Bob Volman Price Action Scalping

[Fugazsy]

Entries - Stop Marker vs Market

Dear fellow Volmanites,

From reading FPAS I got the impression that Bob recommends hitting the buy/sell button manually to enter trades. My question is, why? Wouldn't it be much easier to place buy/sell stop market orders instead? Will you not miss some of the quickest (and surest) moves by entering trades manually?

Thanks in advance!

You will not have much time placing stop orders, beside once the pip level is breached in the right market condition, it is time to enter.

 

[danielkauff]

You will not have much time placing stop orders, beside once the pip level is breached in the right market condition, it is time to enter.

Thanks for reply Fugazsy.
If for example you're planning to go long once the price goes 1 pip above 35 you have to two options:
a. Wait for the chart to print 36 and then hit the the Buy Market button;
b. Place Buy Stop-Matker order at 36 before it breaches 35.

The problem with option A is that by the time you manully react to the breach of 35, price could potentially be already a few ticks further away from the desired price.

So why does Volman prefers option A over B?

 

[Fugazsy]

Thanks for reply Fugazsy.
If for example you're planning to go long once the price goes 1 pip above 35 you have to two options:
a. Wait for the chart to print 36 and then hit the the Buy Market button;
b. Place Buy Stop-Matker order at 36 before it breaches 35.

The problem with option A is that by the time you manully react to the breach of 35, price could potentially be already a few ticks further away from the desired price.

So why does Volman prefers option A over B.

Yes that will occur especially at those level if it is moving fast, but having a stop order also can bring slippage when moving fast.

For what I understood placing a stop order is much more complicated in terms of execution, in market orders you need just to press the button, in stop orders you need to type in the price, by the time you type the market has moved and remember your TP is only 10pips, if you are 2-3 behind, frustration can kick in...and you do not want that.....

 

[Fugazsy]

I certainly don't think it's "completely wrong". I think that if you can show (yourself) that over a statistically significant number of trades, that's more profitable than the alternative(s), then you've taken Volman's work and incorporated it successfully into your own trading style. I don't mean that to sound in any way disparaging: it's what I've gradually done, myself.

(One possible solution/method, to try to cover the situations you're discussing, is to trade three lots, closing the first two with a less-than-10-pip profit which still locks in some profit, and then manually trailing the stop-loss on the third when there appears to be enough volatility to justify doing so, but it's both labour-intensive and concentration-intensive, and personally I've found that it's no trivial matter to demonstrate that this it's necessarily worthwhile, overall.)

I would like to like this post but I cannot and I do not understand why. Damn.

 

[cha-ching]

Thanks for reply Fugazsy.
If for example you're planning to go long once the price goes 1 pip above 35 you have to two options:
a. Wait for the chart to print 36 and then hit the the Buy Market button;
b. Place Buy Stop-Matker order at 36 before it breaches 35.

The problem with option A is that by the time you manully react to the breach of 35, price could potentially be already a few ticks further away from the desired price.

So why does Volman prefers option A over B?

Using a stop order can make things complicated. It may never trigger (i.e., you placed the order a little too late). One thing I tried in this case is, if price on the chart has already broken 1 pip from the barrier but stop order is not triggered, I place a market order instead and cancel the stop order. The problem is, if you do it before you cancel your stop order, prices may go back and then trigger your stop order, then your risk will double. If you cancel your stop order before you enter market, prices may have moved further away.

When one gets started it's always better to keep things simple. Yes prices could be a few pips further away from 36 in your example. Then you can simply wait for a retrace before you enter. In Bob's book he said entering at retrace in the next two bars is OK if the setup still looks valid. What if it doesn't retrace? You simply let it go. From my past experiences with ProRealTime this rarely happens (i.e., prices moved too fast for you to enter, and no retrace afterwards).

I also keep track of the slippage (with OANDA). I found that for EURUSD OANDA's slippage is almost always negligible for my trades, sometimes positive and sometimes negative, overall they cancel out. For example, if I enter at 36 (on PRT) and exit at 41 (on PRT), I can be very sure the profit would be very close to 3.5 pips (41-36-spread).

If you use stop order to enter, you will save half of the spread per trade. For OANDA that's about 0.75 pips, which can be significant over time. However, if your broker is an ECN with fixed commissions and very tight spread (e.g., 0.2 pips), you'd be better off using market orders only.

 

[BLS]

Week 51 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[BLS]

Week 52 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[BLS]

Week 53 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[Jingles]

Ninja Trader is free and the new Ninja Trader 8 is due out very soon. suppose to be out by early January. but I have not seen the announcement. they should hopefully fix things. you probably best to look into this and see what is coming.

I am presently using NT7 and hope that new NT8 will fix a lot of things. the price is right for me. haha.

you can trade free using the DOM but not the chart trader free. You have to pay to use chart trader to place orders. I hear now that some software like Think or Swim is offering free use of a chart trader placement of orders. but I could be wrong as I dont use that. I think also IB brokers is coming out with the same. I suspect within a year or so free chart trader will be common as everyone scrambles to keep up with competition.

Ninja Trader has tick charts & can be used with most or all Forex brokers and in fact most if not all regular brokers. Although it best to check on this if you are married to your broker. just in case. not all are linked so well. you can usually get free data feed from the broker and then the free software from NT. although NT now has broker services and advertise agressive low cost. I have not looked into that.

AMP Trading advertises about 40 different software packages free so they might be good to talk to about what you want. they do futures, forex and stocks. Not positive but pretty sure they do all of them.

I am sure you can find good tick charts. I would talk to both NT and AMP and see what they have to say. you can use NT on AMP also.

Good Luck please check back here and let us know what you discover. share back with all of us.

 

[GUSCHER]

Hi I have just completed my best week ever following some of Bob's examples. Ended the week up 246 points. I made a new years resolution to stop gambling (chasing losses & hoping for the best!) and start trading! Remove the emotion & employ more discipline, in other words just become more professional. I do the euro/usd and FTSE 100 using similar methods. only 3 lost trades out of 44 this week. As I have said before the rule I don't follow is the 10 point limit, if I hit 10 points I let it ride then come out once it turns against me. I have made 40,50 & 66 points like that this week. I don't know? I have only been following B.V & trading for a year, so what do I know! I just feel I'm getting better at reading the charts after reading bob's book for a 2nd time! Good luck trading n the new year!
Gus

 

[Fugazsy]

Good on you. You learned from him and then you personalised it, you brought yourself forward.

What was the most valuable thing you learned from Bob?

Myself the constant tug of wars between the parts.

 

[GUSCHER]

Thanks, Good question! and difficult to say but the discipline and emotional side are well up there as is, if it goes against your perception of what you thought was going to happen don't wait for the stop loss to kick in, come out for the smaller loss. If it's gone against you it will probably carry on against you! I have trouble with this and still do! relying on lady luck to change things for me. Bad move. The easier more obvious rule is always trade with the trend. I have to sit at the computer while I have trades on which can be boring and time consuming. I know of people who just set the trades up and walk away relying on limits and stop loss. I can't do that! I trade the ftse slightly differently but similar. I trade in the direction of the trend but wait for the velocity of the move to suddenly increase & it often comes to an abrupt stop before the retracement i.e it prints out a few dojis before reversing, there I close the trade irrespective of p/l. Love this site by the way, thanks to all those who contribute. Wish there were more!

 

[PipMonster24]

Thanks, Good question! and difficult to say but the discipline and emotional side are well up there as is, if it goes against your perception of what you thought was going to happen don't wait for the stop loss to kick in, come out for the smaller loss. If it's gone against you it will probably carry on against you! I have trouble with this and still do! relying on lady luck to change things for me. Bad move. The easier more obvious rule is always trade with the trend. I have to sit at the computer while I have trades on which can be boring and time consuming. I know of people who just set the trades up and walk away relying on limits and stop loss. I can't do that! I trade the ftse slightly differently but similar. I trade in the direction of the trend but wait for the velocity of the move to suddenly increase & it often comes to an abrupt stop before the retracement i.e it prints out a few dojis before reversing, there I close the trade irrespective of p/l. Love this site by the way, thanks to all those who contribute. Wish there were more!

If you don't mind can you post some trades? Especially some of the ones you made on the FTSE. I'd really like to see BV's methods applied outside of Forex.

 

[GUSCHER]

Hi, thanks for your reply, to be honest it's not really a strategy I learnt from his book, more my own based on looking how the ftse moves within the same 70tick chart during a trending phase, within a very sudden increase in volume and movement often the trade only lasting a matter of seconds.

 

[Fugazsy]

Thanks, Good question! and difficult to say but the discipline and emotional side are well up there as is, if it goes against your perception of what you thought was going to happen don't wait for the stop loss to kick in, come out for the smaller loss. If it's gone against you it will probably carry on against you! I have trouble with this and still do! relying on lady luck to change things for me. Bad move. The easier more obvious rule is always trade with the trend. I have to sit at the computer while I have trades on which can be boring and time consuming. I know of people who just set the trades up and walk away relying on limits and stop loss. I can't do that! I trade the ftse slightly differently but similar. I trade in the direction of the trend but wait for the velocity of the move to suddenly increase & it often comes to an abrupt stop before the retracement i.e it prints out a few dojis before reversing, there I close the trade irrespective of p/l. Love this site by the way, thanks to all those who contribute. Wish there were more!

Yes the trend, how do you define the trend if I may ask?

 

[GUSCHER]

I would say I would generally use with a chart with a vertical scale of 60 points on a 70 tick chart. Any trend that has mainly same coloured price bars with the pull backs no more than 1 point beyond the 20 ema for a continuous direction for a minimum of half an hour with a 20 point variation. this would give you a trend angle of about 30 degrees. On the ftse you will quite often see a very quick and continuous up/down trend in the same direction as the overall trend for the last half hour or so. I just scalp these very fast price bars for a few seconds or a min or so then close on the sudden halting of the fast trend. Seems to work quite well.

 

[danielkauff]

I would say I would generally use with a chart with a vertical scale of 60 points on a 70 tick chart. Any trend that has mainly same coloured price bars with the pull backs no more than 1 point beyond the 20 ema for a continuous direction for a minimum of half an hour with a 20 point variation. this would give you a trend angle of about 30 degrees. On the ftse you will quite often see a very quick and continuous up/down trend in the same direction as the overall trend for the last half hour or so. I just scalp these very fast price bars for a few seconds or a min or so then close on the sudden halting of the fast trend. Seems to work quite well.

Hi Guscher,

Thanks for sharing your experience.
Would you be so kind as to post chart screenshots of some of your trades?

Thanks again!

 

[BLS]

Week 1 2016 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[thedawgee]

Hello,

I thought I would share a trade taken on the Hang Seng Index. During the Asian hours it often gives a reasonable Volman type setup. I usually have a look at around 2am gmt. Some days there is nothing so I do not enter. At times the build-up is a bit thinner than the Euro. I use the 70 tick chart.

For this one my reasoning was that price appeared to be failing to test back the round number above, after it broke from an 'M' pattern just below the 20,000 level. Hoping then to see price test the 900 level beneath. Upon observing it at the time it appeared that it was not going to get to target, the low on the left that was just before the 900 level made me nervous as it hesitated there.

 

[thedawgee]

Hello,

An ARB type trade on the EU. After seeing price move away from the round number area I entered short.