Understanding Price Action by Bob Volman (notes and examples)

From my opinion: There is multiple ways to answer why we are not using any type of indicator? the simplest answer is to be able to depend rely on the price only to justify our entry,exit and risk. in Bob Volman methods we are taught to use false high/low or False break to evaluate how we can use this type of info to our advantage with bollinger band basically you are focused in price high and lows which can send a false signal to enter or to exit a trade.

This movement is quite often analyzed with respect to price changes in the recent past. In simple terms, price action is a trading technique that allows a trader to read the market and make subjective trading decisions based on the recent and actual price movements, rather than relying solely on technical indicators.

let me breakdown why I enter short in attached chart pattern break combi in eurusd to make by point clear:

1. Price failed to reach round number 1.13000 by forming triple top which is an info not a signal to act
2. Price formed what we called pattern break which can lead to double pressure (we need capitalize and gain profit in double pressure situation)
3. If we look carefully we easily see combi candles in the end of the buildup which lead us to act once the price moved below
4. once I sell I'm looking for 3R 3xmyrisk, from where I sell to target there was no bullish candle to the target which also send another message the market could continue to decline.

An indispensable technique when trading Price action, it is drawing trendlines. If you draw a good trendline, the price action model will be more effective, and you will be confident when trading.
because price action is a "reversal", so when the candle hits the trendline and appears "reversed" then you will confidently trade, remember that at that time, the price was close to the bollinger band (above / below).

If anyone still trades by Bob Volmans way heres a study guide I created outlining most of his principles. Still a work in progress. Maybe one day I'll write a more thorough review on his work.

Happy to talk to anyone who is looking to collaborate

hi trinidad316, I skimmed quickly your file, there was no virus inside it just kidding, you need to add a section in trade volumes and Risk reward and put some examples

I took this trade yesterday, I just saw two thing price form a pattern lead to break south price retrace and make another pattern, there I entered the market based on the second patter break.

Range Break out Trade

Pattern Break in nzdusd yesterday

Pattern Break, Continous Setup

Nice pattern break and thanks for the feedback on the study guide

I've recently read Bob Volman first book on scalping and I must say it out a lot of the pullback reversals and pattern breaks into perspective.

I'll also start posting my trades here

Hey clfever & trinidad316
are u guys using the 5min charts?or tick charts?how many pairs do u watch?and what sessions do u trade?
cheers in advance craig

HI
does my previous screenshot qualify as a pattern break?

I read both book and I'm using a combination of both book especially the (Range break, Inside range break, advance range break) with all things in the second book (Pattern break, Pattern break pullback..etc break) and I found the (first break, second break and double Doji) from the first book are not my cup of tea then the most important part is to learn when to skip the trade why is important because it will set the line between breakeven and making money with bob strategy. I think I need to feel the market watch the news and do tons of tons of practice but in the end pressure and squeeze is everything
my pairs here in order (usdjpy, eurusd, gbpusd, audusd, nzdusd, usdchf, usdcad, eurjpy, gbpjpy, audjpy, nzdjpy and chfjpy)

here are very interesting trade classic example: market retrace 50% fibo break out trade in 1hour but see what in the 5 min chart it is squeeze result in pattern break

Hi Craig

I scalp using the 70 Tick Charts and trade the EURUSD(although I have started looking into EMicroContracts and the Cable). We are in a period of low volatility in EURUSD probably due to the low interest rates so not as many 10 pip targets appear throughout the session but still just enough to come out on top.

Your chart is a good read on counter pressure especially considering the conditions on the chart you posted point north. Although the pole itself did not have much technical substance (did not arise from a tight cluster), it should still be respected. To each his own though and if you like trading this 'ascending triangle' pattern go on! Nice bearish engulfing candle and measure move objective of a second leg is nice features to point out. It would have been nice to see another pre-breakout tension bar print below the EMA improving the bearish outlook (maybe even improving your 'tipping point' depending on your trade management rules'.

It could be that your chart is also too wide for me to get an accurate assessment on the conditions. Here is what my chart looks like from todays morning session.

From my study I have learned that the conditions themselves (as proclaimed by Bob Volman) set up the higher probability trades.

For those of you wondering how this pans out on the GBP-USD. I must say after trading it my first day it seems quite doable.

When Bob Volman Wrote his first book in 2011 EUR-USD had an average daily range of 150. Since that time however volatility in FX majors has contracted substantially apart from some obvious outliers (like Coronavirus). EURUSD is now trading at 70 Pip Range a day (smh). Trading it sometimes feel like chipping dry paint. Tedious and outright unnecessary

Here's a good article that explains some of the convergences around inflation and interest rates that offers some explanation.

https://www.nasdaq.com/articles/why-...-it-2019-11-08

Apart from some flexibility in the barrier themselves, all these are quite doable. Granted I did not take all of these but an astute and vigilant scalper could surely capitalize. There is also the fact that the "Cable" is also very sensitive to political and economic news which sometimes causes sporadic price surges. All this translates to is a more watchful eye in key times (US Pre-Open, Market Open, and Data Release), and the requirement of a stop loss.

Red/Green Arrows is a short/longs with good supportive conditions
Grey Arrows are good set ups but unfavorable conditions

** I used the naming convention in both books so you can relate it to whichever book you have read.**c

In screenshot 3, note that i have labeled * as optional. At times i plot the previous day/current day high and low which helps me assess where higher time frames may have placed their stop loss & thus a potential area where the principle of S/R can kick in. Im not a big fan of trading these spikes either but it was clear that the huge spike up caught alot of bulls by surprise. Thus how could you expect one to step in after seeing so many descending tops. This vantage point offered me some insight as to the probability of price retesting that range barrier which has played a key role since pre-US open (see screenshot 1).

The subsequent trade plays in conjuction with the same idea as bulls look to rally and break the range once again (Aggressive)

For those of who you downloaded my study guide, I must say its still quite useful but I scraped a lot of the "fat" like HTF, LTF, correlative properties etc. They are useful but in the 70 tick frame "less is more" and too move nimble you should be "light" on the info. As BV says, "Its not rocket science, its all about gauging pressure"

Any questions let me know. Pardon my grammatical errors. I really do not proofread lol.

-A.T.

pattern break combi chfjpy

Nice PBC on a bearish flag. The flag definitely looks in harmony with the pole. See you have a lot of time frames and pairs up there. What filtering process do you use to eliminate certain markets? Trying to figure out pre-session if the Cable or the Euro is better to trade that morning.

Also curious on what the other EMA is that a 200 EMA?

Check out these 4 quick trades this morning, perhaps the second and third are a bit aggressive but the story made sense.

1. PBC & ABP/PBP
2. BB pullback reversal (notice the squeeze and just above the pbc for late bulls who wanted to pick up contracts)
3. IRB Bounce (anticipation of a higher high considering the higher bottoms
4. IRB Bounce w/ pbc signal bar (at major s/r level)