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Profitunity (Chaos) Trading System by Bill Williams

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  • Post #1
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  • First Post: Apr 17, 2007 2:58am Apr 17, 2007 2:58am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Hello traders,

I recently found out chaos system and read the books about it (by Bill Williams). I was convinced by the reading I tried the system for a while...

I seems worthable for me and I didn't find discussions here about this trading system and here it is:

Profitunity System

On the chart apply following tools
Alligator - Three SMAs (13/8/5) with a future offset of 8/5/3 respactively.
Fractals - 5 bars sequence where middle one has highest High / lowest Low and its preceded and followed two bars have lower highs / higher lows
preceded by two lower highs and is followed by two lower highs
Awesome Oscillator (AO) - difference between the 34-period and 5-period simple moving averages of the bar's midpoints (H+L)/2
Acceleration Oscillator (AC) - difference between 5/34 momentum histogram (AO) and a 5-bar simple moving average on the AO

To apply then into MetaTrader 4 platform use these menus
Alligator: Insert -> Indicators -> Bill Williams –> Alligator
Fractals: Insert -> Indicators -> Bill Williams –> Fractals
Awesome Oscillator: Insert -> Indicators -> Bill Williams –> Awesome Oscillator
Acceleration Oscillator: Insert -> Indicators -> Bill Williams –> Acceleration Oscillator


Entry:
When (Alligator) lines are opening we put a buy stop one point above the most recent fractal outside of the lines in trend direction

Exit:
When (Alligator) lines are closing we are closing too.

we stay out of the market when and while lines are intertwining.

Adding:
After the first fractal is taken, we take any and every signal in that direction.

Adding Entry Signals:
AO:

  1. we go long when AO cross zero line from negative to positive values and short on the opposite scenario.
  2. we go long we have 3 consecutive AO bars above zero line last two having higher highs (i.e. AO pulls back for a while)

- opposite for sell

AC:

  1. Go long after two consecutive bars above zero line
  2. Go long after three consecutive bars below zero line -

for short - reverse scenario

________________________________________________________________
That's it. If you need more info - you could read more here
I'll try to answer any questions as best as I can...

  • Post #2
  • Quote
  • Apr 17, 2007 3:03am Apr 17, 2007 3:03am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Hi again

For pictures describe faster than words I'll attache some of the charts I'm using...

Attached is USDCHF Daily setup on Apr 15 2007
Attached Image (click to enlarge)
Click to Enlarge

Name: bw-setup-20040415.jpg
Size: 125 KB
 
 
  • Post #3
  • Quote
  • Apr 17, 2007 3:37am Apr 17, 2007 3:37am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is the chart from yesterday on GBPCHF Daily

be successful on trading!
Attached Image (click to enlarge)
Click to Enlarge

Name: bw-GBPCHF-setup-20070416.jpg
Size: 134 KB
 
 
  • Post #4
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  • Apr 17, 2007 3:44am Apr 17, 2007 3:44am
  •  amaruenterprise
  • | Joined May 2006 | Status: Member | 282 Posts
Hi isto,
This is very interesting.Thanks for posting this it has my full attention of learning more about the chaos theory. What timeframes do you use ? Thanks in advance....
 
 
  • Post #5
  • Quote
  • Apr 17, 2007 4:01am Apr 17, 2007 4:01am
  •  WHTenn
  • Joined Nov 2006 | Status: Member | 1,758 Posts
Isto...thread looking very good. What currency pairs have you used this on?

Good Luck
 
 
  • Post #6
  • Quote
  • Apr 17, 2007 4:20am Apr 17, 2007 4:20am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Hello WHTenn,

Thank you for your interest...
Quoting WHTenn
Disliked
Isto...thread looking very good. What currency pairs have you used this on?

Good Luck
Ignored
I'm using majors but the method is described as univeral, i.e. any pair any market

Wish you positive trading

!i!
 
 
  • Post #7
  • Quote
  • Apr 17, 2007 4:47am Apr 17, 2007 4:47am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is a good incoming setup for EURUSD H4 from today

Let's see what it will become. Which me good luck .
Attached Image (click to enlarge)
Click to Enlarge

Name: bw-EURUSD-setup-20070417.gif
Size: 41 KB
 
 
  • Post #8
  • Quote
  • Apr 17, 2007 5:09am Apr 17, 2007 5:09am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
There is another tool that could be useful

Gator: in MT use menu Insert -> Indicators -> Bill Williams –> Gator

It measues the distance between MA (Alligator) lines. It is useful because it shows you at a glance whether MAs are opening, closing or intertwining.

Trade after it becomes green.

Here is a sample&

when Gator is green - it is time to look around, but while there is not a fractal taken in this direction we do not enter the market

when Gator is red - it is time to take profit and/or wait for the next chance

Hope it will be useful to your trading

!i!
Attached Image
 
 
  • Post #9
  • Quote
  • Apr 17, 2007 6:12am Apr 17, 2007 6:12am
  •  melpheos
  • Joined Jan 2007 | Status: Stochastic pipster | 1,657 Posts
That's too many indicator for me to handle but it seems good at first glance
 
 
  • Post #10
  • Quote
  • Apr 17, 2007 6:33am Apr 17, 2007 6:33am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Quoting melpheos
Disliked
That's too many indicator for me to handle but it seems good at first glance
Ignored
It seems so and also at first reading seems complicated but it is not. The longer you are with it the better it seems to be.

Well that;s my point of view of caurse...

Good luck

!i!
 
 
  • Post #11
  • Quote
  • Apr 17, 2007 11:05am Apr 17, 2007 11:05am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
This is continuation of post #7
EURUSD on H4

USD Core CPI m/m data caused fractal to be taken on 1.3579 so I'm long 1 contract
Attached Image (click to enlarge)
Click to Enlarge

Name: bw-EURUSD-LongEntry-20070417.gif
Size: 32 KB
 
 
  • Post #12
  • Quote
  • Edited 3:26am Apr 20, 2007 3:03am | Edited 3:26am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is a sample of an unfortunate trade

I've made a mistake with stop loss place. After the 6th consecutive red AO bar I should place the stopLoss above the last-1 bar's high and move it accordingly.

Here is final result
Inserted Code
DateSignalPriceSLP/L
19.4.2007 14:44F1.63371.6396-0.0059[color="#ff0000"]-590[/color]
20.4.2007 14:45AC1.63371.6396-0.0059[color="#ff0000"]-590[/color]
21.4.2007 14:48Z1.63391.6396-0.0057[color="#ff0000"]-570[/color]

Total: [color="#ff0000"][b]-1 750 [/b][/color]
Attached Image
 
 
  • Post #13
  • Quote
  • Edited 5:16am Apr 20, 2007 3:18am | Edited 5:16am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is how USDCHF Daily trade (from post #2) develops.

Because of the strong decline - stopLoss is tighten. 69 points profit for the moment.
Attached Image
 
 
  • Post #14
  • Quote
  • Edited 5:16am Apr 20, 2007 4:10am | Edited 5:16am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
USDCHF Daily trade (start is in post #2; there are some explanations in post #14 )
closed by stopLoss with 52 point profit...
not bad, eh?
Attached Image
 
 
  • Post #15
  • Quote
  • Edited 12:39pm Apr 20, 2007 4:53am | Edited 12:39pm
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is a nice looking setup for USDJPY 1 hours chart.

I've missed first three entry points... Hope this will be for good ... (profit)
Attached Image
 
 
  • Post #16
  • Quote
  • Edited 12:39pm Apr 20, 2007 10:04am | Edited 12:39pm
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here's how develops USDJPY H1 trade described in post #16.

All Stop orders triggered. StopLoss moved below the new down fractal.
Attached Image (click to enlarge)
Click to Enlarge

Name: usdjpy-open-20070420-16.gif
Size: 20 KB
 
 
  • Post #17
  • Quote
  • Apr 20, 2007 11:22pm Apr 20, 2007 11:22pm
  •  james275
  • | Joined Nov 2005 | Status: Member | 129 Posts
I have heard that there are many different reasons to take signals. Are you takin just the fractals or the other ones as well. Can you provide rules?

THanks...
 
 
  • Post #18
  • Quote
  • Apr 21, 2007 1:59am Apr 21, 2007 1:59am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Hi james275,
Quoting james275
Disliked
I have heard that there are many different reasons to take signals. Are you takin just the fractals or the other ones as well. Can you provide rules?

THanks...
Ignored
I've tried to describe signals in my 1st post here.

Here under I'll try to summarize them in brief...:
There are 5 tools issuing signals:
One enter the market when 1st fractal (#1) out of the lines is hit again.
Once on the market one opens a new order is same direction when any of the other signals is triggered.
These are: AO(#2), AC(#3), Zone(#4) and Balance Line(#5).

Some of them issue more than one signal.
If more than one signal is triggered simultaneously - corresponding number of orders are opened.

I personaly am taking each of the signal until my money management rules allow this.

I've tried to comment the charts attached in previous posts, pointing where signals are and where stops are.

If you have any questions please let me know - I'll do my best to answer them.

!i!

BTW - this method is described in "New Trading Dimensions" book by Bill Williams.
There is slight alterations of the system in his next book "Trading Chaos" 2nd edition
 
 
  • Post #19
  • Quote
  • Apr 21, 2007 2:43am Apr 21, 2007 2:43am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
I have two pair with open orders for this week.

Here is the state of USDJPY H1 at the end of work-days. (You could see begining of the trade in post #16 and post #17)
The picture does not seems quite promising.

If the last compleated bar closes below Red Line (alligator teeth) - trade must be closed and I'll be kicked out.

Worst is that this will case losses...
Attached Image (click to enlarge)
Click to Enlarge

Name: usdjpy-endofweek-20070421.gif
Size: 24 KB
 
 
  • Post #20
  • Quote
  • Apr 21, 2007 3:18am Apr 21, 2007 3:18am
  •  isto
  • | Joined May 2006 | Status: Forex Trader | 492 Posts
Here is current stage of the other trade before the week-end - EURUSD H4
(you could follow this trade in post #7, post #11 and post #12)

Situation is the same as above (USDJPY) ...
Must exit if last compleated bar closes below red line - somewhere about 1.3682.

The good news is that there is no loss
Expected profit is about 29 000

The bad news is that this is a Demo account

We'll see...

wish you fascinating week-end

$i!
Attached Image
 
 
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