Bob Volman Price Action Scalping

[Mark1979]

Yes, both pairs generally move in the same direction. However, EURJPY seems to move further and faster.

If you have enough room on your computer, you could watch EURJPY, EURUSD and USDJPY. This will give you a triad correlation. Monitoring a triad correlation like this makes it easier to spot specific currency strengths or weaknesses. For example, if EURJPY and EURUSD are moving higher but USDJPY is relatively static, EUR is obvioulsy very strong. Alternatively, if EURJPY and USDJPY are moving lower but EURUSD is relatively static, JPY is obviously strong.

It might not help you that much when scalping with Bob's method. It's not particularly hard to spot when the market is moving strongly anyway. However, it's an interesting correlation and is worth looking at if you're considering trading both EURUSD and EURJPY.

They obviously don't move together all the time but the best trades occur when they do. One can often stifle the movement of the other i.e. a trade sets up on EJ but the EU is hitting support or resistance (a Big Round Number or Daily Pivot). Similarly one can sometimes give me a clue to exit i.e. a fake move and close in one can be a good indciation to close out or move stops in the other.

Generally, therefore,I am only looking to trade when the pairs (in the shortterm) look like they are moving in the same direction and both have no obstacles in the way. Another filter but you only need 10 good trades out of 20 in a month to make a living out of this game.

I use FXOpen (since the beginning of the month) purely because there spread and commission is the best I have seen for EJ. They have been okay so far...

M

 

[virtuesoft]

One can often stifle the movement of the other i.e. a trade sets up on EJ but the EU is hitting support or resistance (a Big Round Number or Daily Pivot). Similarly one can sometimes give me a clue to exit i.e. a fake move and close in one can be a good indciation to close out or move stops in the other.

Generally, therefore,I am only looking to trade when the pairs (in the shortterm) look like they are moving in the same direction and both have no obstacles in the way. Another filter but you only need 10 good trades out of 20 in a month to make a living out of this game.

I agree. Well said.

I might open an account with FXOpen. I'm slightly dubious about them because they have some negative history, but it looks like the Australian subsidiary is highly regulated.

 

[dsenecal]

Took a full -10 pip SL on the first trade of the day. Just a few minutes after, the market exploded like I have never seen, violently swinging 40 pips at a time. Caught about 42 pips on playing the swings and had to close PRT and stop once my daily gain hit 4% and my heart rate hit about 180, lol. Won't post a chart as I was trading way too fast to document anything, and was operating without SL and TP, closing everything manually.

 

[Giorrgi]

So I tried watching both Dollar and JPY today. It correlated remarkably well and at least the first trade would have been easier and would have hit target on JPY.

Anyhow, here are the charts (the lower chart on the first and second attachment is the JPY chart which shows what happened at the exact same moment [they aren't well aligned but both pairs of setups broke at the same time]). I only took trades on eur.

It's a fine line between being +20pips in the plus and -5 pips in the negative. Today that fine line was 1 pip violation of my tipping point (on the 2nd and 3rd trades). My main question is : did I set the tipping points right or was I too agressive? If I did set the tipping point right it means I was simply unlucky today, which is OKAY, but I fear that I've lost confidence and try to exit trades too fast in order to avoid bigger losses.

 

[llpcas]

hesitated on SB chart2

 

[Giorrgi]

Your 2nd trade on the first chart had to dig through the whole range (resistance) in order to succeed, which is why I didn't take it. On the other hand one could argue that once that initial resistance would be penetrated bears would start to flee (double pressure), which is what happened. I would like to have someone else's comments on this though.

 

[virtuesoft]

Your 2nd trade on the first chart had to dig through the whole range (resistance) in order to succeed, which is why I didn't take it. On the other hand one could argue that once that initial resistance would be penetrated bears would start to flee (double pressure), which is what happened. I would like to have someone else's comments on this though.

I think that is just where he exited his first trade.

 

[Giorrgi]

I think that is just where he exited his first trade.

Oh yeah, I just assumed that he exited at the retest of the low before because he noted +6pips.

 

[Giorrgi]

Three trades with charts. And as always a question:

when an RB or BB forms a few pips away from a "magnet level" (00 or 50), is this actually beneficial if a break initiates in the direction of the magnet level? I'm asking this because we know that these levels are actually zones where resistance/support might be more prone to form. Therefore, when one is only a couple of pips away from such a level and there's a clear barrier line, this barrier line can be said to be resistance reinforced by the 00 level zone lying just below (when shorting into the 00 level). On the other hand when prices are say 10-15 pips away from such a level then the magnet effect is beneficial since prices will reach that level and only once they do so will they start to stall.

 

[BLS]

Three trades with charts. And as always a question:

when an RB or BB forms a few pips away from a "magnet level" (00 or 50), is this actually beneficial if a break initiates in the direction of the magnet level?

I don't think it's beneficial. That's not to say that you should avoid it completely but that you should wait for better conditions/setup (for more pros to weigh out that con).

I think I'm getting frustrated with this week's price action so far and that's leading me to take inferior trades. I wish Cyprus would hurry up and get their banks bailed out/in.

 

[llpcas]

too many mistakes. Break even for the week

 

[datamold]

I have just completed 6 weeks of simulated trading of the Bob Volman scalping method. In the beginning I was disappointed with the results I was getting. I was also frustrated because I had studied the book pretty well and thought I had enough trading experience to deem the method worthy.

It was very encouraging to me to be able to compare my trades to those provided by Mr. Volman through BLS. Thank you for that.

My trades to date have been on TradeStation. I have had to use 35 tick charts because they very much mimic the Pro Real Time charts. The charts print fractional pips and thus do not provide the clarity one would hope for. Also my dealing spreads are averaging around 1.7 pip. I chose to do my initial trades this way for two reasons, (1) it is what I had, and (2) If I could produce a positive expectancy under these conditions I could reasonably expect better results with a better charts and a lower spread broker.

Perhaps the best thing I did for myself was take the time to create a journal in an Access database. As I traded I began to gain enough experience to realize that not all my setups were valid so I added fields to my journal to record if the trades were valid or not.

To make a long story short in six weeks I took 92 trades, All in the US morning hours. In their entirety the result is a negative expectancy and somewhat discouraging. However when I filter out the invalid trades the prospects become much brighter.

I believe that 55 of my trades were valid. And those trades produced a win rate of 49% with W/L ratio of 1.25 for a positive expected value of .82 pips per trade. So that’s good enough for me to pursue this endeavor.

I believe that in time I will learn to only take valid trades . And I believe that the clarity of the Full pip charts will help me to do that. I also believe better dealing spreads could lower my average looser from 8 pip to 6, thus improving the W/L ratio.

Along the way I realized there was something to be learned from almost every trade, so I added a “Lessons Learned “ field to my journal and went through my trades and recorded them.

In appreciation to all who contribute to this forum I would like to share my lessons learned and will attach them to this post.

 

[matty_dunn]

I have just completed 6 weeks of simulated trading of the Bob Volman scalping method. In the beginning I was disappointed with the results I was getting. I was also frustrated because I had studied the book pretty well and thought I had enough trading experience to deem the method worthy....

Thank Datamold for being so open and generous with your experiences and understanding. I feel like I'm in a similar situation in that I am yet to take ONLY valid set-ups with real consistency. However, I too have had encouraging results and firmly believe I can become consistently successful. For me it is less a matter of whether or not the set-ups provide an edge, as I am sure they do. It is more a matter of working on myself so that I only act when necessary.

In Bob's words - he acts when action is required; meaning he focuses on taking "non-debatable" trades, of which there are many in any given week. I think it really is a matter of patience and mindfulness. And not letting a loss, or string of losers for that matter, affect your next trading decision.

However, this has been the hardest thing for me - executing the plan as flawlessly as possible. But with each day I learn more - about what to do and what not to do, about how to realign myself after a loss, or win for that matter, and avail myself to the next tradeable event.

Like Bob says, it's all about developing confidence that you can do it.

 

[matty_dunn]

It would be great to hear from others about what they are going through mentally and emotionally as they attempt to become better traders and how they deal with set backs and so on. Any techniques used, exercises, book recommendations; basically anything and everything that can help.

I know this is primarily a thread to discuss Bob's scalping techniques but I think this stuff is probably more important than the technique itself. Anyway, would appreciate any comments.

 

[Giorrgi]

Heavy burn this friday. I was right about the direction of the market being bullish, throughout all of my charts, the setups seemed OKAY and yet the timing was off.

The first trade especially is very frustrating in hindsight. Check out the chart. A nasty false break took out even the largest tipping point (for no apparent reason) and the prices took off nicely (without printing a setup). Anyone would've taken this trade?

The second setup is a DD and well, the momentum of the trend wasn't sufficient.

The last trade is a small RB facing somewhat unfavorable conditions to the left, I probably shouldn't have taken this.

---

The learning curve is steep. But here's what I tell myself everyday when I get discouraged: it takes 4-6 years to get a degree, another 4-5 years to start becoming really good at what you do. It would be a big mistake to assume that I can learn how to trade well in less than a year. And let's not forget that, at least in theory, when one reaches Bob's level, this activity can be much more lucrative than any day job.

 

[BLS]

Week 12 charts added
https://www.dropbox.com/sh/1amxmi9af0fk6ej/otxvkh6srN/2013

 

[jclaytonf]

It would be great to hear from others about what they are going through mentally and emotionally as they attempt to become better traders and how they deal with set backs and so on. Any techniques used, exercises, book recommendations; basically anything and everything that can help.

I know this is primarily a thread to discuss Bob's scalping techniques but I think this stuff is probably more important than the technique itself. Anyway, would appreciate any comments.

Hi Matty,

I have come to the same conclusion - that the psychology is more important. I have read around a lot on trading psychology, sports psychology and poker, but I keep coming back to Mark Douglas's "Trading in the Zone". The other material has bits and pieces that I have found helpful, but there are also some negative aspects from a trading perspective. Douglas, on the other hand, seems to be perfect for what we try to do with our trading (i.e. Volman-style scalping). His first book, "The Disciplined Trader", in my opinion, is a poor cousin to "Trading in the Zone". He also has some CD and DVD packages available on his website, which I have purchased and find very useful (not cheap though!).

I have just re-read "Trading in the Zone" and strongly believe that to create consistent results I need to work the psychology more than the trade entries. My personal issues, in the first instance, are related to self-confidence and maintaining focus as obstacles to achieving consistency as a trader, but I am also aware of fear (and sometimes euphoria creeping in).

I think your idea of sharing more on the mental and emotional aspects of trading is a good one. This is a lot more lonely than I expected when I made the commitment to trade full time, and, to be honest, it is sometimes terribly boring!

Cheers, Jeremy

 

[matty_dunn]

Hi Matty,

I have come to the same conclusion - that the psychology is more important. I have read around a lot on trading psychology, sports psychology and poker, but I keep coming back to Mark Douglas's "Trading in the Zone". ....

Thanks for your thoughts Jeremy. I too have found "Trading in the Zone" particularly useful. And after reading Bob's book again, and highlighting everything to do with psychology and the trader mind, I have found there is a tonne of no-nonsense wisdom in this field. His book really is a gem, on many levels.

The "boredom" thing can be an issue for me at times also. But I keep reminding myself that practicing patience and what can seem liking doing "nothing" is actually part of following a plan. And trying to reinforce that it is not about trading, but about making money.

I have also found some of Brett Steenbarger's books useful, particularly "Enhancing Trader Performance" and "The Daily Trading Coach."e gives many practical exercises to help change habits and sustain new ones.

 

[datamold]

I have been struggling to see the W’s and M’s that Bob sees. At times they are obvious and sometimes I just don’t see them. In reviewing his week 12 trades this morning there was one Ww variant in particular I could not see. So I opened the file in a photo editor and started playing around with the paint tools. I sort of just free hand followed the price with a broad brush and viola! It popped out at me. My take away from this is that Bob’s trained minds’ eye probably sees these things as clearly as the paint brush painted this one. What do you think?

 

[Traderallen]

I'm going to attempt to attach a video of my first trade this morning this was a live trade that I ended up closing out for six pips profit. The trade started out as a double Doji. Just for little clarity I enter the short position at the yellow box the top blue line with my stop and the bottom blueline was my target area. I close the trade early at six pips profit instead of 10 because the price action of the last candle suggested a move up. If this upload to photo bucket works now attempt to post some better quality videos of winners and losers as they occur. In an effort to save megabytes I did pause the video recording in the middle of the trade, but you should still be able to get the basic idea of my plan.


6pipEUtrade_zpsfe33770a.mp4 Video by traderallen | Photobucket