Bob Volman Price Action Scalping

[Giorrgi]

Two trades.

The second one was a little bit premature. One thing that seems to happen to me is that I'm too careful with IRBs/RBs etc and not careful enough with continuation BBs after a pullback or a consolidation mid-trend. I think these BBs, at least in my case, require a better assessment of the conditions AND of the setup. On the other hand RBs seem to break all over the place without much trouble if the setup fits the basic requirements.

That is of course just my observations based on the trades that I take.

Today I was still sort of affected and when I imagined myself posting these trades before coming back home it was unpleasant thinking that I'll have to trade again tomorrow. But this forum really helps !

 

[BLS]

That brings me finally to the reason for this post (other than to encourage others). With the psychological goal of being consistently profitable I have been toying with the idea of profit and loss limits. That is to say I wonder if my trading plan should instruct me to stop trading after X pip in loses or X pip in winners. There are countless variations of this and I’m not sure it is wise to even think this way. That is to say, just take what the market gives you.

For example one idea I have is that if my first trade of the day is a 10 pip winner maybe I should quit right there. After all my goal is only 20 pip for the week. Another idea is to quit trading for the week when I am either up 40 pip or down 30 pip. Or perhaps daily limits are in order?

Anyhow, does anyone care to share their thoughts on that?

I think limits are helpful if you have a tendency to over trade. I know Volman says to trade every valid set up you see but I can't trade like him yet so I set limits for myself when I start to get losers. I tell myself to take a break if I've manged to take 2 or 3 losers in a row in a short time since that usually means I'm not paying enough attention to the overall picture. I use to break to get a fresh look in the market otherwise I get into this nasty pattern of revenge trading.

I have thought about using a 10 pip per day limit as a means of preserving my earnings but since I'm not able to trade the first half of the European session and usually not much happens during the second half of the NY session I just take what I can get. I do lose some focus if I get a 10 pip winner early in my session that I sometimes miss or skip good trade but that may have to do more with the euphoria felt from winning than anything else.

Two trades.

The second one was a little bit premature. One thing that seems to happen to me is that I'm too careful with IRBs/RBs etc and not careful enough with continuation BBs after a pullback or a consolidation mid-trend. I think these BBs, at least in my case, require a better assessment of the conditions AND of the setup. On the other hand RBs seem to break all over the place without much trouble if the setup fits the basic requirements.

That is of course just my observations based on the trades that I take.

Today I was still sort of affected and when I imagined myself posting these trades before coming back home it was unpleasant thinking that I'll have to trade again tomorrow. But this forum really helps !

That was a super aggressive exit on your first trade though I can understand the reasons why you bailed there. You probably didn't want another loser after yesterday's session. That's understandable but you should be aware of the reasons of why you decided on an aggressive exit like that. You shouldn't take your demo account too seriously since you're still in that trial and error mode (aren't we all?) so you're trying to find out what works and what doesn't. Don't take it too hard that the demo account is in the red.

I can tell now that following the tipping point method will serve you better mentally since you'll avoid agonizing on where to best exit.

Or maybe you were genuinely concerned about that cluster. But if it was for a reason like something I mentioned above then it's something you should be aware of so you can work on it.

No trades for me today. My brain kind of checked out after 14:00 GMT when price just took a nose dive without a significant pullback. I don't like these kind of moves since I have a habit of interpreting it as "missing out" and either end up feeling bad or take inferior trades to get in on the action.

 

[ReinLudwig]

Thanks, Bill - I know about the scalability of time frames. I used to trade with 5 min and looked at the overall market structure with the 15/30 min TFs. I was more interested in knowing if someone has experience with Bob's 7 setups on a conventional time frame. I find ticks difficult to compare, since they depend a lot on your broker and datafeed. Thanks for the feeback! R

 

[ReinLudwig]

There seem to be a lot of things going on in your head while you're trading. I can't guess exactly what your thoughts are but I have some advice that might help:

1) Clear your mind. I've had trouble focusing on the "present" (the charts) with my mind wandering about and thinking about past mistakes (I screwed up so many times) and worries of the future (will I ever turn this into a consistent income that I can live off of?). What I've been trying recently is meditation.
You can find an example of the technique here. You want to be able to focus most (if not all) of your attention to the present price action. Do this before you start trading. If you find your mind wandering a bit more than you'd like or just losing focus during your trading session then focus on your breathing a bit to help bring you back. I've found this to be helpful so far.

2) Make a list of trading advice to read off of during or before your session.
Are you finding yourself too focused on the outcomes of your trades? Then write something down like "I have no control over the outcome of any particular trade, skipped or not" or "I do not expect to win on any particular trade since the outcome is random".
Do you find yourself worried about losing or missing out? That probably means you're interpreting the price action as something threatening. Remind yourself that whatever price does is just information. Those price bars aren't rewarding me for being right now are they punishing me for being wrong.
A lot of this is covered in Mark Douglas' "How To Think Like a Professional Trader" DVD series (thanks for recommending it jclaytonf). Volman does cover a lot of this psychological stuff in his book but Douglas explains in more detail with examples that one can more easily relate to. I also tend to focus too much on my own performance that I forget some of the useful advice I've come across so watching that DVD series served as a useful reminder.

3) I hope you've been keeping a trading journal of sorts. Go back and read over your entries. Try to identify some problems you're having, just anything that seems to lead to trading errors. Are you getting distracted with web browsing? If so try to set a daily goal for yourself to not web browse during your trading session then grade yourself from A to F on how well you achieved this goal. You can use daily goals to work on improving yourself as a trader.

I hope you found the above somewhat helpful. If not, try to talk more about what you're experiencing while you're trading and we'll see if we can help. If you have the time I would highly recommend watching the Mark Douglas DVD. Do me a favor and remind me of this post when my account takes another dip and I start feeling like crap again because I tend to focus too much on my performance/account balance that I forget about all this useful advice.

Excellent, advice, BLS! Thanks for sharing these points of wisdom. I certainly have difficulties with concentration. I often catch myself web-browsing, and checking out my trades on different time frames. Perhaps a good exercise is to force yourself to observe a chart for 60 minutes, nothing else!

 

[TRADERUS]

I use IB to trade and ProRealTime to chart - they're spot on - it's like identical data.
No problems.

hi, I just checked it better.

I use the prorealtime chart 70 tick and the EUR.USD-CASH-IDEALPRO on Interactive Brokers.

Do you use Limit orders on Interactive Brokers ? I know the book says just enter with market orders, but since Interactive Brokers is a commission broker and not a pip markup broker there is no problem to place limit or stop limit orders to enter. Why not use it ?

Thanks

 

[BLS]

Do you use Limit orders on Interactive Brokers ? I know the book says just enter with market orders, but since Interactive Brokers is a commission broker and not a pip markup broker there is no problem to place limit or stop limit orders to enter. Why not use it ?

Thanks

Volman says not to use limit order because:
1) It may be a hassle to get the limit order in on time when price is moving fast.
2) Price may do a limit move and "skip" your limit order level (no bids or offers at that particular level)
3) There may be a temporary mismatch between the PRT levels and you broker's level. Say you're looking to trade an RB at the break of 1.3000 and you see good build up leading up to a squeeze so you set a limit order for 1.3001. Your broker may hit 1.3001 and execute your limit order while the PRT chart doesn't show a break at all. Who knows, maybe the spread happened to widen a bit at that particular moment. Price could travel all to the bottom of the range. This becomes a problem of which level, to the pipette, to set your limit order for to avoid this kind of situation.

These are potential problems but of course do not apply to all brokers. It's up to you to determine if these are going to be problems or not. I think it's just simpler to stick to market orders. That said, I do move my stop orders to remove some of the pressure of bailing out of a trade but I still aim to use a market order for the close. Say I trail my tipping point to 1.3000. I may move my stop to 1.2999 or maybe 1 or two pip lower so I won't lose too much if price moves quickly against me and I can't get a market order in time. It's somewhat nerve racking for me when price sits on my tipping point for a few bars because I have to have my mouse pointer on the close button constantly ready to exit so I find moving my stops (when I have the time) helpful in calming me down. I do run the risk of being stopped out early should spreads widen but I'm willing to take that chance if it means keeping my calm most of the time.

One trade for me today. Price just seemed to be all over the place so I couldn't really get a good read on the price action.

 

[Giorrgi]

There was one pretty good setup that I didn't take (RB in the beginning of the chart) and another one that was more of an "experimental" trade from my part. Didn't work and I probably shouldn't be experimenting yet.

 

[TRADERUS]

Does anybody know what the datafeed is exactly from prorealtime ? Is it the FXCM datafeed ?

Thanks

 

[Giorrgi]

Two trades.

The first chart screams "00 level rejection" in hindsight, but I've never faced this exact type of situation before (tops near the 00 level), so I added this as an entry into personal notes on what to avoid. The two tops on the left should've been interpreted as 00 level rejection instead of "tease breaks" which I thought they were.

The second chart I didn't trade but it poses a question. The tipping point here would've been 9 pips, do we take these types of trades ? I think something like 8 pips was the max and I haven't had many positive results with 8 pips either because that usually means that the entry isn't well built up and in order to exit you have to reach pretty far into the range (whereas with a smaller tipping point, it means that the last bounce off the EMA was near the range, therefore the build up was superior).

 

[BLS]

Does anybody know what the datafeed is exactly from prorealtime ? Is it the FXCM datafeed ?

Thanks

You can check for yourself if you download FXCM's Strategy Trader which has tick charts. I checked about a year ago and they weren't the same then. I don't know what PRT uses for the feed but they say it's an aggregated (and unfiltered) tick feed, whatever that means.

Two trades.

The first chart screams "00 level rejection" in hindsight, but I've never faced this exact type of situation before (tops near the 00 level), so I added this as an entry into personal notes on what to avoid. The two tops on the left should've been interpreted as 00 level rejection instead of "tease breaks" which I thought they were.

I don't see anything that screams "00 rejection" on the chart though I guess a tricky barrier under the 00 should warrant caution. I probably would've taken those trades.

The second chart I didn't trade but it poses a question. The tipping point here would've been 9 pips, do we take these types of trades ? I think something like 8 pips was the max and I haven't had many positive results with 8 pips either because that usually means that the entry isn't well built up and in order to exit you have to reach pretty far into the range (whereas with a smaller tipping point, it means that the last bounce off the EMA was near the range, therefore the build up was superior).

If you're not comfortable with risking that much then don't take it but do make note of them. I personally would not risk 9 pip unless the conditions were really good.

Two trades for me.

E1: There is a little clustering above the 20 level but I didn't think it was a problem. Price retraced the earlier bull move nicely. I can sort of make out a SHS.

E2: I really wanted to trade this. Price was bearish for the last 2 hours. After a double bottom in the 80 level bulls tried to crack through overhead resistance to test the 00 but failed. In hindsight the lower barrier line wasn't that solid but the dojis that formed around it looked like the bears were squeezing the bulls by keeping price under the 80. I bailed a pip early because I broke my rule about not looking at my pip count while in trade. I saw price get close to my target a few times and fears about another losing trade crept into my mind. Have not had that happen to me in awhile.

 

[Giorrgi]

BLS - I also was closely observing your last trade. The hard part was to look for a Mm pattern preceding the ARB buildup because there was no clear RB line either, so the Mm was kind of hanging in the air. Nice catch anyhow.

Tough week. The weekend is going to be a nice point to "reset".

 

[BLS]

Week 16 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

 

[matty_dunn]

Week 16 charts from Volman:
https://www.dropbox.com/sh/1amxmi9af0fk6ej/VA5_ZrjQF1

Thanks Bob and BLS!

And Bob, I really appreciate all the extra notes. It helps considerably when reviewing the week and learning from the price action to inform future decisions.

 

[LoSparviero]

Some trades this morning...last DD to skip....

​

 

[Giorrgi]

LoSparviero - do you consistently take these types of trades in realtime or are these in hindsight ? They all seem kinda risky to me.

 

[LoSparviero]

LoSparviero - do you consistently take these types of trades in realtime or are these in hindsight ? They all seem kinda risky to me.

All the trades I post are real time trades (yes the news trade was a risky one but I love news trades, but they're far from BV method...)

the last DD was foolish of course...

sorry in the img below the two skip setups are the IRB before the range breakout. Very unsure on what to do...I skipped both.

 

[yossy]

Hi,

I have been reading through most of this thread. I have also read the book a couple of times and I have a basic question and grateful if anyone can answer. I hope to apply the basic principles of Volman method but to a different market index using 1 min charts. One sees the same setups in most markets.
How do I find a stop level corresponding to 10 pips max stop that Volman uses. Similarly, how should one go about deriving a profit target corresponding to 10 pips of EURUSD that Volamn uses.
Thanks.

 

[LoSparviero]

Hi,

I have been reading through most of this thread. I have also read the book a couple of times and I have a basic question and grateful if anyone can answer. I hope to apply the basic principles of Volman method but to a different market index using 1 min charts. One sees the same setups in most markets.
How do I find a stop level corresponding to 10 pips max stop that Volman uses. Similarly, how should one go about deriving a profit target corresponding to 10 pips of EURUSD that Volamn uses.
Thanks.

I think only statistics can help u. You must take lots of records and then on a statistical base find the correct amount of pip for the tp and the sl for the specifical instrument u trade. This is not true only for BV fx scalping but for every strategy (IMHO)

 

[BLS]

Didn't feel like posting my trades from early this week because I felt frustrated with the lack of action on the US sessions so far but I guess I should post them now.

4/22: Zzzz...not much happening
4/23/2013:
Looks like I was trading into a 50% retracement of that huge bear move from before 01:00 on my chart. Seems like an exceptional case though so I'm not going to worry too much about what happened that far back in my future trade. I still thought it was interesting though.

4/24: There's no visible chart resistance around the 80 level but trading into it can still be a problem. It looked like the bears fenced off the bulls under the 00 so I figured the bears had a good chance of cracking the 80 level. With the risk at 5 pip this trade seem doable.

4/25:

Interesting pattern but I just wasn't sure if the context was favorable at the time.

I had some doubts about this one working because I saw that this was hitting the low of the day (from about 5 hours back). I just told myself that I have to base my decisions based on the current chart (and not be reminded of 4/23's trades). I found the conditions favorable and the setup nice. I told myself to expect a random outcome and just go with it.

 

[LoSparviero]

Some trades from the london morning...