Bob Volman Price Action Scalping

[samich1262]

BLS, I read this chart almost the exact same way today, which makes me feel like I'm getting on the right track.

Going over the charts Bob has sent over the past few weeks, I notice some bear flags that don't have a BB, SB or DD entry that I can tell. It looks like on a few (and only on very clear bear flags) he may have just traded using the trend line. Is this right? On the less exemplary flags it looks like he waits for a BB. Ex. chart 3 in the latest batch. There's a couple others in the first 2 weeks too like that. I actually saw that flag last week but I skipped because I thought I needed to wait for a BB to develop at the end, but I saw him do that on week 39 too. Flags are pretty popular, maybe enough people jump on them to warrant taking them if they're clear enough.

 

[BLS]

Going over the charts Bob has sent over the past few weeks, I notice some bear flags that don't have a BB, SB or DD entry that I can tell. It looks like on a few (and only on very clear bear flags) he may have just traded using the trend line. Is this right? On the less exemplary flags it looks like he waits for a BB. Ex. chart 3 in the latest batch. There's a couple others in the first 2 weeks too like that. I actually saw that flag last week but I skipped because I thought I needed to wait for a BB to develop at the end, but I saw him do that on week 39 too. Flags are pretty popular, maybe enough people jump on them to warrant taking them if they're clear enough.

I think for that bullflag on chart 3 (week 40), you can either trade it as a DD or as a BB (break of 98 level, one pip above the high of the DD setup). I don't think he trades with just a trend line but I'll ask.

 

[samich1262]

I think for that bullflag on chart 3 (week 40), you can either trade it as a DD or as a BB (break of 98 level, one pip above the high of the DD setup). I don't think he trades with just a trend line but I'll ask.

Ok thanks. The reason I was wondering is because it was hard to tell exactly whether the buy arrow was pointing at the bar that breaks the trend line or the bar before the break that breaks the high of the 2 dojis.

 

[vanica]

Strong trend during European morning session. Unfortunately didn't manage to get anything out of it.

 

[vanica]

Now I can see a couple of IRBs but I don't feel confident enough trading them, especially this type. The first one appeared in a quite a prolonged trading range where buying/selling pressure looked even to me, with prior trend on the side of bulls and a sequence of lower highs supporting bears. The second one developed too fast for me to even consider it as a possible higher low after double bottom, so I saw it only after the break.

 

[stehlikpetrmsncom]

Strong trend during European morning session. Unfortunately didn't manage to get anything out of it.

Hi, I didn't trade at that time, but from hindsight I think this was a nice entry.

 

[vanica]

Hi, I didn't trade at that time, but from hindsight I think this was a nice entry.

Hey,

I skimmed through the IRB chapter again and noticed that almost all examples look more like tight clusters of price action (with small number of bars and range of the block) rather than tiny ranges within a big range. Agree that this difference is subjective and there were many examples in the new charts where Bob took trades similar to the one you pointed out. Well, hopefully this wasn't the last opportunity for today.

 

[Giorrgi]

Midday 3 trades for me. None of them really worked out but I think overall I'm maybe only one pip down. I think the problem was round number resistance.

The first trade I took was an obvious false break of the range and I scratched the trade instantly only losing maybe 1 pip.

The second attempt at trading the same break seemed much smarter since a nice squeeze had formed. However this still failed, but because of my tipping point placement I did manage to chop 2-3 pip off it. The two small green lines are tipping point placements. I exited on the second tipping point. The main idea was to place these points where the prices seemed to consolidate and offer resistance. I sold on the touching/slight penetration of this point. I would really like you guys to comment on this tipping point placements since I feel this is the area that I know the least in Bob's method.

The third trade was block break with what seemed to be a nice squeeze. The red ellipse is what seems like clustering price action therefore I decided to trail agressively. Again I'd like your comments on the green line (tipping point).

Also, it seems like I'm posting a lot here, expecting answers while not giving much in return! thats because I thought I'd refrain from giving my opinion for now since I'm a newb to this method. but maybe I should change that. Thanks a lot once again!

 

[samich1262]

Midday 3 trades for me. None of them really worked out but I think overall I'm maybe only one pip down. I think the problem was round number resistance.

The first trade I took was an obvious false break of the range and I scratched the trade instantly only losing maybe 1 pip.

Hey Giorggi,

It looks like your 70 tick chart is missing some bars. I had the same problem with NinjaTrader, I'm not sure why, most likely their feed source. You might try setting it to 35 tick or something, and see if it is closer to ProRealTime's chart. Here's what mine looks like:



Anyways, the first IRB looked a little sketchy to me, but we had buyers buying at the 20 level on 5 or 6 separate occasions. So I expected price to go up and touch the 40 level, which it did. I wasn't a huge fan of the way the setup presented itself, maybe it's just me. It does have a decent squeeze, and it's pretty clear at this point that the 20 level is holding.

I hesitated on that ARB that followed. Ended up skipping it. I didn't think the pullback was uniform enough in the current conditions, but it may have been valid. Price stopped right on the 40 level too, and that sort of scared me off, I didn't expect continuation because there wasn't a lot of pressure. I wouldn't hesitate in a strong trend=trend situation, but price action, although bullish, seemed a bit too weak to expect it to start trending.

On the 2nd IRB, I skipped because of that blocky resistance in the 50 level. There is only about 5 pips from the setup so price is going to have to dig through it. The box itself was ok, seemed a little too weak to crack the 40 level, but it did have a nice squeeze.

Other than that, pretty slow today.

 

[BLS]

Ok thanks. The reason I was wondering is because it was hard to tell exactly whether the buy arrow was pointing at the bar that breaks the trend line or the bar before the break that breaks the high of the 2 dojis.

Response from Bob:

when it comes to a flag entry, depending on how nicely it sets up you can apply both approaches, so either trade the break of the line or maybe wait a pip or so to see a BB barrier taken out as well. The difference with the flag trade as opposed to a range break variant is found in momentum.
When you trade a flag as a continuation of a trend, what you try to do is make use of the current momentum. The moment you sense prices to roll over in the direction of the trend again, you can enter straightaway on the break of that flag line if you wish. Sometimes this may be premature, but at least you do not miss the continuation potential. The stronger the trend (relatively speaking) and the nicer the flag, the more a fast entry is doable. Just check all the flags you have seen so far and try to find a repetitive tendency as to why they fail or succeed.
With range break variants or block breaks in relative sideways markets, tension really needs to build up to see the break succeed, which is why you only try to participate in favorable conditions and on seeing nice tension, like a good squeeze. Therefore, it often comes down to a particular spot of entry, which is somewhat less the case with the flag. They come down to catch momentum.

Hope this clears it up a bit. But remember, these are just my personal observations.

I guess I have to be a bit more flexible with Bob's method. I mean, it seems he's made some new observations since he wrote the book. Nothing wildly different from what he wrote - the price action principles still apply - but definitely some tweaks to the kinds of setups that he finds trade-able.

 

[stehlikpetrmsncom]

Is it just me or are most of the setups this week somewhat ambiguous?

 

[samich1262]

Is it just me or are most of the setups this week somewhat ambiguous?

I think Tuesday was pretty easy to read, but Wednesday and today were tougher. The setups weren't as pretty, but if conditions were supportive they still broke out with some strength. At least the IRBs I saw in the morning did. The US afternoon session has been unusually dead though. I usually only pay attention to it if it starts to move. I would rather trade the morning European session but it's like 2am my time. Tried it for a couple weeks, which were my better weeks as of late, but I got too tired!

 

[BLS]

Now I can see a couple of IRBs but I don't feel confident enough trading them, especially this type. The first one appeared in a quite a prolonged trading range where buying/selling pressure looked even to me, with prior trend on the side of bulls and a sequence of lower highs supporting bears. The second one developed too fast for me to even consider it as a possible higher low after double bottom, so I saw it only after the break.

I think the first one is okay the skip. I'm having trouble assessing the pressure even in hindsight.

The second one would be a tough one to spot during a live environment. Remember though, the main reason that setup is trade-able is because of the strong trend move the preceded the RB. There was a potential trend-equals-trend opportunity.

 

[BLS]

No trades for me today. I'm trying my best to assess the overall pressure first before even considering any setups. I trying to avoid getting sucked into bad trades because of focusing too much on the setups.

 

[shotgun77]

Now I can see a couple of IRBs but I don't feel confident enough trading them, especially this type. The first one appeared in a quite a prolonged trading range where buying/selling pressure looked even to me, with prior trend on the side of bulls and a sequence of lower highs supporting bears. The second one developed too fast for me to even consider it as a possible higher low after double bottom, so I saw it only after the break.

I think the second one looks similar to page 288. He calls it a BB at #4 and it is only after a few skipped setups (2 & 3) in that topping action.

 

[stehlikpetrmsncom]

For example I really don't know if three setups have good odds or not. I abandoned the tipping point technique so I didn't get any pips today (panicked and exited both trades few bars after entry). That wasn't wise, because I wasn't committed to those trades, I have to respect the exit technique again.

1) In the first IRB, I like the setup but I don't know if all the tops above should or should not scare me off the trade.

2) In the DD I am not sure if it is not too early to look for trend continuation setups like DD.

I seemed to have temporarily lost the confidence in deciding whether the trade has good odds or not. Of course I already know what I have to do which is study these charts in great detail, but it sure would be nice if Bob decided to send charts this week as well, I'd really like to see how he'd handle these setups.

What do you guys think about these setups, or rather the conditions in which they appeared?

 

[samich1262]

1) In the first IRB, I like the setup but I don't know if all the tops above should or should not scare me off the trade.

2) In the DD I am not sure if it is not too early to look for trend continuation setups like DD.


What do you guys think about these setups, or rather the conditions in which they appeared?

I think the first IRB has good odds. It's like the 6th time that buyers have displayed interest at the 20 level, so a test of the 40 seemed very likely to me. The IRB may not be that pretty but it did give us a squeeze and conditions are supportive. It has an economical stop so it's worth the risk.

I didn't consider trade #2 to have great odds. The entry was economical though. It looked like an ARB but didn't quite test the ceiling of the last arch. However, it does stop on support. Going against it, there's resistance at the 40 level only a few pips away. I thought it was aggressive to take this setup and skipped it. If the market had been trending up before that IRB, I would have taken this as an ARB in a trend=trend scenario. But the market seemed weak today. That combined with possible resistance at the 40 level made this trade seem like it had lower odds.

I am trying to have a game plan for when I enter a trade. Generally I don't like aggressive trades, but sometimes a DD or ARB shows up with a really economical stop, or an RB breaks at an odd spot. For example, I was watching an RB develop on the AUD/USD. The range broke with a bearish breakout at like the .25 level. The 20 level was 5 pips away and while the trade looked valid, it didn't create an enormous wall to prevent price from climbing back inside the range. Therefore if I take that trade and it stalls near the 20 level, I need to exit. My goal right now is to know whether or not I'm going to trail a trade aggressively or let it run free, with room to develop. The first IRB gave a good squeeze and probably had a free ride to the 40 level. If for some reason it started to block near the top of the range, I might look for a place to move my tipping point up, but if it has strong 20 level support, I think it's safe to let an IRB test the breakout level. I hope this makes sense. If it doesn't, I'll dig some chart examples out.

 

[shotgun77]

@stehlikpetr
I would have passed on the first 2 as weak setups.
I like the last boxed block. Its lows sit on prior resistance. Not a great break so maybe you take the pullback as an ARB.

 

[shotgun77]

I wanted a cross reference to quickly look up where I could find an example of a certain type of setup from Volman's weekly set of charts. Warning: I cross reference both bad and good setups.

I show a screenshot and attached the spreadsheet.

 

[samich1262]

Hey guys, I was looking over that ARB today. When I went back through Volman's week 39 charts, I saw one that was similar. Look at these two side by side:





I know we were all split on whether or not it was valid. I just happened to come across this chart while reviewing this evening. Is Volman's example saying that the ARB is risky because of the approaching 40 level in the absence of a ceiling test? Here's a scenario I'm wondering about: Would it still be aggressive if it had 40 level support but no ceiling test?

I assume that if we saw a ceiling test, the 40 level resistance wouldn't be as scary. The potential ARB trade from today did have a nice range barrier to use as support. But with no ceiling test AND 40 level resistance, I ended up skipping it. Do you guys see anything else here that I'm missing?