Thanks for the reply. I probably wasn't clear. I don't trade reversals at all. I wait and trade pullbacks after the reversal.
The issue is that the "reversal" often turns out to be not a reversal after all, but just another, deeper pullback. I'll post a chart example next time this occurs for me.
I agree with your point that a reveral requires a convincing move and a struggle that is won by the countertrend traders. Thanks again.
John
Just a quick observation that I've found is that if the largest bar of the trend is at the end and then starts to form the pullback, then to be careful of the pullback. Here the largest bar is at the end, but it's not exactly a trending after the block down.
virtuesoft
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Hi vanica,
In my opinion I don't think it's a good Second Break setup. I would prefer to see a very orderly and preferably somewhat diagonal pullback. In this case the pullback is more of a sideways block of price action. Also, I would like to see no support/resistance blocking the 10 pip target. If you scroll back to around 09:30 you can see the low that was made after the release of the Manufacturing PMI data. I know that this is some way back but it would have been enough to put me off.
In my opinion I don't think it's a good Second Break setup. I would prefer to see a very orderly and preferably somewhat diagonal pullback. In this case the pullback is more of a sideways block of price action. Also, I would like to see no support/resistance blocking the 10 pip target. If you scroll back to around 09:30 you can see the low that was made after the release of the Manufacturing PMI data. I know that this is some way back but it would have been enough to put me off.
Virtuesoft, thank you for reply. I've highlighted the setup more clearly on the chart below. The pullback doesn't look too bad to me. Though I agree the move down looked more like a fake breakout to new lows rather than a strong trend.
Hi vancia,
I would be inclined to not take this SB. I'm always wary of climactic breakout bars, unless there is immediate follow-through. This one is the largest bar on the chart, which would make me pause. Plus, price is now back in the range block before the breakout bar. So I'd wait for more information.
I recall Bob writing that big breakouts will likely return to test the ceiling of the breakout range, which this one in fact did.
John
I would be inclined to not take this SB. I'm always wary of climactic breakout bars, unless there is immediate follow-through. This one is the largest bar on the chart, which would make me pause. Plus, price is now back in the range block before the breakout bar. So I'd wait for more information.
I recall Bob writing that big breakouts will likely return to test the ceiling of the breakout range, which this one in fact did.
John
BLS
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The setup itself looks fine but I don't feel that the market was really trending at that point. What you have is a strong break of obvious support (00 level ) without much buildup which means that it's likely to be countered. At the very least prices would likely retest the 00 area before moving on down but I think the main issue today is the FOMC rate decision/statement that is coming out later today. A lot of traders are probably holding off on trading until that number comes out. I think the moves we've seen so far are a result of economic news releases (ADP Employment Change 12:15 GMT, PMI Final 12:58 GMT; though I can't say this with certainty, pricess move for many reasons). All it means is that you have to be a bit more cautious when trading today.
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virtuesoft
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Hi Vanica,
Sorry, I misunderstood your post. I thought you were referring to the narrow cluster that you highlighted with the red box just preceding the large down bar.
Sorry, I misunderstood your post. I thought you were referring to the narrow cluster that you highlighted with the red box just preceding the large down bar.
BLS
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Again, you have to be more cautious with your trade selection today. With prices moving this slow it will most likely take more buildup/struggle for prices to break free of a 00 area. I would say that your entry point was a tease itself; it would have been nice to see another test of the 20EMA before the break given how slow prices were moving. I think it was possible to move your tipping point to the 96 level after prices failed for a fourth time to break 93 to the downside.
samich1262
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Hi,
I'm new to the forum but have been working on the Bob Volman method for about 6 weeks. Glad to see some other people's thoughts. I think I still have some kinks to work out on a few setups (specifically the IRB and ARB) , but usually identify valid trades pretty well. My main problem is that I have trouble summoning the courage to get into trades. On my first week I won about $300 but then I lost half of it on a bad losing streak. Part of that was because I was using a chart that was set to the 10th of a pip and not increments of 1 pip. It was difficult to find charting software that did this without paying a bunch of money so I thought I could get by for awhile. But that screwed me up and after a lot of researching, I settled on NinjaTrader. I would take range breaks that were not truly range breaks, or in another case, I exited a trade that worked out because I thought it had crossed the tipping point. Later, looking at the 1-pip increment chart, I noticed it had not fallen below my tipping point and then took off. Bummer!
Today I saw a good SB on the GBP/USD chart that I hesitated on and didn't pull the trigger. The main reason was, I wasn't sure if I should take an SB going into that round number zone. However, looking at how bearish the chart was, I probably should have taken it. It did hesitate in the 00 area briefly but broke through convincingly.
For some reason, I also have some trouble with BB setups. I'm right around 50% which is alright I guess. I have trouble identifying or feeling comfortable taking BBs that don't have 5 or more obvious boundary touches. I started taking trades like the one pictured below, but I don't think this is a valid Volman BB.
Many of these work out in a pullback situation, but I question their validity because there are no BBs in the book that only span a 1 pip range. Does anyone have any experience with these or not? Trying to decide whether or not I should skip these.
I'm new to the forum but have been working on the Bob Volman method for about 6 weeks. Glad to see some other people's thoughts. I think I still have some kinks to work out on a few setups (specifically the IRB and ARB) , but usually identify valid trades pretty well. My main problem is that I have trouble summoning the courage to get into trades. On my first week I won about $300 but then I lost half of it on a bad losing streak. Part of that was because I was using a chart that was set to the 10th of a pip and not increments of 1 pip. It was difficult to find charting software that did this without paying a bunch of money so I thought I could get by for awhile. But that screwed me up and after a lot of researching, I settled on NinjaTrader. I would take range breaks that were not truly range breaks, or in another case, I exited a trade that worked out because I thought it had crossed the tipping point. Later, looking at the 1-pip increment chart, I noticed it had not fallen below my tipping point and then took off. Bummer!
Today I saw a good SB on the GBP/USD chart that I hesitated on and didn't pull the trigger. The main reason was, I wasn't sure if I should take an SB going into that round number zone. However, looking at how bearish the chart was, I probably should have taken it. It did hesitate in the 00 area briefly but broke through convincingly.
For some reason, I also have some trouble with BB setups. I'm right around 50% which is alright I guess. I have trouble identifying or feeling comfortable taking BBs that don't have 5 or more obvious boundary touches. I started taking trades like the one pictured below, but I don't think this is a valid Volman BB.
Many of these work out in a pullback situation, but I question their validity because there are no BBs in the book that only span a 1 pip range. Does anyone have any experience with these or not? Trying to decide whether or not I should skip these.
BLS
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If you have trouble taking valid trades then it may be a good idea to lower your volume until you are indifferent. What broker/data feed do you use with NinjaTrader? Did you have to adjust the number of ticks so that your charts in NinjaTrader looked similar to a 30 second chart or to ProRealTime's 70 tick chart?
As for those 1 pip high BB's, I would say it depends on the context in which that setup appeared. It's hard to tell what is going inside a 1 pip BB setup so you would have to ask yourself questions like is the trend strong enough? I guess the best example would be the last chart in the BB chapter. Yes, his setups are larger, but I'm sure he'd still trade those BBs even if they were only 1 pip tall given that strong trend. That first trade he mentions did require some aggression but it wasn't an obviously bad trade.
It is possible that your tick charts need some tweaking to match that charts in ProRealTime/Bob's book.
samich1262
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Thanks for the reply. You are right, I do need to lower my volume. I started out with 1 full lot. When I hit that rough patch I switched to a .50 lot. I am going to turn it down to .25 because I really won't care then. I think part of the problem is, my account is in the positive and I'm afraid to screw up and let it dip backwards. I calculate the odds of my picks in an excel spreadsheet and they work out fine overall, but going backwards after a couple trades would make me anxious. It's just a mental thing, I assume from lack of experience.
I am actually using Fastbrokers as my broker. I fit the buy/sell controls at the very bottom of my screen underneath my Ninja Trader chart. I didn't have to change any features other than setting it to ticks to get it to display like the Volman charts. I may need to stretch the chart vertically to catch some of those BBs better. Fastbrokers seems to have really good spreads, usually around .5 plus like $3 per full lot in commissions. I used to use FXCM but they charged like 2.3 pips on EUR/USD unless you had an account balance of over $50,000. It seemed like the only other brokers offering cheap spreads were overseas and I wasn't really comfortable with a non-US broker, although there are plenty of reputable international brokers out there. I used to swing trade and had about a 20% profit this year with FXCM. However, I don't think scalping would have been possible with FXCM's spreads. It just reduced my odds too much.
One other thing that I do for practice is, I try to scroll through Tick charts one bar at a time and practice paper trading that way. By scrolling through one bar at a time, you don't know what is coming next and it's at least somewhat close to trading a live market. I either go through old charts, or the European session since I haven't been trading that one. I do the US/European overlap most of the time. I have been trying to go through about 5 days worth of charts every day and have seen a big improvement in my trade selection. I also take screenshots of all of my bad picks and look through them. That helped a lot too, because about half of my bad BB trades were the exact situation. I didn't realize it until I looked back through the screenshots. Anyways, I am still learning, but I thought this had been helpful for me and thought it might be a good tip. I'm curious to see what other practice methods people have.
samich1262
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BLS - You were right about tweaking the charts, I think mine was actually stretched vertically too much. Also forgot to answer your question, I run an MB Trading feed through Ninja Trader.
Today looks pretty sketchy so far due to news. Many 70 tick candlesticks with a length of 30 pips. Prices went up and got slammed back down 110 pips in just 5 minutes! Am staying on the sidelines til that clears up. Haven't seen anything that crazy in quite some time.
It is funny, for the past two weeks I've checked the economic calendar every morning before trading on dailyfx.com. This morning the US jobless claims seems to be what set it off, which is rated as medium importance. I had seen stuff with high importance not even stir the water all week. No news during my session had really caused that big of a move until this morning. Just goes to show it can't be overlooked even if it's not on the high importance list, I guess!
Today looks pretty sketchy so far due to news. Many 70 tick candlesticks with a length of 30 pips. Prices went up and got slammed back down 110 pips in just 5 minutes! Am staying on the sidelines til that clears up. Haven't seen anything that crazy in quite some time.
It is funny, for the past two weeks I've checked the economic calendar every morning before trading on dailyfx.com. This morning the US jobless claims seems to be what set it off, which is rated as medium importance. I had seen stuff with high importance not even stir the water all week. No news during my session had really caused that big of a move until this morning. Just goes to show it can't be overlooked even if it's not on the high importance list, I guess!
Hi samich1262,
I started with several setups, but have pared back to just a few, looking for a few good trades each day. I trade DD and SB, and I trade BB, but only in pullbacks. I guess this makes me a pullback trader, which is fine. There are quite a few opportunities every day. I trade futures, not forex.
I tried range breakouts for a while but was trapped out often. So many 1 and 2 tick failures, particularly with the S&P emini. Now the only trading range trade I take is an IRB -- the boomerang version.
Personally, I think it's best to choose a few setups that you are comfortable with and master them. Then gradually add others.
John
virtuesoft
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Hi samich1262,
Wasn't the ECB Press Conference on your news calendar? That is what set off the move. The US jobless claims usually moves the market but nobody really gave a damn about it today as everyone was waiting to hear what Mario Draghi had to say.
The market has been crazy. It can be a little demoralizing to sit on the sidelines whilst there are such huge moves taking place. Especially when it's pretty easy to predict what will happen (e.g. the resistance at 1.24 holding). You need strong discipline to stick to your system during these times. I prefer a calmer and slower market.
EDIT - I just checked the dailyfx.com calendar. It's criminal that they don't have the most important news release of the week. I use forexfactory and I've never had any problems with that.
Wasn't the ECB Press Conference on your news calendar? That is what set off the move. The US jobless claims usually moves the market but nobody really gave a damn about it today as everyone was waiting to hear what Mario Draghi had to say.
The market has been crazy. It can be a little demoralizing to sit on the sidelines whilst there are such huge moves taking place. Especially when it's pretty easy to predict what will happen (e.g. the resistance at 1.24 holding). You need strong discipline to stick to your system during these times. I prefer a calmer and slower market.
EDIT - I just checked the dailyfx.com calendar. It's criminal that they don't have the most important news release of the week. I use forexfactory and I've never had any problems with that.
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virtuesoft
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Hi johnwolf,
It's interesting that you've had more success with pullback setups. I've found the exact opposite. I've been burned quite a few times with pullback setups, but I've had good results with the range break setups. I obviously need to practice more and improve on the pullback setups. It's comforting to know that you're having success with them.
It's interesting that you've had more success with pullback setups. I've found the exact opposite. I've been burned quite a few times with pullback setups, but I've had good results with the range break setups. I obviously need to practice more and improve on the pullback setups. It's comforting to know that you're having success with them.
BLS
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It's nice to hear that I'm not the only one sitting on my hands during this crazy period in the market. These big crazy moves don't happen all to often (I think) so it's okay to not trade them. I guess it's also good to realize the progress I've made these past few months. I used to drive myself crazy worrying about missing out on these big moves but now I can just sit back, watch, and wait for something tradeable under Volman's method.
And samich, I use the dailyfx.com economic calendar to but I've found it to be incomplete and inferior to others like forexfactory. I'm not saying to stop using dailyfx.com's calendar but you should use it as a supplement to forexfactory's (or something else of your choice).
Oh yeah, I use the same method to manually back test Bob's method (scrolling bar by bar) but I've been slacking off in that department recently.
And samich, I use the dailyfx.com economic calendar to but I've found it to be incomplete and inferior to others like forexfactory. I'm not saying to stop using dailyfx.com's calendar but you should use it as a supplement to forexfactory's (or something else of your choice).
Oh yeah, I use the same method to manually back test Bob's method (scrolling bar by bar) but I've been slacking off in that department recently.