. But very true that you must know its weaknesses and all its parts.

I would look at it as a living organism that grows according to my ability to grow with it. To visualize, go from single cell organism to complex organism. So maybe you have a gestalt period for each stage of development.

I realized today that I'm not quite thinking like a scalper because I'm reluctant to do the tipping pt mgm. I'm used to keeping swing stops and I need to realize/accept sooner when a scalp trade is over (though the swing trade might still be in progress). Going through Volman's charts shows me he is quick to accept when price shows the scalp opportunity is over and time to exit.

 

[Giorrgi]

Here are my first attempts at using Volman's concepts in practice :smart:. I'm trading a demo account on pathfinder. I couldn't watch the market all the day today so it's rather limited. The time stamps on the chart are Greenwich +1h.

stehlikpetrmsncom - Now, I very much see how annoying it is to have price action evolve in pipettes - as usual thanks for your help . I sent pathfinder/fastbrokers an email asking if they could help me out with that.

Setup 1. jpg :

Small rectangle : At this point I considered trading the smaller rectangle that was the fist one I drew. The barrier wasn't well defined so I thought I'd go for an ARB setup. However the three ellipses seemed like clustering price action. I actually traded one of those bars around 12am but bought back immediately regretting that I had made a hasty decision in an unclear environnement : although the first red ellipse to the left was cleared, the second red ellipse still seemed like clustering price action. Later the small rectangle barrier started looking completely irrelevant. Again, a couple of very tall dojis later prices seemed to finally rushe lower defying the second red ellipse. In hindsight this looks like a very textbook pullback ARB setup (or a BB?), however as I've said before I didn't trade it because of what I thought was clustering price action.

I then drew a bigger triangle in an attempt to define a much larger range. Here the range wasn't perfectly defined but it much better (same picture). Prices broke straight down from the EMA without carefully revisiting the barrier level. I actually thought about trading this whenever the lower level of the last arch (the cluster at 12h15 approx) would get broken. Howeverm, I didn’t once again because of clustering price action (3rd red ellipse) – the barrier level, which I thought should be first revisited to confirm the lower range of the barrier. But price never did properly retest that level. And a pullback never came. So a trade skipped but all in all I’m happy with the framework that the boxes provide.

Question: am I too paranoid about choppy clustering price action?

Second attachment: another range formation seemed to emerge. This time the upper barrier broke after a very nice top squeeze/tension buildup. However the break would have been initiated countertrend. Therefore I didn’t trade the setup because it was so against the current.

I would very much appreciate any input.

 

[shotgun77]

am I too paranoid about choppy clustering price action?

I don't think so, especially just starting out. I think the action is similar to chart #16 from Volman's latest set.
The action between 10:08-10:40 does not show any entry and to me that is similar to your chart.

However the break would have been initiated countertrend. Therefore I didn’t trade the setup because it was so against the current.

Yeah, you do have to be careful going counter.
But the block did have 3 equal lows. And after that, buyers did seem to be encouraged to come in. I think either decision would be ok -- to take or to pass. Aggressive perhaps but the squeeze seems clear.

 

[samich1262]

Hey guys, I was wondering what your opinion was on this situation. Take a look at the 2nd bear flag and arrow. That looked like a valid SB to me. I first saw a doji develop but skipped it because in the countertrend, there's not just one, but two higher lows. So the next step was to wait for an SB or a BB. However, I wasn't sure if the higher lows would make an SB here too aggressive or not. Is this a good SB option or should I wait for a BB? I'm guessing it would be fine given the strength of the downtrend, and probably should've jumped in. I feel like it should've been a no-brainer, but some things that I take end up being aggressive and I don't realize it. A DD would definitely be too weak of a setup given the higher lows. I thought I'd take a BB if I saw one, but didn't see one develop. The angle of the bear flag was a little steep at the time of the DD setup, but by the time the SB developed, it looked like a nice retracement.

The first bear flag wasn't a lengthy enough pullback for me.

 

[stehlikpetrmsncom]

I think it's valid considering the stop is only 5 pips, but I wouldn't be surprised at all had it failed. I took the DD, I realize the pullback is horrible, but trend was strong, possible vacuum effect and the break of DD was also a break of the angular line, which played a role in the previous pullback (which I missed). Agressive trailing would be a good idea here.

 

[samich1262]

Hey remember when I said I wasn't going to take aggressive trades? Oops.



This was kind of dumb. It was trend=trend by the way, but the downtrend was a little further back. If during an IRB or RB, price is going sideways instead of arching, it seems like the breaks fail. Probably because the pressure is too even. If you see a bunch of arches, it's more obvious which side is the barrier. Also, this forms a triangle which looks likely to break to the upside, and it did. A few min later it did break to the downside, but I had closed my position already. What a bummer.

On the other hand, the EUR/USD had a much more clear picture. Unfortunately I didn't take it since I had just lost the IRB trade on the GBP/USD. Its such a fine line between a winning and a losing day. I was probably just frustrated about skipping that SB and a bunch of good trades last week, and as a result I came back in way too aggressive.

 

[stehlikpetrmsncom]

I didn't trade well today, entered some stupid trades, skipped/missed the good ones. I find trading trends hard for some reason.

 

[samich1262]

I didn't trade well today, entered some stupid trades, skipped/missed the good ones. I find trading trends hard for some reason.

The issue with that last DD is similar to the one you marked "one of the worse". It has a higher low in it. It also erases most of the last move and that move had not made it 10 pip. I would skip it.

I almost took the RB that you took, but I wanted either a better squeeze, or a more economical entry. The 50 level seemed to be holding. When it finally did break, it didn't look like an obvious valid break to me.

Don't worry I took a stupid IRB today too. I get frustrated when I am unwilling to risk capital on valid trades, and then turn around and risk it on a poor IRB or something. It is so weird. I have been in this odd slump for like 3 weeks. I'm going to try to relax, review the new charts and come back tomorrow with a fresh outlook. I know that my reading has improved a ton, so I am not sure why my performance is still in a rut.

 

[johnwolf]

No problem here with the second SB. The higher lows in the pullback are not on particularly strong bars, and you waited for the SB, which followed a lower high. Seems like a good opportunity to me. When in doubt, you could have waited for a breakout pullback, which occurred a few bars later.

John

View attachment 146850

Hey guys, I was wondering what your opinion was on this situation. Take a look at the 2nd bear flag and arrow. That looked like a valid SB to me. I first saw a doji develop but skipped it because in the countertrend, there's not just one, but two higher lows. So the next step was to wait for an SB or a BB. However, I wasn't sure if the higher lows would make an SB here too aggressive or not. Is this a good SB option or should I wait for a BB? I'm guessing it would be fine given the strength of the downtrend, and probably should've jumped in. I feel like it should've been a no-brainer, but some things that I take end up being aggressive and I don't realize it. A DD would definitely be too weak of a setup given the higher lows. I thought I'd take a BB if I saw one, but didn't see one develop. The angle of the bear flag was a little steep at the time of the DD setup, but by the time the SB developed, it looked like a nice retracement.

The first bear flag wasn't a lengthy enough pullback for me.