Bob Volman Price Action Scalping

[stehlikpetrmsncom]

I think I'll trade less.I've been trading for about 8 hours a day, but that only leads to overtrading and frustration. I get really depressed if after 40 hours a week I can't show no results in pips. I think one session will be better because I will be able to focus the whole time.

I am having serious troubles with trading trends lately. I thought they're easy and ranges are difficult, but it's the exact other way for me. How do you guys do with trading trends compared to ranges? My success rate with DD's is probably 1 out of 10.

@samich1262: I attached a picture of what I think could be IRB of the barrier bounce version. Personally I've never traded one, I either don't see them or they're not that common. It may also have something to do with the low volatility over the summer, when the range was usually very narrow. Maybe in future, when we see wider ranges, there'll be some more opportunities for IRB's.

 

[samich1262]

@samich1262: I attached a picture of what I think could be IRB of the barrier bounce version. Personally I've never traded one, I either don't see them or they're not that common. It may also have something to do with the low volatility over the summer, when the range was usually very narrow. Maybe in future, when we see wider ranges, there'll be some more opportunities for IRB's.

I had that one marked on my chart too. Well defined barriers, FB to the upside and trend = trend. Looked like a good bet. I need to be more selective with my IRBs overall I think.

Can you attach some pictures of your DD trades that didn't work out? Maybe there's a common factor. Personally I like DDs that have a longer pullback, containing quite a few bars rather than ones that are just say 3 or 4 bars. Those don't seem to work out as often for me unless the dojis are significantly compressed, and then it doesn't seem to matter as long as the pullback % is 40-60. I had a rough stretch with DDs for awhile in August too, but I feel a lot better about them lately. I am having more trouble with SBs than DDs for some reason.

 

[shotgun77]

I went through my DD screenshots. I was surprised how many of them worked out. As long as the trend leg was strong and clean and the pullback fairly clean and diagonal, they seemed to work. The problem was when the DD pullback leg wasn't after a strong trend leg or there was a barrier in the way to target. (By "clean", I mean no false breaks in CT direction.)

I'm still going through my BB screenshots - over 220 of them so it'll take the weekend. I'm making notes in my spreadsheet on each one.

After I finish with the BBs, I'll go through the IRB screenshots. I see IRBs frequently and agree with stehlikpetr screenshot of an ideal "boomerang" setup. I also agree that in narrow ranges, you need to avoid unless the double pressure is obvious to the universe.

 

[shotgun77]

I get really depressed if after 40 hours a week I can't show no results in pips.

Of course, all the trading coaches say not to focus on the PnL. But if you need to earn a living, that is rather unrealistic advice. But maybe you need to set execution goals. For example, if IRBs are a problem, then maybe your goal is to find one "ideal" IRB a day on the chart and go through how you would have traded it.

I am having serious troubles with trading trends lately. I thought they're easy and ranges are difficult, but it's the exact other way for me. How do you guys do with trading trends compared to ranges?

Ranges seem easier to me because where you put your stop is clearer. I think I'll like trends better if I don't take the "10 pip" profit target. I get some bad emotion when the trend keeps going on and on with no chance to get back in. So on trends, I think a larger profit target makes sense or at least a scaled exit. But that is for stocks and FX might not trend as well.

The trends that pose the most trouble to me is the channels. So price is trending in either a broad channel or narrow channel. But there are frequent pullbacks making you think it's not going to continue. Sometimes this is stair step fashion that you can see on the chart. But sometimes it looks like no pattern. Most traders have an onery streak that make them want to go countertrend. So I try to fight that by imposing discipline to follow the slope of the EMA.

 

[stehlikpetrmsncom]

Until now I've only been saving exemplary trades, but being inspired by your studies, I am going to save all trades, so then I can later find out what those that didn't work have in common and vice versa.

From my simple observations, DD after cracking round number fail more often then not. Traders just want to see the number tested, even if it's far away, and their efforts are usually enough to at least stop me out, if not re-test of the number. Another 'type' is a steady trend that isn't really pulling back (just kind of mini-pullbacks all the time) and then when it finally pulls back to the EMA, I guess other traders see it as a weakness, so they decisively counter if after the DD and I get stopped out. The trend then continues more often then not, but I am unable to participate.

@shotgun77 Do you use different targets for trending setups? I am thinking about doing that in certain strong trends.

@samich1262 But how many DD's are there with such textbook conditions? I've been looking through the book and Fig. 7.1, 7.3 and 7.5? Those look just awkward. I'm confused about DD setups mainly because if you try hard enough, you can find them everywhere and I definitely overtrade them.

 

[samich1262]

From my simple observations, DD after cracking round number fail more often then not. Traders just want to see the number tested, even if it's far away, and their efforts are usually enough to at least stop me out, if not re-test of the number.

@samich1262 But how many DD's are there with such textbook conditions? I've been looking through the book and Fig. 7.1, 7.3 and 7.5? Those look just awkward. I'm confused about DD setups mainly because if you try hard enough, you can find them everywhere and I definitely overtrade them.

I'll try to pay attention to round number zones when I go back through my charts later today. What about DDs going into a round #? If it is a nice enough setup, I wonder if they work out more often than one that has just broken a round #. But I'm not sure. I always get leery of SBs and DDs near a round #. I prefer a BB in that situation, but many DDs seem to work out.

For me, if I see even medium blocky action, I don't like to take those DDs. If there's mild resistance it's probably ok. If the DDs before the break have significant compression, say like 1-2 pip DDs compared to 4 or 5 pip bars in the countertrend, I'd say that increases the odds that it can break a little resistance. Plus it is economical. The ones that screw me up are when the countertrends are entirely dojis or only 2-3 bars tall. Even if they're long. I like to see a little bit of countertrend strength at some point. If the countertrend is entirely dojis, even if the 2 dojis before the signal bar are only 1 pip, then I sometimes get stopped out. May still be worth trading in the longterm though, I'm not sure. If a counter trend shows some strength, like some longer bars, and then starts printing dojis that are significantly more compressed, it shows that the countertrend is weakening. Then they may notice the countertrend slowing down and be ready for a break to take their profits. I think they may be more likely to bail after the signal bar in this case than if the countertrend was made up of smaller bars/dojis.

 

[stehlikpetrmsncom]

I'll try to pay attention to round number zones when I go back through my charts later today. What about DDs going into a round #? If it is a nice enough setup, I wonder if they work out more often than one that has just broken a round #. But I'm not sure. I always get leery of SBs and DDs near a round #. I prefer a BB in that situation, but many DDs seem to work out.

For me, if I see even medium blocky action, I don't like to take those DDs. If there's mild resistance it's probably ok. If the DDs before the break have significant compression, say like 1-2 pip DDs compared to 4 or 5 pip bars in the countertrend, I'd say that increases the odds that it can break a little resistance. Plus it is economical. The ones that screw me up are when the countertrends are entirely dojis or only 2-3 bars tall. Even if they're long. I like to see a little bit of countertrend strength at some point. If the countertrend is entirely dojis, even if the 2 dojis before the signal bar are only 1 pip, then I sometimes get stopped out. May still be worth trading in the longterm though, I'm not sure. If a counter trend shows some strength, like some longer bars, and then starts printing dojis that are significantly more compressed, it shows that the countertrend is weakening. Then they may notice the countertrend slowing down and be ready for a break to take their profits. I think they may be more likely to bail after the signal bar in this case than if the countertrend was made up of smaller bars/dojis.

Setups into round number are fine, even better (provided there is rougly enough space for the target to be hit). I just think that crossing round number is such a significant event that higher timeframes monitor it as well and something tiny as DD setup loses it's importance - because scalpers sit on sidelines and higher timeframes don't see it. Few people will try to countertrend downtrend just above round number though.

 

[BLS]

So Bob sent me an email today after checking the thread for a bit. He said that
volume and follow-through has increased but he's still seeing us struggle so he wants to help out with some more charts. I have attached the 22 charts he sent me. The times in the charts are in GMT+2. He hopes the charts will help with some of the confusion we've had with (un)favorable conditions when trading BB's and IRB's . He also said that we are paying too much attention to the setups and not enough on the overall price action.

 

[samich1262]

Wow, this is really helpful stuff. I didn't know he actually checked this. I have a few questions on some of the charts if anyone can answer.

#11: I'm assuming a lack of squeeze or some dojis after the triple top is the reason that there's not a good entry here, does that sound right?

Chart #10 had good squeeze but I never would have seen that break to the upside coming. What I initially see is double top, lower top, lower double top with a FB to the upside. I would have been expecting a bearish IRB. However, from a bullish perspective we see inverted head and shoulders, another bottom, and a higher inverted head and shoulders which creates the IRB. I assumed what creates the bullish IRB is the fact that the bears are never able to push price back to the barrier level. I thought pressure was too even so I know that I am not evaluating these correctly (except boomerang trades, I find those easier). So my question is, at what point do we know that we should be on the lookout for a bullish IRB?

I am starting to see that some of my BBs and DDs are aggressive. They don't have enough pullback. I would often measure them in comparison to the latest leg of the trending move (directly to the left), but not in comparison to the entire trend (or at least the whole trending move after it breaks out of a range). Then I'd end up entering DDs that didn't have enough pullback if that makes any sense. Also, I entered a couple of the DDs that Bob noted were aggressive. They would make it 5 or 6 pips and then stall. I used to trail those very tight unless it came after a bigger pullback. I need to go back to that strategy if I am going to take those, so I was glad he commented on that. Those setups cost me several pips this week. It's pretty awesome that he sent us those charts.

 

[shotgun77]

Wow, this is really helpful stuff

Yea, it feels like Christmas. I was actually thinking of emailing Bob to see if he'd do something like this. Thank you very much, Bob!

#11: I'm assuming a lack of squeeze or some dojis after the triple top is the reason that there's not a good entry here, does that sound right?

That would be my read but no idea if it is right.

Chart #10 had good squeeze but I never would have seen that break to the upside coming. So my question is, at what point do we know that we should be on the lookout for a bullish IRB?

I'm not seeing as much as you. I see the reverse H&S near the left where the range starts. I see that false break to the downside (the head) but of course at the time you would have no reason to see that as a false break.
In real time, I'd see the IRB and see it as possible to break either side. (I see this with BBs too -- the break could go either way.) For the bulls, they have two higher lows after that false break. But in real time, I'm pretty sure I'd not take the trade. I'd need more of a squeeze of the ema or something.

 

[shotgun77]

But how many DD's are there with such textbook conditions? I've been looking through the book and Fig. 7.1, 7.3 and 7.5? Those look just awkward.

I don't like 7.1 either. Too sideways and cluster bottom before pullback. I think the DD strength is the 4 equal lows. Presumably the bulls in the pullback would bail on the break.

7.3 works only because of the very strong trend that came before. He also says on pg 49 that you want the break of the DD break to happen very soon after the piercing of the ema in this instance.

7.5 is a test of the breakout from that sideways consolidation to the left. In real-time, I'd probably call it an ARB. Like you, I don't like its look as a DD but I might trade as an ARB.

It's interesting that a lot of the charts in the unfav conditions chapter shows bad DDs. See 15.3, 15.6, .7, .11, and .14. Seems there's a reason to be cautious with them.

 

[stehlikpetrmsncom]

#11I'd say the tease break with the lack of squeeze together. The actual break goes from the top just like the tease before it which is somewhat confusing.

#10 I see the pressure as very even too, but compare it to picture #3. It's the same technical feat - new low that is calmly bought to the point from which the candle initiated - and there it forms a barrier of small BB.

I also found picture #2 and #5 so freakishly similar I had to check multiple times to see if they're the same picture or not

It's just so awesome that there are so many trades to be found in every chart if you have the knowledge and skill. I'm really glad Bob shared this with us.


Edit: What do you think about that DD on picture #3 prior to 15:00? This is the kind of DD's I lose pips on all the time. What thinking process leads to skipping that? Is it simply the fact that it's the first pullback so it is too shallow compared to the trend?

Or what about that RB/ARB at 15:35?

And the DD at 15:41?

On #7 the DD setup at 9:37?

 

[samich1262]

Yeah, I think he skipped #3 because it's only like a 15% pullback. It's in the average but probably isn't significant enough to bring enough bullish interest yet. I don't think I would've spotted this RB trade at all, it looks tougher to spot to me but I see why it is valid. If we get used to spotting good pullbacks like this though, we'll know to be on the lookout.

The RB/ARB at 15:35 doesn't have enough squeeze so I don't think there's a valid entry there. the pullback after the break of the barrier probably comes back too far to take a DD/ARB entry. It basically pulls back into the range and uses the lower range barrier for support. It has the makings of a good trade if it creates some squeeze, but it doesn't have that or any higher lows.

The DD at 5:41 is tricky. I probably would've taken it thinking it was valid. He must want a little more pullback. I'm interested to see if anyone sees anything else regarding this DD.

For the one on #7, I'm going to guess he skipped it for the same reasons he skipped the BB. I would have thought it was valid too. This is a situation when I wonder if we should be measuring the pull back against the entire bearish move or just the last little leg of the bearish trend. That's definitely something I need to figure out asap!

Also, If a trend starts from an improper range break, I usually skip the first setup expecting a retest or lack of followthrough. But if that first setup does work out and another setup shows up, I am not sure what to do.

 

[shotgun77]

I also found picture #2 and #5 so freakishly similar I had to check multiple times to see if they're the same picture or not

I'm finding the same thing with my review of my BB screenshots.

What do you think about that DD on picture #3 prior to 15:00?

The down leg did a stair step down and maybe that horizontal action negated a good DD setup since they need a diagonal pullback. He also may not have liked the bear close beneath the ema followed by another bear close beneath. At the point where he has the first arrow, I might be thinking it is a reverse H&S to end the pullback down leg. Unknown if that would then make it a BB.

And the DD at 15:41?

On pg. 48 he says if the dojis don't quite touch the ema, evaluate strength of trend. You had a strong up leg but it did have signs of bears with 2 pullbacks/pauses with bear bars. So maybe that weakened the leg up enough to stand aside on the DD. With stocks, I've learned not to take DDs late in a trend. 'Course Bob may have thought it OK and just not marking everything on the chart.

On #7 the DD setup at 9:37?

I'm not seeing the DD here. Which bars do you mean?

 

[shotgun77]

This is a situation when I wonder if we should be measuring the pull back against the entire bearish move or just the last little leg of the bearish trend. That's definitely something I need to figure out asap!

I used to measure the entire move but Bob seemed to do only the last leg. The trick is to define "last leg". The last leg can have a pullback - may be an ARB -- so I do not include that (I don't consider the pullback to be the start). I can't really define it yet -- one of those I know it when I see it. But let's say it has the look of a H&S. So I'd measure from the right shoulder and not from the head.

Also, If a trend starts from an improper range break.

What would you say is an improper range break -- one without pressure and shock runs?

 

[samich1262]

I used to measure the entire move but Bob seemed to do only the last leg. The trick is to define "last leg". The last leg can have a pullback - may be an ARB -- so I do not include that (I don't consider the pullback to be the start). I can't really define it yet -- one of those I know it when I see it. But let's say it has the look of a H&S. So I'd measure from the right shoulder and not from the head.


What would you say is an improper range break -- one without pressure and shock runs?

Yeah, one that breaks without pressure, one that rushes past resistance without respecting it. I'm skeptical about whether or not an IRB is a good enough break to cause the trend to resume because it often lacks buildup at the barrier level to keep prices from returning back into the range. I am not sure how to handle those setups that follow yet so I usually just skip them.

 

[stehlikpetrmsncom]

I'm not seeing the DD here. Which bars do you mean?

Sceenshot n. 7, between 9:36-9:39, there is a clean diagonal pullback from white dojis. It doesn't retrace too far, but not that little either.

I understand the first skip (marked on the chart), but why not to take the following setup? At that moment in time, the trend looked strong.

 

[johnwolf]

I think I'll trade less.I've been trading for about 8 hours a day, but that only leads to overtrading and frustration.

Wow. 8-hour days. On bars averaging 30 seconds, that's about a thousand bars. The thought of it makes me tired.

My main focus is the morning. I stop for the NY lunch hour (actually two hours). Sometimes are nice moves during lunch, but I rarely feel like I'm missing much. Then I might take strong trend setups in the last two hours of the regular session, if they occur. Otherwise, I spend the afternoons studying, analyzing, note-taking, and otherwise trying to learn more.

Why not you try a week with fewer hours and see how you like it?

John

 

[johnwolf]

Thank you, BLS (and Bob), for sharing Bob's charts. I look forward to going through them.

I also appreciate Bob's advice about over-focus on the setups. I think we tend to do that because we feel precise setups are somehow more objective and certain. I will definitely pay better attention to the context this week.

John

 

[stehlikpetrmsncom]

Wow. 8-hour days. On bars averaging 30 seconds, that's about a thousand bars. The thought of it makes me tired.

My main focus is the morning. I stop for the NY lunch hour (actually two hours). Sometimes are nice moves during lunch, but I rarely feel like I'm missing much. Then I might take strong trend setups in the last two hours of the regular session, if they occur. Otherwise, I spend the afternoons studying, analyzing, note-taking, and otherwise trying to learn more.

Why not you try a week with fewer hours and see how you like it?

John

I'll do that from the next week, I did spend too much time 'trading' and too little time studying it. Thanks for the advice