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TitleBob Volman - Results Edit 2
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Page 1

FOREX PRICE ACTION

SCALPING

an in-depth look into the field of

professional scalping

Bob Volman

Page 137

Forex Price Action Scalping Excerpts

too far out to be of any help.

Just briefly before, I mentioned the rule of thumb of not scratching a long

position when prices are still above the 20ema. This chart shows a nice

exception. Have a look at where the third dotted line is placed. It represents a

lifted tipping point in the DD trade, quite against standard procedure. Why

would it be wise to put the stop underneath that low? To answer this we have

to look a bit to the left and take note of the earlier, and rather distinctive,

double top (3-4). These tops should not keep a scalper from trading the DD

break, given the bullish credentials of the chart, but it is good to not lose

sight of them. They do represent unmistakable resistance.

Let us sharpen our focus for a moment and contemplate the situation in

that top area in detail. Once the tiny pullback doji of (6) gets broken topside,

the market basically has only one option to keep the bullish pressure up and

that is to take out the double top highs of (3) and (4). If not, and prices dip

below the low of (6), then that will print a triple top pattern in the chart

(3-4-5). It does not have to mean the end of this nice uptrend, but to a scalper

in a long position, it would be extremely uncomfortable. The market's

reaction to that technical feat may be quite hefty and therefore it is

recommended to just get out of the way by exiting as soon as the tipping

point low is taken out. In this chart the DD scalper got lucky because the

false break above the highs of the double top took the DD trade to target just

in time before prices dipped heavily south (7).

This example gives to show that the 20ema, no matter how faithful a

companion, should not be looked upon as an absolute. It guides us 90

percent of the time, but every now and then it just has to be discarded on

account of stronger technical development.

A question of conscience: when the bar of (5) matched the highs of the

double top next to it, the DD trade may have been up over 9 pip. Is it truly

wise in a situation like this to wait for the market to take out such strong

resistance for the sake of a few extra pipettes? Yes and no. No, because of

technical considerations. It may not be worth to risk a big part of profit in

strong resistance for a few measly pipettes. But to just let the trade be may

very well serve a purpose of its own. Once a scalper

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Forex Price Action Scalping Excerpts

starts to allow himself the luxury of premature scratching in his daily

routine, he may not be able to control himself in the many instances where

he should just stand pat. After all, it is rare for a chart not to show any

obstacles to a trade. Yet it is very common to ascribe more value to obstacles

than necessary.

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