Well i have nothing much to say here, i just feel it's time for me to start a new thread to share and learn from other BW CHAOS system.. i this is a system that can protect ur trade with good money management from a profitable trading system setup by Bill Williams PHD, the man of words..
If you have any question to ask feel free to post and ask i will be glad to help ........i am giving the book out if u want... wish u good luck in your trading.....
highs and is followed by two lower highs.
The opposite configuration would be a sell fractal. Both fractals (Buy and Sell) may share bar.
Fractals generate the following signals:
* if a buy fractal is above the Alligator's Teeth (the red line) we would place a Buy Stop one tick above the
high of the up fractal;
* if a sell fractal is below the Alligator's Teeth we would place a Sell Stop one tick below the low of the
fractal sell signal.
* We would not take a buy if a fractal is formed below the Alligator's teeth.
* We would not take a sell if a fractal is formed above the Alligator's teeth.
Fractals are valid until they are either triggered or a new fractal in the same direction appears (in this case the previous signal has to be ignored and the pending order has to be deleted).
Fractals are objects of the first dimension. Only after the breakout of the first fractal can the following signals be accepted to open positions in the direction of the first signal. Signals from the consecutive fractals in the direction of the first deal can be used for adding on to the position.
Bill Williams describes the Alligator as being like a compass which keeps your trading in the right direction. The
Alligator helps you spot a real trend and stay out of range-bound trading, which always result in losses. The
Alligator is the combination of three balance lines
Alligator's Jaw (the blue line) - 13-period moving average at the mid price (High+Low)/2, which is offset 8 bars
into the future,
Alligator's Teeth (the red line) - 8-period moving average at the mid price (High+Low)/2, which is offset 5 bars into the future,
Alligator's Lips (the green line) - 5-period moving average at the mid price (High+Low)/2, which is offset 2 bars
into the future.
If all three lines are intertwined, the Alligator is asleep and the market is range-bound. The longer it sleeps,
the hungrier it gets. When it wakes up from a long sleep it chases the price much farther, therefore price
movements are much stronger. When the Alligator is asleep, stay square. Once the Alligator wakes up, it opens its
mouth (Balance lines diverge) and starts hunting. Having eaten enough, it goes to sleep again (Balance Lines
converge), so it's time to fix profits.
If the Alligator is not asleep, the market is either uptrend or downtrend:
if the price is above the Alligator's mouth then it's an uptrend;
if the price is below the Alligator's mouth then it's a downtrend.
The Alligator also helps to determine the character of the Elliot waves:
if the price is outside the Alligator's mouth the wave is impulsive; if the price is inside the Alligator's mouth the wave is corrective.
................................... ................................... .................................