The Three Methods of TraderAllen.

We are often told that we can only take so much information in at any one time. Remembering numbers longer than 6 or 7  digits is extremely difficult unless you break the numbers down into smaller groups like we do with our telephone numbers. If you were going in to identify someone in a police line up, you would be far less likely to recognise them if you were asked to describe them with as much detail as you could before you went to do it.  There are countless ways we can confuse ourselves with too much information. There are a few chapters in Malcolm Gladwell’s, ”Blink” that do far more justice to this than I could ever do, in describing this sort of stuff, notably, ”The Theory of Thinslices,” and ”Paul Van Riper’s Big Victory.”

To those not completely familiar with scalper traderAllens methods, ignoring his off the cuff Dice trades that appear totally discretionary, he has three methods:

The first is based on Bob Volman’s book, ”Forex Price Action Scalping” (FPAS), where Allen appears also to be using his long term trend direction charts taken from his second method based on Tim Lucarelli’s ”Forex Secrets” at (FXA) as far as I see it, to determine  either the direction to trade FPAS or the amount of account to risk when going short or long in them, (not exactly sure which). In Volman’s book in chapter 11 when analysing the charts from fig’s 11.3 and 11.4, he goes into some detail on the dangers of entering trades with any sort of pre-determined directional bias, even if only on the subconscious level, which directly conflicts with traderAllens usage. Of course this isn’t a citicism of traderAllen’s own trading which appears exceptional but a warning signal to anyone looking to jump in and trade how he does. Forum member Steve wrote in the shoutbox asking if it was possible to trade FPAS on its own and nothing else. Well although not yet successful myself, so take this as you may, but to me it appears that traderAllen is inadvertently adding confusion with too much information and I would say it was absolutely necessary to learn FPAS and absolutely nothing else to start with, because too much information at this stage would be overload. From what I can see there are plenty of other differences as well, such as Volman’s 10 pip stop and his tipping point technique which  greatly conflicts with the 3, 6 and 9 stops, or 5, 10 and 15 stops and the move to break even which Volman says is about the worst thing you can technically do with a stop. Also the entries Allen uses utilising the level II time and sales screen, which appear to be slightly at odds with learning the pre breakout tension set up method of Volman. I will however say the level II screen does interest me a lot as this is where traderAllen says he gained his initial success and there can surely be no harm monitoring it as we learn FPAS as long as we don’t actually use it.

The second method as I mentioned above is FXA. TraderAllen recommends this book and it is easy to see where many of the ideas he trades emanate from. To me it is a terrible book, written almost to deliberately confuse, so you have to go back and pay for more information to get to the bottom of it. To say information overload is an understatement. Read it yourself and see what you think, I’m sure you’ll be left as baffled as me in how to end up devising your own algorithm. Maybe I’m looking at the book from the wrong perspective or maybe I have the wrong perception of what it is trying to say, nevertheless I would suggest a far better book and more complete method on a similar line is Rob Wilson’s ”5 Bullets” which better compliments the FPAS as it is also based around trading the EUR/USD on the 1 minute chart. Wilson uses bollinger bands instead of the moving average envelope, he trades with trend off the mid 20 sma as well as the 62 ema and takes trend direction from longer sma’s and support and resistance off the hourly charts. The book is also very inexpensive and not marketed as some dark mysterious secret and written by a very astute x Royal Navy Commander. I could go on and rip Forex Secrets to pieces but traderAllen has managed to get to the bottom of it, so I would only make myself appear more foolish than my scribblings are already doing. I would like to here more of our moderator’s thoughts on it, as he gets to grip.

The third method is traderAllens news trades. To be fair I’ve not really gone into it in detail. TraderAllen advices not to try until we are already successful. I would add don’t try FXA as well,  until you are successful, but that’s just me. I have looked at the videos and how the rules are described and can’t actually fathom out what is going on. It looks to me like traderAllen is adding far more discretion to these trades and it would take him to possibly write his own Volman like book for me to understand. Sorry!

Well that’s my take on the methods, for what its worth. I’m presently in the last third of Volman’s  book, on the second read with a stack of notes to hand. The more you study this book the more you realise how much information it contains. Again there is too much information for my brain to assimilate, so when my notes are done I will be going back to ”Thinslice” them down and down again to something more manageable.

This journal report was not meant to be a troll. I would hope it may stimulate others to write down their thoughts that I may empathise with or disagree. An interesting thing came up this week about writing down your ideas which may help. Most of what we write is probably of little or no consequence, but if you do write down your ideas in a journal every now and again you might write something that gives you or someone else that ah ha moment, an epiphany. Read this if your interested, James Clears free weekly inspirational letters from Monday. Read this article on  On the other hand you may think that by actually describing your own thoughts you might actually confuse your brain and forget about what it actually was you meant to say!

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