Bob Volman Price Action Scalping

[TonyIommich]

Here's 5 minute SPY today (I did not trade today, I am just marking the chart). Three possible setups a la Volman.

A. An aggressive box break, which ends up failing. Market gaps up and has some strong bullish action throughout the morning, despite the higher time frame trend lower. There is a level a bit higher (the unfilled down gap from three days ago) that the market was aiming for but failed to test. Note the breakout happened at around 11:30 which is often when the market likes to resolve unsettled business during the open - either by a with-trend push or a counter-trend push.

B. The lunch doldrums, as Volman likes to call them, did offer a pattern break combi setup here. However, we were stuck in a sideways winding range for a while. Btw, little research note: if you have had a non-volatile morning, especially when candles have wicks on both ends, stay the heck out of lunch unless you get A++ buildup along with trend confluence.

C. If we didn't get long, or if we scratched out of our earlier trade, this false bottom was a beautiful invitation to get involved. The buildup was amazing, and the follow through was great. 3:00 PM often provides some strong moves.

 

[cha-ching]

Here's 5 minute SPY today (I did not trade today, I am just marking the chart). Three possible setups a la Volman.

A. An aggressive box break, which ends up failing. Market gaps up and has some strong bullish action throughout the morning, despite the higher time frame trend lower. There is a level a bit higher (the unfilled down gap from three days ago) that the market was aiming for but failed to test. Note the breakout happened at around 11:30 which is often when the market likes to resolve unsettled business during the open - either by a with-trend push or a counter-trend push.

B. The lunch doldrums, as Volman likes to call them, did offer a pattern break combi setup here. However, we were stuck in a sideways winding range for a while. Btw, little research note: if you have had a non-volatile morning, especially when candles have wicks on both ends, stay the heck out of lunch unless you get A++ buildup along with trend confluence.

C. If we didn't get long, or if we scratched out of our earlier trade, this false bottom was a beautiful invitation to get involved. The buildup was amazing, and the follow through was great. 3:00 PM often provides some strong moves.

Nice post Tony. One thing I don't like the combi setup in general is that Bob's combi definition is so loose that many of his combi's don't look very consistent with others.

Another thing is he never mentioned stop placement for a combi setup (maybe he did? I don't see it from my notes, maybe I missed it). If the powerbar is big then you can't put your stop below (or above) the powerbar. Below or above the inside bar? Sounds too risky to me. Maybe it's his point since the entry is also below or above the inside bar at the opposite direction.

 

[TonyIommich]

I think that combis are just a matter of experience. The basic concept is you see a form of mini 'build up' of two bars. It's sort of like the double doji concept in a way. As for stop placement, that is a matter of some discretion. I would imagine just under the power bar is a good way to go, and if it's too big of a power bar, you can see what happens in your testing if you put it a certain amount inside of the power bar. That is a valid approach some people use.

 

[Charticist]

Trade on GBP/USD this evening

I put the trade in immediately after I got the trading platform opened. The arrow is where I intended to make the entry, but made the entry in the next bar and got about the same entry (pricewise) as I would have with the intended entry. The action was mostly in the EUR and AUD while the GBP was only along for a slower ride.

I put the hourly chart in there since it seemed like something was cooking. Even a trap on the hourly should give us plenty of movement on a tick chart. One of my monitors is a squarish old monitor and I have the four hourly charts across the top. I don't trade the hourly charts I just use them to help in some trade decisions.

I normally don't trade on Sunday evening but it seemed like the liquidity from Friday might carryover and it seems like it did. I could not trade on Friday and won't be able to trade the rest of this week, so I might be compensating.

Chart

 

[BLS]

Week 11 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[PipMonster24]

Week 11 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

Thanks for the charts Bob and BLS. Always appreciated

 

[drmb]

Week 11 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

Thanks a lot for charts

 

[cha-ching]

Hey Paul,

I find either the AUDUSD or the EURJPY the most conducive markets to this method during the Asian session. However, the volatility, appearance of set-ups and amount of follow through vary greatly.

Of the 2 pairs, I choose the one to watch that has the greatest potential for movement based on recent volatility and market structure.

Major news releases are also worth being around for, e.g. yesterday's Aussie retail sales report provided bearish activity that resulted in a solid entry (see attachment).

So much depends on current conditions, e.g. the first half of 2013 saw huge volatility in the EURJPY during the Asian session and plenty of opportunity. However, there are days that are as boring as hell.

I tend to focus on the European/US sessions the majority of the time, but trade the Asian session when I'm not working my day job (being based in Sydney).

Hope this helps,

Matt

Hi Matt,

Are you still trading these two pairs during Asian session or have you added more?

I would like to start trading the first half of Asian session as well (per Bob's new book where he suggested that US traders try 0:00 - 4:00 on his chart). What are the best hours to trade in your opinion (Asian morning, approximately GMT 1:00am - 4:00 am)?

Thanks and best regards,

Cha-ching

 

[Matt Chao]

Hi Matt,

Are you still trading these two pairs during Asian session or have you added more?

I would like to start trading the first half of Asian session as well (per Bob's new book where he suggested that US traders try 0:00 - 4:00 on his chart). What are the best hours to trade in your opinion (Asian morning, approximately GMT 1:00am - 4:00 am)?

Thanks and best regards,

Cha-ching

Hi, Cha-ching. I usually trade the Asian session about 3x's per week. I currently focus on USD/JPY and AUD/USD during Asia. You'll occasionally catch at EUR/USD trade in Asia, but not every day. A third pair that seems to do well is AUD/JPY, but my broker does not offer a great spread on that one, so I don't trade it. Last I spoke with matty_dunn, he was also focusing on USD/JPY and AUD/USD during Asia, but I'll let him confirm that. He may also have some thoughts on EUR/JPY.

I've found the Asian session to be very helpful. There is more time to evaluate the charts, so it has helped me develop better chart reading and trading habits. It has also trained me to be patient and deal with my "need to be in the market".

Regarding market hours, I typically start watching the market, when Tokyo opens or slightly after. Oftentimes, but not always, there is a lull during the Tokyo "lunch break", so I eat dinner (in California) during that time. Be wary of breaks during this period (similar to Europe or US lunch). Since Asia has various market centers, the "lunch hour" isn't as cut and dry as US or London. I use a "bar speed" indicator to help with this. Whenever the price bars consistently take more than 1 minute to form on the 70T chart, it's time for dinner. Also, be wary of any break outward from the "edge" of the chart during Asia (the most significant high or low from the past several hours). These most often become set-ups in the opposite direction in a couple of hours.

Also regarding trading hours, I've noticed that that the charts tend to either settle down or act funny during the 1.5 - 2 hours before Europe's open. Of course, that's my bedtime anyway, so I'm out by then. This site may help you with the market hours.

As far as productivity for a scalper using Volman's method... if you are comfortable watching 2 or 3 instruments at once, then you can probably make a good living trading only the Asian session. Looking at my trade journal for the past four weeks, I've actually made a decent profit during Asia but have barely broken even during the US session which I trade 4 times per week. But that's because I have made most of my mistakes and am more sleepy during the US session . Between the two charts (USD/JPY and AUD/USD) I average 2 to 3 trades per session. However, there is usually one session out of every week or two that I can't find a single trade or perhaps only one trade. Some sessions I find 4 or 5 trades (once every week or two). In general I've noticed that when there has been lots of movement during the US or London sessions, the Asian session will show more consolidation and congestion, but there is typically a trade to be had if you're patient.

Hope that helps. Asia can be boring at times, but it has been a good exercise for me.

 

[morpheous455]

Hello,

Has anyone here used the PST sponsored by IG? They offer the premium version for free if you make a few trades with them each month. Anyone here use it? I believe the data comes from IG so FX is 5 decimal rather than 4.

Jim

 

[cha-ching]

Hi, Cha-ching. I usually trade the Asian session about 3x's per week. I currently focus on USD/JPY and AUD/USD during Asia. You'll occasionally catch at EUR/USD trade in Asia, but not every day. A third pair that seems to do well is AUD/JPY, but my broker does not offer a great spread on that one, so I don't trade it. Last I spoke with matty_dunn, he was also focusing on USD/JPY and AUD/USD during Asia, but I'll let him confirm that. He may also have some thoughts on EUR/JPY.

I've found the Asian session to be very helpful. There is more time to evaluate the charts, so it has helped me develop better chart reading and trading habits. It has also trained me to be patient and deal with my "need to be in the market".

Regarding market hours, I typically start watching the market, when Tokyo opens or slightly after. Oftentimes, but not always, there is a lull during the Tokyo "lunch break", so I eat dinner (in California) during that time. Be wary of breaks during this period (similar to Europe or US lunch). Since Asia has various market centers, the "lunch hour" isn't as cut and dry as US or London. I use a "bar speed" indicator to help with this. Whenever the price bars consistently take more than 1 minute to form on the 70T chart, it's time for dinner. Also, be wary of any break outward from the "edge" of the chart during Asia (the most significant high or low from the past several hours). These most often become set-ups in the opposite direction in a couple of hours.

Also regarding trading hours, I've noticed that that the charts tend to either settle down or act funny during the 1.5 - 2 hours before Europe's open. Of course, that's my bedtime anyway, so I'm out by then. This site may help you with the market hours.

As far as productivity for a scalper using Volman's method... if you are comfortable watching 2 or 3 instruments at once, then you can probably make a good living trading only the Asian session. Looking at my trade journal for the past four weeks, I've actually made a decent profit during Asia but have barely broken even during the US session which I trade 4 times per week. But that's because I have made most of my mistakes and am more sleepy during the US session . Between the two charts (USD/JPY and AUD/USD) I average 2 to 3 trades per session. However, there is usually one session out of every week or two that I can't find a single trade or perhaps only one trade. Some sessions I find 4 or 5 trades (once every week or two). In general I've noticed that when there has been lots of movement during the US or London sessions, the Asian session will show more consolidation and congestion, but there is typically a trade to be had if you're patient.

Hope that helps. Asia can be boring at times, but it has been a good exercise for me.

Hi Matt Chao,

Thank you so much for your detailed reply! I will start looking at it next week.

Just wonder whether you trade Sunday evenings at all. Also what do you do during the session when there is no setup showing? I want to utilize the time between trades to study Bob's charts or books but found it not easy to do.

 

[Matt Chao]

Just wonder whether you trade Sunday evenings at all. Also what do you do during the session when there is no setup showing? I want to utilize the time between trades to study Bob's charts or books but found it not easy to do.

I've only traded Sundays twice. It doesn't typically fit my schedule, and it was pretty slow both times I traded it.

When it gets slow I walk away from the desk frequently, chat with the wife, do some body weight exercises, etc. It's easy to tell when nothing is going to happen for 15 min. But I try to do all that away from the desk, so I don't get distracted while I'm actually watching charts. I often keep a "backtesting" chart open for EUR/USD and scroll through it one bar at a time to take simulated trades. Then I compare my results with Volman's old charts. That's a very helpful exercise and can be done when times are slow. When the live charts start moving, I can't multitask too well, but I do take snack/exercise breaks every 45 min or so even when it's busy.

 

[frostbliss]

Hi, Cha-ching. I usually trade the Asian session about 3x's per week. I currently focus on USD/JPY and AUD/USD during Asia. You'll occasionally catch at EUR/USD trade in Asia, but not every day. A third pair that seems to do well is AUD/JPY, but my broker does not offer a great spread on that one, so I don't trade it. Last I spoke with matty_dunn, he was also focusing on USD/JPY and AUD/USD during Asia, but I'll let him confirm that. He may also have some thoughts on EUR/JPY.

I've found the Asian session to be very helpful. There is more time to evaluate the charts, so it has helped me develop better chart reading and trading habits. It has also trained me to be patient and deal with my "need to be in the market".

Regarding market hours, I typically start watching the market, when Tokyo opens or slightly after. Oftentimes, but not always, there is a lull during the Tokyo "lunch break", so I eat dinner (in California) during that time. Be wary of breaks during this period (similar to Europe or US lunch). Since Asia has various market centers, the "lunch hour" isn't as cut and dry as US or London. I use a "bar speed" indicator to help with this. Whenever the price bars consistently take more than 1 minute to form on the 70T chart, it's time for dinner. Also, be wary of any break outward from the "edge" of the chart during Asia (the most significant high or low from the past several hours). These most often become set-ups in the opposite direction in a couple of hours.

Also regarding trading hours, I've noticed that that the charts tend to either settle down or act funny during the 1.5 - 2 hours before Europe's open. Of course, that's my bedtime anyway, so I'm out by then. This site may help you with the market hours.

As far as productivity for a scalper using Volman's method... if you are comfortable watching 2 or 3 instruments at once, then you can probably make a good living trading only the Asian session. Looking at my trade journal for the past four weeks, I've actually made a decent profit during Asia but have barely broken even during the US session which I trade 4 times per week. But that's because I have made most of my mistakes and am more sleepy during the US session . Between the two charts (USD/JPY and AUD/USD) I average 2 to 3 trades per session. However, there is usually one session out of every week or two that I can't find a single trade or perhaps only one trade. Some sessions I find 4 or 5 trades (once every week or two). In general I've noticed that when there has been lots of movement during the US or London sessions, the Asian session will show more consolidation and congestion, but there is typically a trade to be had if you're patient.

Hope that helps. Asia can be boring at times, but it has been a good exercise for me.

Hi Matt Chao,
Thanks for this post, nice to know someone who trades the Asian session.

I only trade the US opening session for about 2hr.
I have just started reading this thread, progress has been slow. Trying to gather the details on Bob's method in here. The clean chart he uses attract me most.

I use interactive brokers, but it only have time base chart, so instead 70T i used a 5sec chart to improvise. Not sure if that's a good idea.

Do you post or keep trade logs in images like Bob does?

Regards,
Frost

 

[matty_dunn]

Hey cha-ching and others,

I don't really trade the Asian session that often, but when I do it is usually the AUDUSD and USDJPY, and sometimes the EURJPY.

I think the best time is usually the first couple of hours after the Tokyo open. In the wake of significant news releases can also be found decent opportunities. Also, significant volatility late in the US session can often carry into the Asian session, and this can be worth the time sticking around for. And yes, it can also be as boring as hell for many sessions in a row.

I predominantly trade the EU/UK morning session (evening Sydney time) and sometimes the start of the US session. With daylight savings changing this also means significant changes to trading hours for those of us living in the southern hemisphere, e.g. London moves from a 7pm open (Sydney) to a 5pm open over the next couple of weeks.

Have a good week everyone!

Matt

 

[BLS]

Week 12 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[Giorrgi]

Guys, I am currently watching the EUR/USD chart on 5 min timeframe.

I have a question about the pullback reversal setup.

The best place to take such trade is when the correction hits 40-60% compared to the trending swing + nears the EMA + technical test.

In the current market, I've seen situations where there are multiple pullbacks to the same intraday swing. Therefore, small pullbacks may arrive at the EMA without retracing much of the main swing.

The other scenario would be where a bigger retracement eats up a substantial part of the initial swing. This is the scenario that I drew on the attached file.

I have previously had a failed trade where I had all the textbook ingredients for a pullback correction but the prices dipped way below the EMA later on to test the 50% level of the bigger swing.

Basically my question is: should we trade smaller pullbacks that reach the EMA in an trending environment, or should we wait for a more substantial retracement ?

I realize this is all a matter of experience and there are no clear cut answers but I was wondering if you guys remember anything about this in Bob's book.

Thanks.

 

[TonyIommich]

The real answer, in the end, is going through at least several months' of data and testing. Even if Bob says or I say or someone else says this is what you should do, it's critical that you see it for yourself.

If you trade pullbacks more aggressively, more of them will fail and/or you will have to use a wider stop. I think what's particularly critical is assessing the strength of the pullback itself. If it's a bullish trend and you're seeing strong bear bars on the pullback (esp. if they're as strong if not stronger than the with-trend bull bars) that's a problem. That matters a bit more than the exact percent retracement, at least that's what my research has shown me. The moving average proximity is something I pay a bit less attention to. Potential 'assisting' support and resistance is something I pay more attention to. Hope that helps.

 

[cha-ching]

Hi Matt Chao,
Thanks for this post, nice to know someone who trades the Asian session.

I only trade the US opening session for about 2hr.
I have just started reading this thread, progress has been slow. Trying to gather the details on Bob's method in here. The clean chart he uses attract me most.

I use interactive brokers, but it only have time base chart, so instead 70T i used a 5sec chart to improvise. Not sure if that's a good idea.

Do you post or keep trade logs in images like Bob does?

Regards,
Frost

70T is approximately 30 seconds per bar when market is normally active. However using tick data is much better for trading Bob's 70T methods according to a number of traders in this thread. You can use ProRealTime or get a demo account from MBTrading and use NinjaTrader to show 4-digit currency rates from MBT.

 

[cha-ching]

Another review of Bob's new book

I found it here:

http://www.daytradingbias.com/?p=136206

It's not on Amazon.

smilingsynic's review of FPAS: http://www.daytradingbias.com/?p=121105

His summery of FPAS: http://www.daytradingbias.com/?page_id=81246/general/smilingsynic-trading-observations-etc/page-5
(I posted this a long time ago)

His five minute flip (FMF):
http://www.daytradingbias.com/?p=98702
(this is for ES only as far as I could remember)

A free login may be needed to access some of the above links.

 

[frostbliss]

70T is approximately 30 seconds per bar when market is normally active. However using tick data is much better for trading Bob's 70T methods according to a number of traders in this thread. You can use ProRealTime or get a demo account from MBTrading and use NinjaTrader to show 4-digit currency rates from MBT.

Tks. I will checkout mb n prt.