Forex Price Action Scalping: An In-Depth Look into the Field of Professional Scalping by Bob Volman

Summary

Bob Volman’s Forex Price Action Scalping is one of clearest, most coherent trading books I have ever read. Even though it was not put out by a major publisher, like John Wiley and Sons, it is fast becoming a modern-day classic.

Book Information

Review

I collect trading books like kids [used to] collect baseball cards. In some ways these hobbies are similar: both trading books and sports cards are for the most part almost completely worthless, but once a while one finds a gem worth more than a dozen others.

Bob Volman’s Forex Price Action Scalping is one of clearest, most coherent trading books I have ever read. Even though it was not put out by a major publisher, like John Wiley and Sons, it is fast becoming a modern-day classic.

His general advice is straightforward and prudent. To anyone who has traded intraday, it also makes a great deal of sense. He recommends that one scalp only when the spread plus commission is one PIP or less. He uses a 70-tick chart with only one indicators—a 20-period exponential moving average [e.m.a.]. To him, using multiple indicators is a losing proposition that only adds confusion and doubt. He uses OCO orders [one cancels the other] with a target of 10 pips and a stop around 6 to 7.

He describes trading exactly how it is: a tough job requiring discipline and consistent effort. Get-rich-quick kinds will not necessarily like his assessment that the market cannot be beaten. Rather, a trader can only strive to beat those traders less proficient than himself. In trading, there are no guarantees, so we must trade probability. Those who strive for glory in trading are simply deluding themselves.

His tactics are also clear. His “Double Doji Break” setup requires a pullback to the 20 bar ema and temporary indecision there. His “Second Break” takes a position on the second with-trend attempt to end the pullback. Those trading off of “Block Break” or “lnside Range Break” look for a breakout of a coil. Even if one never trades forex, his “Tipping Point Technique” would still be useful.

His advice on stops is worth heeding. He believes in real stops, not mental ones: the maximum loss on any trade should be determined before the actual trade is put on and should then stand for as long as the position is active. Not exiting an invalid trade, in his view, is the cardinal sin of trading. He points out something that any reader of trading books already knows: holding on to losing trades has been a recurring theme in many trading anecdotes, and this one folly will no doubt continue to entertain the public for as long as there are traders. He says “Respecting a stop can never be a shameful act; disrespecting one, on the other hand is the true disgraceful feat.” Such wisdom belongs on the wall above one’s trading platform.

On the other hand, he does not believe in getting out with a small profit if the underlying logic behind the trade is still valid. He writes as a real trader, not as a professional writer whose income comes from selling books on trading. When he says that the temptation to take early profits can be “excruciatingly strong” but that one should fight it as hard as one can, he writes as if he has resisted that temptation many times–and probably still does (just like the rest of us).

I don’t trade forex, and I don’t trade off of tick charts. But I still consider this book relevant. The only weakness I see is the lack of supporting data to demonstrate the effectiveness of the tactics described. To be fair, most trading books have that same shortcoming. Unlike most trading books, the rest of Bob Volman’s book more than makes up for it.