Bob Volman Price Action Scalping

[stehlikpetrmsncom]

Hi, I just got a really good lesson from the market I want to share.

I entered an ARB trade (attached chart), which would have easily reached the target had I comitted to my original stop. I exited the trade below EMA, because I started to doubt the trade's validity and feared the price would hit my full stop.

Now let's view it from the probability perspective. By moving my exit, I saved myself 3 pips in scenario where the trade indeed failed. In case the original stop would hold and the trade would then go on to the target (as it did), I'd lose 13 pips (3 loss + 10 missed gain). But that means the original stop only needs to hold 1 in 5 times for this strategy to be breakeven. Did the original tipping point have more then 20% chance of holding and sending the trade to the target? That is the question I should've asked myself when in the position.

 

[vanica]

Hi, I just got a really good lesson from the market I want to share.

That's a very good way of thinking about possible outcomes. Thanks for sharing. Indeed, I've noticed what a massive difference every winner makes for results. And I agree that we need to give ourselves a chance to make profit when conditions are supportive.

 

[YMoca]

Good stuff. Your charts show a lot more bars than mine even though your chart is set to 100 ticks. It makes your setups look smoother and clearer. That second setup in particular is way clearer on your chart.

Yeah it's quite different compared to the Pro Real time charts. I've noticed that I get more variability in the number of bars printed at different times. During news releases I get way more bars than the Pro Real time charts, and at other times it seems like it's printing half as many.

 

[cha-ching]

Yeah it's quite different compared to the Pro Real time charts. I've noticed that I get more variability in the number of bars printed at different times. During news releases I get way more bars than the Pro Real time charts, and at other times it seems like it's printing half as many.

Hi YMoca,

I noticed that as well. During news it's almost one bar every 10 seconds. May I ask where do you get data fed into NT? Thanks,

 

[shotgun77]

@YMoca
Who's your datafeed on the 6E?

 

[samich1262]

I took this RB, but I felt like it was pretty aggressive. I probably should have skipped it, as I usually try to stay more conservative. Because it was aggressive I decided to trail very tight.

Positives: There was a nice reversal pattern and round # support. Chart conditions seemed fairly supportive other than around the barrier break.

Negatives: The setup itself before the break did not look very good. The barrier was pretty clear but there wasn't a lot of pressure on the barrier. Therefore, I was afraid that if the break failed, it would get sucked back to the round #. I almost didn't look for a setup here because I thought price might be a little stretched.

After awhile I opted not to allow a ceiling test here. My reasoning was that after price broke the barrier, it stalled and put in a top and a lower top. If price went back down for a ceiling test it would then have to break through two tops. Not really the best tipping management, but given the circumstances, I felt like it was ok.

Had I stayed in longer, I would've seen what was basically a triple top and then been stopped out for 1 pip or break even anyways. I ended this trade with +2 pips after commission. Turned out ok, but I really need to see more bullish tension before the break next time.

 

[YMoca]

cha-ching & shotgun77

I have an account with AMP futures, and use their CQG data feed for Ninja.

 

[YMoca]

stehlikpetrmsncom

I don't have a high enough post count to answer your PM, so I'll answer here.

Main reason I trade 6E instead of Forex, is that I currently only have an account with a futures broker and didn't want to bother opening a Forex account just to try out this method.

I do like the fact that it's easier to incrementally adjust the risk per trade in Forex (to adjust for account size), so I may end up setting up a Forex account in the future.

 

[kevinkdog]

stehlikpetrmsncom

I don't have a high enough post count to answer your PM, so I'll answer here.

Main reason I trade 6E instead of Forex, is that I currently only have an account with a futures broker and didn't want to bother opening a Forex account just to try out this method.

I do like the fact that it's easier to incrementally adjust the risk per trade in Forex (to adjust for account size), so I may end up setting up a Forex account in the future.

One other possible benefit with 6E is that tick counts should be the same with different datafeeds and brokers, since all the data is coming from the exchange. Of course, this might not be true if the data vendors count differently, or filter ticks, etc.

The big drawback I see to 6E is the contract size. With forex mini and micro lots, it is easier to position size. You could use the E7 (mini Euro futures contracts), but during US hours the spread is twice that of 6E, roughly one third of the time. And commissions don't scale down with E7, either.

 

[stehlikpetrmsncom]

One other possible benefit with 6E is that tick counts should be the same with different datafeeds and brokers, since all the data is coming from the exchange. Of course, this might not be true if the data vendors count differently, or filter ticks, etc.

The big drawback I see to 6E is the contract size. With forex mini and micro lots, it is easier to position size. You could use the E7 (mini Euro futures contracts), but during US hours the spread is twice that of 6E, roughly one third of the time. And commissions don't scale down with E7, either.

I don't think the united data feed is a benefit, Prorealtime is really good. Sure, it's not free, but neither is intraday futures data (as far as I know). What could be an advantage though, is volume.

 

[BLS]

One trade for me today. I got a nice little pop but price couldn't hit the 20 level so I eventually moved my tipping point to the range barrier. There was a corresponding trade on the EUR/JPY and I was watching both at the time but then decided to focus on the EUR/USD since I started to see a good setup form.

 

[kevinkdog]

I don't think the united data feed is a benefit, Prorealtime is really good. Sure, it's not free, but neither is intraday futures data (as far as I know). What could be an advantage though, is volume.

You are correct, if you are using Prorealtime, then you are OK. But, you may run into issues if you use your Forex brokers datafeed. All of them will be different.

 

[YMoca]

One trade for me today. I got a nice little pop but price couldn't hit the 20 level so I eventually moved my tipping point to the range barrier.

I took the same trade as you. In hindsight the set-up doesn't look as nice on my chart, but at the time I liked the way price was moving, with the consistent HL's and HH's after it bounced off the bottom barrier.

Took a second trade an hour later. Liked the build-up below the barrier. Trailed aggressively because of the cluster of resistance from earlier in the morning (not shown on this chart)

This second trade highlights another difference between futures and forex. I went long on a break above the 20 level, but on forex the barrier was lower by a few pips, and the high of the move stopped right at 20.

 

[BLS]

I took the same trade as you. In hindsight the set-up doesn't look as nice on my chart, but at the time I liked the way price was moving, with the consistent HL's and HH's after it bounced off the bottom barrier.

Took a second trade an hour later. Liked the build-up below the barrier. Trailed aggressively because of the cluster of resistance from earlier in the morning (not shown on this chart)

This second trade highlights another difference between futures and forex. I went long on a break above the 20 level, but on forex the barrier was lower by a few pips, and the high of the move stopped right at 20.

I was looking at the same trade for your second one. I decided not to take it would have to break the 20 level during the NY lunch hour (didn't seem likely to me). I did not realize at the time that Ben Bernanke was about to speak at an event (12:15 EST) though that would have been a very good reason for me to steer clear of trading for a bit. I generally like to wait for the market to digest news/events a bit first before looking for trades.

 

[cha-ching]

Could you please comment on the BB setup at around 10:44 on my chart?

[Please ignore the previous stupid trade, my only one today.]

Would you have exited at 1.2801 after that double bottom at 1.2798 at about 11:02AM?

EDIT: extracted shotgun77's chart notes on retracement and put them together with some of Bob's charts.

 

[vanica]

Could you please comment on the BB setup at around 10:44 on my chart?

I imagine it was a correct place to exit for three reasons:
1) 50% retracement area of the move up;
2) 00level just below;
3) block-type of price action with double bottom inside.
Considering this setup was more of an aggressive trade (for me if I took it), sharp trailing was advisable.

 

[vanica]

Two trades for me. Feel like I missed some opportunities, but don't really see clear entries and proper buildup in other setups.

 

[shotgun77]

@cha-ching
Nice job on the retracement.pdf

 

[vanica]

Ended up having a really bad day:

 

[cha-ching]

Ended up having a really bad day:

I was paying attention to the second setup as well, but felt that 20 level had not been tested at that time (notice the double top to the left, although the second top was kinda small).

Otherwise the market was too calm during the overlap, as Bob mentioned in his book, most bars are 2 to 4 pip wide. Guess those big guys are heading home for turkeys.