Bob Volman Price Action Scalping

[BLS]

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.

I think the target is usually 10 pip and under but I've seen people talk about a "long scalp" where they aim for something like 20-30 pip. It's rather subjective. The point is to get in and out relatively quickly (as opposed to holding trades for hours or days).

 

[samich1262]

So I've been checking the economic calendar and occasionally watching the AUD/USD when there are announcements with a high volatility rating coming. So at 8:30pm my time, it trends nicely for an hour or so once or twice a week. The last time I watched it, it had even better setups, but this isn't bad either. I have just been observing so I can see how fast I should expect it to move, but I think I may start taking these. I know the Asian session doesn't have a lot of activity, but this honestly has looked easier than the EUR/USD on some mornings in the past week. The news announcements sometimes give it just the push it needs to start trending.



The first arrow is a valid Doji. It tests the previous range to the pip, is much more compressed than the upward move, and the two dojis even have an even low. Can't get a much clearer setup than that.

The second one looked like an SB to me. Right in the 20 EMA, using a previous pullback as support.

The third one was the least attractive setup, but the pullback is a little weaker than the trend. It's got some compressed dojis, is relatively diagonal and the signal bar pierces the 20 EMA. The two negatives here are the pullback was a little long, and it erased 90% of the previous move. Plus the trend was weakening at that point. It's currently still 2-3 pips above the entry bar and is forming a small BB setup, but things have slowed down. I would probably skip the DD setup since it looked like momentum was slowing down at that point.

Anyways, I know not everybody likes the AUD/USD pair, but under the right conditions, it acts very closely like the EUR/USD. My spread ranges from 0.6-1.0, so it's worth it for me. The only other night this week with significant news for this pair is Thursday. If there's no major news for a pair during the Asian session, I don't even check it. But tonight could have given a couple nice wins in about 45 min.

 

[stehlikpetrmsncom]

So I've been checking the economic calendar and occasionally watching the AUD/USD when there are announcements with a high volatility rating coming. So at 8:30pm my time, it trends nicely for an hour or so once or twice a week. The last time I watched it, it had even better setups, but this isn't bad either. I have just been observing so I can see how fast I should expect it to move, but I think I may start taking these. I know the Asian session doesn't have a lot of activity, but this honestly has looked easier than the EUR/USD on some mornings in the past week. The news announcements sometimes give it just the push it needs to start trending.

View attachment 143138

The first arrow is a valid Doji. It tests the previous range to the pip, is much more compressed than the upward move, and the two dojis even have an even low. Can't get a much clearer setup than that.

The second one looked like an SB to me. Right in the 20 EMA, using a previous pullback as support.

The third one was the least attractive setup, but the pullback is a little weaker than the trend. It's got some compressed dojis, is relatively diagonal and the signal bar pierces the 20 EMA. The two negatives here are the pullback was a little long, and it erased 90% of the previous move. Plus the trend was weakening at that point. It's currently still 2-3 pips above the entry bar and is forming a small BB setup, but things have slowed down. I would probably skip the DD setup since it looked like momentum was slowing down at that point.

Anyways, I know not everybody likes the AUD/USD pair, but under the right conditions, it acts very closely like the EUR/USD. My spread ranges from 0.6-1.0, so it's worth it for me. The only other night this week with significant news for this pair is Thursday. If there's no major news for a pair during the Asian session, I don't even check it. But tonight could have given a couple nice wins in about 45 min.

I think I will look at some AUDUSD charts then, you've convinced me. How do you manage trading two markets? I would imagine setting EURUSD as a priority and taking only better setups on AUDUSD? Or do you watch them simultaniously on one screen and treat them indiscriminately? One more thing, do you believe it speeds up your learning curve or is it more difficult, because of small behavioural differences on both markets that you have to remember for each? And what about the tick settings, do you stay with 70?

 

[samich1262]

I think I will look at some AUDUSD charts then, you've convinced me. How do you manage trading two markets? I would imagine setting EURUSD as a priority and taking only better setups on AUDUSD? Or do you watch them simultaniously on one screen and treat them indiscriminately? One more thing, do you believe it speeds up your learning curve or is it more difficult, because of small behavioural differences on both markets that you have to remember for each? And what about the tick settings, do you stay with 70?

I still use a 70 Tick chart. I use EUR/USD as my priority and just glance at the AUD/USD chart every once in awhile. I plan to get a 2nd monitor so I can have both charts up at once. In cases like last night during AUD news sessions, I don't even look at the EUR/USD. I did glance at it last night but it was just crawling sideways while AUD/USD was trending. I think it speeds up the learning curve as long as the behavioral differences are very similar with that pair. I tried watching USD/CAD for awhile but it moves too different/slower than the EUR/USD. The entire chart is made up of dojis right now. Maybe in a trending/high volume market it would be ok, but it seems like RBs are tougher on that pair. I have not watched anything else other than GBP/USD.

 

[samich1262]

I have a question for you guys. For previous methods I was originally taught not to enter the market when the US session is about to open. I saw a setup today at 6:58 (market opens at 7 my time). Over 5min, the setup traveled up 12 pip. I've seen that happen several times this summer, and haven't noticed any major price spikes right at 7. Would you skip a setup a few min before the US session opened, or take it? Today I skipped a nice BB coming out of a range.

 

[BLS]

I have a question for you guys. For previous methods I was originally taught not to enter the market when the US session is about to open. I saw a setup today at 6:58 (market opens at 7 my time). Over 5min, the setup traveled up 12 pip. I've seen that happen several times this summer, and haven't noticed any major price spikes right at 7. Would you skip a setup a few min before the US session opened, or take it? Today I skipped a nice BB coming out of a range.

I worry more about the US stock market (9:30 EST) open than the forex session open. I don't think we have to worry much about the opens, at least Volman doesn't mention them in the book but I have noticed some relatively bigger moves when 9:30 EST comes around.

Was this the setup you were looking at? I dismissed this one at the time because I thought the pressure wasn't too clear but I'm not too sure now. If the pressure was clearer to me I would've taken it regardless of the time.

 

[samich1262]

Yeah, thats it. I thought it could be played like a BB since it had 6 equal touches and a higher bottom. I'm not too good at non-trending BB's yet, but I was going to take it. Should have... I took what I thought was a DD a few min later but it was a really stupid pick. The DD's were less compressed than the pullback. Oops...... There goes yesterday's profit...

 

[BLS]

Yeah, thats it. I thought it could be played like a BB since it had 6 equal touches and a higher bottom. I'm not too good at non-trending BB's yet, but I was going to take it. Should have... I took what I thought was a DD a few min later but it was a really stupid pick. The DD's were less compressed than the pullback. Oops...... There goes yesterday's profit...

I'm counting the days until September. 1.5 pip profit for yesterday, 1.4 pip for today. Bob does say we only need a couple pip a day to get out ahead...

 

[samich1262]

Yeah, I just feel stupid because the trades I wanted to take that I didn't take would've netted 40 pip between last night and this morning. But instead I'm at minus 10 for today and even for the week. I know losses will teach you more than a win, it just sucks to lose one or two making a mistake that you thought you had worked out. I took a bad doji like that a couple weeks ago. Oh well experience will eventually add up.

 

[BLS]

Yeah, I just feel stupid because the trades I wanted to take that I didn't take would've netted 40 pip between last night and this morning. But instead I'm at minus 10 for today and even for the week. I know losses will teach you more than a win, it just sucks to lose one or two making a mistake that you thought you had worked out. I took a bad doji like that a couple weeks ago. Oh well experience will eventually add up.

I think we have to continually try to improve our trading. I got overconfident when I made 30 pip a week for two weeks straight and neglected my growth as a trader. I stopped setting new daily goals to achieve and I regressed back 1-2 months, when I used to let myself say "**** it" and trade recklessly when I was already down 10+ pip. These past couple weeks have been more humbling and I've gone back to setting new daily goals (such as trying to be patient and waiting for superior setups).

 

[samich1262]

Yeah. It's very easy to do in this job. And in a market like the past couple weeks. I saw a couple good setups today, so I can't figure out why I took a couple that weren't legit. I should know better by now. On the first DD I just didn't remember all of the rules instantly, and once I got in, I was like... oh crap...

 

[BLS]

Yeah. It's very easy to do in this job. And in a market like the past couple weeks. I saw a couple good setups today, so I can't figure out why I took a couple that weren't legit. I should know better by now. On the first DD I just didn't remember all of the rules instantly, and once I got in, I was like... oh crap...

I've written a list of useful advice that Volman gives throughout his book and I read when I get bored of price action (I only started doing it this week). It's something to keep me grounded so I don't go into another death spiral of bad trades. Sometimes I just need to be reminded of that fact that "most of our time will be spent observing the market" so I don't go crazy.

 

[samich1262]

Yeah, that's a good idea. I thought about doing something similar, making a list with all the setups and bullet points of things that I find easy to forget. Really, the difference between break-even or small gains and big gains is only a few basic mistakes that should be worked out with a little bit more trading experience. I need to try to stay positive or I'll sabotage myself.

 

[stehlikpetrmsncom]

I've written a list of useful advice that Volman gives throughout his book and I read when I get bored of price action (I only started doing it this week). It's something to keep me grounded so I don't go into another death spiral of bad trades. Sometimes I just need to be reminded of that fact that "most of our time will be spent observing the market" so I don't go crazy.

That is something I wanted to do from the day one, I already have the paper with the quotes, but I didn't use it yet. I will start tomorow, because today I got a little bored + frustrated after that DD and entered 2 stupid trades that simply were not there. Thanks for the tip

 

[BLS]

That is something I wanted to do from the day one, I already have the paper with the quotes, but I didn't use it yet. I will start tomorow, because today I got a little bored + frustrated after that DD and entered 2 stupid trades that simply were not there. Thanks for the tip

Another thing that might help (and something I've neglected to do for awhile now) is to try to keep track of how frustrated and confident you are. Draw two thermometers on a sheet of paper, one for your level of frustration and one for your level of confidence. Make a line mark on the thermometer every time you feel your frustration of confidence level rise (ie after you skip, miss, or exit a trade, or if you feel bored, etc). If either one gets too high, try taking a small break: do some deep breathing and focus your attention elsewhere.

 

[samich1262]

That is something I wanted to do from the day one, I already have the paper with the quotes, but I didn't use it yet. I will start tomorow, because today I got a little bored + frustrated after that DD and entered 2 stupid trades that simply were not there. Thanks for the tip

Haha... I did the exact same thing. I guess we need to teach ourselves to become robots!

 

[samich1262]

Hey guys,

Sounds like some of us had a bit of a rough time today. I came up with several important questions after reviewing the chart tonight.

1. Do you think this was a valid SB setup? Pros: Nice pullback. A little hesitant but right into the average. Cons: 4 equal touches of 1.2433. Could spell resistance, but there is an example in the book with 3 touches of the same level...

This is the only reason that I can think for why it didn't take off: No retest of the range to the pip. It was 1-2 pips from actually finding support on top of previous resistance when forming the SB. I decided to go for it anyways because those were some pretty big green candles. Unfortunately I tried to play it as a DD which was stupid because the 3-pip dojis were bigger than the pullback, so ignore that for now... I'm just wondering if this SB should have been played or skipped.

We had this discussion a couple weeks ago but I am trying to nail down an absolute rule to follow:

2. Should we always skip DDs and SB's after a range breakout when the range is not tested to the pip? Or is this only an issue in a low volume market like we've been seeing this month? Because this trade failed, and it went right on down to retest that range.

3. What if the initial breakout had been more enthusiastic? Near the end of that initial uptrend, there were two bullish candles 5-6 pips in length. What if the initial breakout had been that enthusiastic too? Would that negate the need to retest the range barrier, or is this always necessary no matter what?

I had recently made a personal rule not to take a DD or SB after an IRB if it does not retest the range barrier, but I had not decided whether or not to wait for a retest from a BB or an RB situation. I fell for this one because it was a BB very close to the range barrier that triggered the breakout. Because of the way the market has behaved lately, I think if we can answer these questions and nail down a general rule to follow, it will reduce a significant amount of trap situations that result in scratched trades.

I was going to operate under the assumption that the range must be tested unless the breakout is a very solid RB, OR the breakout is a significant amount of pips. However that SB came after a 13 pip breakout so until I answer that question, a retest of the barrier to the pip is going to be what I look for. Any thoughts?

 

[vanica]

Hey guys,

Sounds like some of us had a bit of a rough time today. I came up with several important questions after reviewing the chart tonight.

1. Do you think this was a valid SB setup? Pros: Nice pullback. A little hesitant but right into the average. Cons: 4 equal touches of 1.2433. Could spell resistance, but there is an example in the book with 3 touches of the same level...

This is the only reason that I can think for why it didn't take off: No retest of the range to the pip. It was 1-2 pips from actually finding support on top of previous resistance when forming the SB. I decided to go for it anyways because those were some pretty big green candles. Unfortunately I tried to play it as a DD which was stupid because the 3-pip dojis were bigger than the pullback, so ignore that for now... I'm just wondering if this SB should have been played or skipped.

We had this discussion a couple weeks ago but I am trying to nail down an absolute rule to follow:

2. Should we always skip DDs and SB's after a range breakout when the range is not tested to the pip? Or is this only an issue in a low volume market like we've been seeing this month? Because this trade failed, and it went right on down to retest that range.

3. What if the initial breakout had been more enthusiastic? Near the end of that initial uptrend, there were two bullish candles 5-6 pips in length. What if the initial breakout had been that enthusiastic too? Would that negate the need to retest the range barrier, or is this always necessary no matter what?

I had recently made a personal rule not to take a DD or SB after an IRB if it does not retest the range barrier, but I had not decided whether or not to wait for a retest from a BB or an RB situation. I fell for this one because it was a BB very close to the range barrier that triggered the breakout. Because of the way the market has behaved lately, I think if we can answer these questions and nail down a general rule to follow, it will reduce a significant amount of trap situations that result in scratched trades.

I was going to operate under the assumption that the range must be tested unless the breakout is a very solid RB, OR the breakout is a significant amount of pips. However that SB came after a 13 pip breakout so until I answer that question, a retest of the barrier to the pip is going to be what I look for. Any thoughts?

Hi,

I've always thought that any range break is likely to be faded by big traders unless the overall market conditions are supportive. As we don't take into consideration higher time frames (i.e. the position of the range itself in a bigger picture), the only way to tell the chances of a successful break are high enough, is to evaluate the buying/selling pressure and look for pre-breakout tension. If those clues are absent and the breakout does take place, it all comes to whether we are comfortable with risk/reward on any particular setup that appears after. Like in your example, the SB that followed the break of the range did match all the necessary criteria, though I personally don't see enough signs within the range of bulls winning and bears capitulating (which is what we would like to see in case we are betting on the success of the break). I'm not sure it was possible to tell at that point with any degree of accuracy SB will fail for any reason. I assume it was one of those "more aggressive" trades and no one knows about long term performance of similar setups (at least I don't remember any information on this in the book). As you mentioned, lower market liquidity can be one of the factors to consider at the moment.

 

[samich1262]

I've only seen one opportunity so far today and I skipped it. That first bearish push cut through the bottom of the range without running into any resistance, so I skipped the SB setup at 7:54 on the chart. This was a terrible breakout because there was mysteriously no tension at all behind it, and it died out. There was a DD right in the average that I knew to skip because it had also not yet pulled back 40%.

I watched that BB setup but didn't take it. I wish I had, but I've had trouble with the smaller BBs. I think in this case it would be an ARB? This one shows excellent tension and was clearly bullish. Even had a retest of the breakout range, providing a 2nd chance to get in.

The 2nd box that I drew was a possible BB developing, however I didn't see the level of tension that I wanted so I skipped it. Seeing that price would need to clear 2 tops, I wanted to see a little more bullish tension before the break.

 

[BLS]

My skipped trades for today. I thought the first one was valid but aggressive. There is a big double bottom and a distinctive higher low after that tests the 40 level. We have a a pretty good signal line on the top with only one tease break. We have a nice squeeze and an almost free path to the 60 level. I skipped it because I wanted to see more cups and handles. I also skipped it because I kept thinking that many traders would stay on the sidelines until FOMC Meeting Minutes were released so I did not think I would have gotten much double pressure.

The second skipped setup was a rather weak BB setup.