Bob Volman Price Action Scalping

[virtuesoft]

I've read a lot of books on trading but most of them are junk. Bob's book is by far the best book out there in my opinion.

A few other excellent books are...

Mark Douglas - Trading in the Zone
Jack Schwager - Stock Market Wizards
Jack Schwager - The New Market Wizards

There also some others that are fairly good, and well worth a read...

John J. Murphy - Technical Analysis of the Financial Markets
Martin Pring on Price Patterns
Van K. Tharp - Trade Your Way to Financial Freedom

 

[virtuesoft]

I tried reading Trading in the Zone but found it difficult to get through the author's verbose writing.

Yeah, it isn't the easiest book to read. There are two good videos that cover most of whats in the book. They're here...

Mark Douglas Video - MIND OVER MARKET

Mark Douglas August 2005

There used to be a series of videos that covered his whole trading course. It was about 6 hours and it was great but I can't seem to find it anymore, it must have been removed.

 

[stehlikpetrmsncom]

Thanks. When you say the pullback could look better, did you mean you would have preferred it to pull back a little more? Or retest previous support first? Just wondering.

Hi, I don't like the blockiness, because a proper DD is a setup of candles that express indeciveness at the end of pullack - but here the dojis don't differ at all from the rest of the pullback.

I found out that the best DD's are if there is a little "free fall" space below the signal line, but in this particular setup every single pip to the downside is also a low of some other candle, which is a point where some people will want to buy.

Perhaps it would have been wiser to wait for a little BB, but then again, the trend was nice.

 

[stehlikpetrmsncom]

That's a lot of bars .

If you can find a reliable (demo) tick feed, you might be able to use Ninja Trader for that same feature? Or is that feature only available with the paid version of NinjaTrader? I'm not sure because I haven't used Ninja Trader but you might want to take a look at a demo account with MB Trading. I think someone here used the MB Trading demo feed with NinjaTrader but the "live" feed wasn't reliable. The historical data should be more reliable though.

You won't get much historical data if you want tick charts + they're of bad quality. Thanks for the suggestion though, I appreciate it.

I know it's a lot of bars to demand, but it's also a LOT of material to study

 

[BLS]

Rather frustrating to trade a trend so terribly.

 

[samich1262]

Rough day for trending trades. My guess is the volume's just not there. The other pairs that I usually watch have been flailing around in 1 pip increments for the last 2 or 3 days. I read that September is expected to move a lot. Hope so!

 

[samich1262]

BLS - I skipped both of the DDs in this trend. The 2nd one looked like the one that I took earlier, but it didn't pull back 40%. Neither did the 3rd so I skipped it too. That last one you pounted out might be playable, and also one at 9:25, but I am not comfortable with those yet. Mostly because it looks like they have more possibilities for support than a regular DD. I think the more economical entry price might be what validates them though. I am trying to start spotting the more obscure SBs and DDs to add to my tradeable setups in the next couple weeks. I liked that breakout at 8:40 and thought I should've taken it, it had excellent pressure. The reason I thought about taking it was, it formed using former support as resistance, and it had 10 pips of room to move before it hit the bottom of the range. It could have used that price action at 7:12 for support but I thought there was a lot more bearish pressure here. Still, setups like this, along with IRBs are on my "watch list" right now until I have seen them enough to feel more sure of my reads.

 

[TonyIommich]

Personally I think that having a fixed ten pip target is a bit of a mistake. Markets have volatility that shrinks and expands at various stages. Al Brooks tends to change his stops and targets as the volatility expands and contracts. Granted this takes some judgement, and introduces variables that somebody may not want to deal with.

 

[BLS]

Personally I think that having a fixed ten pip target is a bit of a mistake. Markets have volatility that shrinks and expands at various stages. Al Brooks tends to change his stops and targets as the volatility expands and contracts. Granted this takes some judgement, and introduces variables that somebody may not want to deal with.

I know what you mean. I've been tempted to cut my PT by about 2-3 pip given these market conditions. I think Volman chooses a 10 pip limit just to keep things as simple as possible.

 

[TonyIommich]

A possible way around the problem is to split the position in half which is what a lot of short term traders do: 1/2 off at the more conservative pip target, then keep the other one on for the 10 pip hit. When market conditions become more favorable then you can keep to 'all in, all out'.

The only thing I wouldn't do is the trail to breakeven after unloading half, which is a psychological game and goes against a probabilistic approach.

 

[samich1262]

A possible way around the problem is to split the position in half which is what a lot of short term traders do: 1/2 off at the more conservative pip target, then keep the other one on for the 10 pip hit. When market conditions become more favorable then you can keep to 'all in, all out'.

The only thing I wouldn't do is the trail to breakeven after unloading half, which is a psychological game and goes against a probabilistic approach.

I agree, these past couple weeks have been very low on volume. I considered temporarily changing my target to 8 pips and trailing with a tighter stop. Instead I actually lowered my volume by about 50% for this week, especially because I am not quite as good at ranging markets. I have seen a lot of trades that I skipped work out for 10 pips though, but they're not super easy setups (hence why I skipped them). They were valid though. With a little more experience I can start taking some of those IRBs because there were several of those this week. But that's my least comfortable setup at the moment.

Despite the conditions, I was able to finish the week in the positive, and I know that I missed out on a lot of good trades just because I don't feel comfortable with a lot of ranging setups yet. That makes me want to stick with a 10 pip target because even in unusual conditions like this week, the probabilities still work out in our favor. So I will stick with 10 pip targets for now, at least on EUR/USD.

 

[stehlikpetrmsncom]

Personally I think that having a fixed ten pip target is a bit of a mistake. Markets have volatility that shrinks and expands at various stages. Al Brooks tends to change his stops and targets as the volatility expands and contracts. Granted this takes some judgement, and introduces variables that somebody may not want to deal with.

It is a mistake from economical point of view, but a huge stress reliever from the psychological view - which, in return, will shine a bright light on the economical side.

I missed four targets this week by only a pip (or less), but my mind is clear and the only doubts I can have are regarding the entries, not the exits. Basically it's cutting on profit but making the scalping a lot easier, because once you enter the trade, you don't really care what happens next, you did your part (the management of opened position is super-simple).

 

[TonyIommich]

The challenge here the way I see it is how many elements do you want to have as controls in your method. Bob's method provides structure but at the same time encourages discretion.

This isn't one of those "stochastics over 80, MACD is up, enter at the break of X and exit always when price goes y% against you" type of methods - besides those methods that end up getting programmed as EAs often have a relatively short life anyway.

We could look at something like ATR or the VIX for example, as a good indicator of whether to be more conservative or liberal with our take profits.

 

[Mark1979]

Nice euro scalp...

 

[stehlikpetrmsncom]

I'm really interested to see what did you guys trade today, I only had 1 invalid setup I shouldn't have traded and that's about it.

 

[samich1262]

Just took a BB trade on EUR/USD. I'm not sure if this was the best setup since there were some bullish signs within the box, but it did have a double bottom and 13 equal touches of the barrier. Since it gave me a doji right before the break, I took it.

This one took some patience, because it was slow to develop and formed two more BB setups on the way to the target. I actually bailed at 8 pips profit because it seemed to be stalling when forming that double top. The setup did in fact complete for 10 pips profit about 5 minutes later. This trade had plenty of support so technically, maybe I should've stayed in, but after such a slow market last week I was afraid the market lacked follow-through. There were no real signs that the bears were gaining any traction here.

I closed my position on the dark arrow pointing to a doji. I also skipped the 3rd BB because I was hoping to see a doji before the box broke. In a faster market I would have taken it, although it could be defensible. Just didn't see quite the tension that I wanted. There were two dojis in a pullback after I closed my position, but I did not see this as a valid DD because the dojis were not more compressed than the rest of the pullback.

 

[samich1262]

Just took another BB. I took the 1st arrow which may have been a little too aggressive. That 2nd signal looked nicer. I ran into the same issue here, it formed another BB on top of the current setup. I cut this one short too because there was serious stalling near the 50 level. Cutting that short may have been a more valid decision than cutting the first, but both setups did provide me with a decent tipping point. Ended this one with a 3 pip profit, up 11 pips on the day.

I am still not sure how to treat setups going into the 50 or 00 levels. I don't know if I should skip certain setups, trail more aggressively or if I should cut them if they start stalling like this trade. Right now, this trade is a couple pips above where it was stalling, but I really did not like what I was seeing. No real bearish signals, but it was definitely stalling while approaching the 50 level. Still not sure if that was cause to cut the trade or not. Any thoughts on this?

I plan to re-read a few chapters in Bob Volman's book this week (for like the 5th time, hahaha!)

 

[BLS]

E1: Probably should've skipped this one. This range formed after prices fell from the 20 level (not on chart). The pressure inside the range is rather even up until the bulls made a lower low after that double bottom. Prices slowly moved up after that. In hindsight, it wasn't very clear that the bears were hurting; it wasn't clear that they would bail at the break of the barrier. It was clearer after they failed to test the 00 level to the pip before the bulls bought prices back up.

View attachment 143104

Just took a BB trade on EUR/USD. I'm not sure if this was the best setup since there were some bullish signs within the box, but it did have a double bottom and 13 equal touches of the barrier. Since it gave me a doji right before the break, I took it.

I can't remember if I skipped the first one or if I just missed it but I did take the second BB though I saw it more as a range break than a BB. I'm trying to trade a a bit more conservatively than last week, at least until September or whenever volume seems to return. I probably skipped the first BB because I wanted to see more build up but the bulls did well to use the 20 level as a base of support. I ended up closing my trade a couple pip short of target too because of my experience last week (right under the 40 level).

I wouldn't take the third BB either. I think we have to be careful trading BB's into 20-levels in slower/ranging markets so it might be best to skip them or wait for more build up.

View attachment 143106

Just took another BB. I took the 1st arrow which may have been a little too aggressive. That 2nd signal looked nicer. I ran into the same issue here, it formed another BB on top of the current setup. I cut this one short too because there was serious stalling near the 50 level. Cutting that short may have been a more valid decision than cutting the first, but both setups did provide me with a decent tipping point. Ended this one with a 3 pip profit, up 11 pips on the day.

I skipped this one too because I wanted prices to use the 40 level as support, just like in my earlier trade. I think that the 50 level should be considered a "con" when deciding when to trade, even if there is no visible chart resistance.

In my conservative view the cons outweighed the pros:

1. The trend was rather weak. (Con)

2. The setup was weak. We don't have a clear signal line (which is fine in a strong trend). (con)

3. We have the 50 level up ahead. (con)

4. The pressure is obviously bullish (pro).

But that's just me looking at this trade through my new found conservative glasses.

I'm not sure if it was the best idea to cut a trade short when it stalls near the 50 level. You should trail more aggressively when you see stalling like that for sure but closing trades out without using the tipping point technique may lead to a bad habit of cutting perfectly healthy trades short.

I'm still grappling with this. On the one hand, there's a lack of volume right now so the temptation to close out early is very tempting, especially when we've seen trades go 9 pip in the green only to reverse and take out our stop. But on the other we may develop and maintain this habit when volume does return, which would hurt our profit potential. I'm at a loss on what to do so I'm moving back and forth between closing out earlier when I see stalling and sticking to my tipping point.

 

[samich1262]

Same here, it's definitely been unusual lately. After the European market closes, the rest of the US trading session is pretty much worthless. I used to at least see 1 or 2 good trades during that timeframe, but not for the past month. Today wasn't too bad, had opportunities, just slow. I prefer a faster market. Looking forward to September.

 

[Just4Fun]

Can I interrupt to ask a very silly question, sorry ?
How is scalping defined ?
I know it involves artfully snatching pips when possible but how many pips ?
Is it singles, or tens of pips on each scalp ?
Thanks.