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Chaos Trading System

Hello Forex 37,

As it is said in the pdf, I have the impression of AO red bar must be bellow 0 line of AO.

Of course, DB bullish bar will be bellow the Alligator... Wich is implicite as you said.

My point of view is that just AO as to be red, no matter if it's above (AO positive value) or below (AO negative value) the AO zero line.

What do you think ?

S.
Quoting starskovsky
Hello Forex 37,

As it is said in the pdf, I have the impression of AO red bar must be bellow 0 line of AO.

Of course, DB bullish bar will be bellow the Alligator... Wich is implicite as you said.

My point of view is that just AO as to be red, no matter if it's above (AO positive value) or below (AO negative value) the AO zero line.

What do you think ?

S.
On the attached chart I have indicated a couple of bullish dbars that occured when the AO was above zero. In each case the AO bar was red - so my guess is that the criteria for those dbars were fulfilled. Although the subsequent waves were not overly long (that second one was followed by quite a choppy market), it was possible to make some pips from the dbars. I guess some dbars will be better than others - that's just a part of their characteristics. I suppose its just something that we have to learn to work with. When they occur in a good place in the landscape they can be very effective as witness the bearish dbar (second chart) that was the initiating event (there's that Butterfly Effect again) for the monsterous downtrend that developed afterwards.

P.S. I haven't forgotten about discussing Zone trading. I will get around to it a bit later.

P.P.S. I like how this thread is beginning to evolve. Lets hope more folks come on board and leave their comments.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: dbar.gif Size: 41 KB
Click to Enlarge Name: dbar2.gif Size: 39 KB
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Hi fishermit,
on the second chart the last red one BEFORE the one you marked is a typical Dbar. On the first chart only the last red bar before the last one marked by you is a Dbar - to my opinion.

Regards

Forex37
Hi Starskovsky,

Did you survive the 200 odd pip drawdown on your 4 hour dbar trade? I see that it has just gone into the money now. Was a bit of a nail biter for a while there.

I just had a silly thought as I am writing this. Converting the dbar into a Balance line trade, that is , not taking the dbar immediately but waiting to see if it becomes a Balance line trade would have negated the drawdown somewhat (see second chart). Maybe we are onto something here that could help us tame those dbars. Would have kept us from chewing our nails too . Will be interesting to watch this one evolve.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: dbar4hr.gif Size: 33 KB
Click to Enlarge Name: balline.gif Size: 34 KB
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Ho ! I forgot to repport about the DD on euro 4H ! No Hermit, I went out way before that ! I was to scary to stay in...
Actually, the price went to exactly 2 pips from the stop loss...

Quote
I just had a silly thought as I am writing this. Converting the dbar into a Balance line trade, that is , not taking the dbar immediately but waiting to see if it becomes a Balance line trade would have negated the drawdown somewhat (see second chart). Maybe we are onto something here that could help us tame those dbars. Would have kept us from chewing our nails too . Will be interesting to watch this one evolve.
I'm not to familiar with balance line trade, but I can see what you mean... Counter trend is sometime scary and to have a filter for the DB might be a very good thing. I wa also thinking of waiting for the AO entry signal... as a confirmation of reversal.


I'm not posting charts thoose days because I'm pretty buzy with some coding for Ninja Trader....

Yes, me too I appreciate very much the way this thread is evolving ! Very interesting people here !
Hope it will continue for a long time.

S.
Quoting Forex37
Hi fishermit,
on the second chart the last red one BEFORE the one you marked is a typical Dbar. On the first chart only the last red bar before the last one marked by you is a Dbar - to my opinion.

Regards

Forex37
Hi Forex 37,

I will have to dig out my Williams books and a do reread just to refresh my memory about what a dbar is. Currently my understanding is that a Bearish dbar must print a higher high but then close within the lower half of the bar showing that the bears have wrestled control away from what started out as a bar with the bulls in control. If I am not mistaken, what is known in price action terminology as a pin bar (James 16 thread) would be as close to an ideal dbar as we are ever likely to see.

The opposite would be true for a bullish dbar. That has been my thinking all along but you have given me the incentive to do a little reread. Thanks. Looking forward to more of your posts.
Attached Image (click to enlarge)
Click to Enlarge Name: pin.gif Size: 37 KB
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Quoting fxhermit
Hi Forex 37,

I will have to dig out my Williams books and a do reread just to refresh my memory about what a dbar is. Currently my understanding is that a Bearish dbar must print a higher high but then close within the lower half of the bar showing that the bears have wrestled control away from what started out as a bar with the bulls in control....
fxhermit,

You are exactly right about that. And it is very similar to pin bars on the james16 chart thread.
This morning I took a trade on cable 30m.
A Bullish DB bar. Angle was good, candle was good. The only thing is the AO was green already. I took it anyway and managed to grab 70 pips.
S.
Attached Image (click to enlarge)
Click to Enlarge Name: $GBPUSD 2008-10-24 (30 Min).jpg Size: 63 KB
Here's my last EU Trade, closed a few minutes ago, hope that can help.
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 17 KB
Hi again,

Here you're the First WiseMan signal Indicator, This indi only show us bull/bear divergence bar, but please keep in mind that the indi don't meet the rule for the AO and the angulation, only show the bar that meet the rules (current bar lower low & close in the upper half /// higher high & close in the lower half)

The Second WiseMan appear after the third green (or red) AO bar.
Attached File(s)
File Type: mq4 BW-wiseMan-1.mq4   3 KB | 1,367 downloads
File Type: mq4 BW-wiseMan-2.mq4   2 KB | 1,244 downloads
Quoting starskovsky
This morning I took a trade on cable 30m.
A Bullish DB bar. Angle was good, candle was good. The only thing is the AO was green already. I took it anyway and managed to grab 70 pips.
S.

Congratulations!! Very nice trade following W1 signal
Attached Image (click to enlarge)
Click to Enlarge Name: gu.gif Size: 16 KB
Another on Eur/Jpy, took 130....
Just don't have the courage to stay in...
Will try to re-enter on another signal.

I hope thoose charts help a bit.

Thank you for everything Bull !

S.
Attached Image (click to enlarge)
Click to Enlarge Name: $EURJPY 2008-10-24 (30 Min).jpg Size: 58 KB
Another good Trade, this time was USDCAD.

In the chart you can see 4 W1 signal, and may be you'll ask you why I only take the last one???, Easy, following the W1 rules, we must to set up a Sell Stop 1 pip below the low of the signal candle (in this case because is a Bearish Divergence), and the only one that trigger the order was the last one (any time that we've a new W1 signal, we remove the old pending order).

I hope that this can clarify something.
Attached Image (click to enlarge)
Click to Enlarge Name: cad.gif Size: 17 KB
can someone post template for this system?
Thank you Bull,
This is a "by the book" one ! Very usefull to see it on a chart !
S.
Yarally,

You can find indicators here :
http://www.forexfactory.com/showpost...7&postcount=50

Enjoy !
S.
Hi everybody, I'll try to show step by step, today trades in EU.

Please look at the chart below, here is the explanation of all trades:

1. Here we've the last Valid Down Franctal, why?? because is the last fractal below the Alligator. Value: 1.2735

2. Our first trade, following the W1 (bullish db) we set up a Buy Stop in 1.2797 with a SL in 1.2756. As you can see this was a loss trade. Total loss -41 pips.

3. After the loss trade we have another one, but at this time is a Short trade. Reason of trade, the down break of the last valid down fractal. Entry point at 1.2734. (1 pip below - see point 1.)

4. A few hours later, we've another W1, again a Bullish db, What we do at this point, we must to set up a Buy Stop 1 pip above the high of signal candle (1.2580), AND in the case that this order will trigger we need to close our Short Open Trade.

4bis. In the next candle, we're going on the oposit direction: Close the short and open the long. Summary of short trade: opened at 1.2734, closed at 1.2580, Profit pips +154.-

5. Now we've a W2 signal, remember that this is only a add signal, we set up a new Buy Stop at 1.2632. On the next candle we've 2 long position.

6. Here we've a good area for close all long position, because the price is on the Jaw and take a look on the Gator, it's closing his mouth, that mind that the movement are lossing force. Then we close all at the Jaw value (1.2736). Sumary long trade: 1) Opened at 1.2580 - Closed at 1.2736 - Profit pips +156; 2) Opened at 1.2632 - Closed at 1.2736 - Profit pips +104.

Total of day: -41; +154; +156; +104 = 373

I hope that this point of view help to somebody.
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 18 KB
Hi Bull,

Very nicely done explanations of those recent trades and a great way to show the effectiveness of this system. It is nice to see your posts and your generosity of sharing. Your posts should be very enlightening for anyone following this methodology. Thanks and great to see you on this thread.
Stay calm, be brave, wait for the signs - Jasper Friendly Bear
Hi Bull perfectly clear ! And so useful.
Thank you very much.
S.
Quoting fxhermit
Hi Bull,

Very nicely done explanations of those recent trades and a great way to show the effectiveness of this system. It is nice to see your posts and your generosity of sharing. Your posts should be very enlightening for anyone following this methodology. Thanks and great to see you on this thread.

Yes, I agree, very nice post and explanations. The effectiveness is even greater, if BWs MM system is followed.
Could we also include the stopline (pink/purple line) which was introduced by BW after TC2?

Thanks

Forex37
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