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Bill Williams Profitunity Chaos Trading 440 replies

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Attachments: Profitunity (Chaos) Trading System by Bill Williams
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Profitunity (Chaos) Trading System by Bill Williams

Hi larry,
Do you just trade forex with Bill's profitunity or other markets too? How has it worked out for you in forex? Thanks in advance for your reply....
Quoting dlftrader
ISTO:
Re post #58. Didn't you mean "ZT" (zone trade) rather than "BL" (balance line) re Williams saying take no more signals after a 5th consecutive green AO bar?
...\larry.bye
Yes sure, sorry
Quoting amaruenterprise
Hi larry,
Do you just trade forex with Bill's profitunity or other markets too? How has it worked out for you in forex? Thanks in advance for your reply....
I have been trading the spot Forex almost exclusively since I discovered it in 2004; but prior to that, I traded the futures markets. I was introduced to the Profitunity methodology and strategies in late 1998 or early 1999 as I recall. As a futures trader, I used only EOD data and traded off daily charts; and I traded the Profitunity way pretty much as it was spelled out in Bill Williams' second book, New Trading Dimensions. The only time I use its "pile it on" approach in my Forex trading is when I have been lucky enough to catch a new daily chart trend that reversed after getting hit by the "5 magic bullets" that ended the previous trend. I am mostly an intraday trader now, but there still is a lot of Profitunity in how I now trade. Yes, Profitunity has been very good to me. I personally think that to use all of its entry signals and exit strategies, one needs to be trading it in the daily time frame.
...\larry.bye
thank you dlftrader.
Here is something that may interest some of you re the 1st and 2nd Wise Men that were introduced in Trading Chaos, 2nd Edition. They may be more useful as filters than entry signals. One of my trading strategies for the M5 time frame is to nest a buy order above the VFH when the AO bar is green, and to nest a sell order below the VFL when the AO bar is red... whether or not the AO bar is positive or negative. Could more pips be captured if I required any entry signals generated by the 1st or 2nd Wise Men to have been hit before nesting a 3rd Wise Man order? In other words, would a signal failure by the 1st or 2nd Wise Men keep me out of more loss or low profit trades? I started looking at this because I am reluctant to enter a trade on the wrong side of the Alligator... most of us old-time Profitunity disciples likely are having trouble with that!
...\larry.bye
Another loss in USDCHF H4 (posts #48 and #59). Stop Loss triggered at 1.1105 and I've got
total: -1 350

Inserted Code
DateSignalPriceSLP/Llots:
01.5.2007 03:55DB1.11071.1105-0.00021
01.5.2007 20:05DB1.11111.1105-0.00061
01.5.2007 20:05F1.11161.1105-0.00115
02.5.2007 04:12AO, AC, Z1.11231.1105-0.00184
Evrything today is negative
USDCHF (post #58) quickly kicked me out.

Inserted Code
[b]DateSignalPriceSLP/Llots:[/b]
01.5.2007 17:21f1.21091.21300.00211
02.5.2007 07:19f1.21731.2130-0.00435
Total: -1 940
Hello Larry,
Quoting dlftrader
Here is something that may interest some of you re the 1st and 2nd Wise Men that were introduced in Trading Chaos, 2nd Edition. They may be more useful as filters than entry signals. One of my trading strategies for the M5 time frame is to nest a buy order above the VFH when the AO bar is green, and to nest a sell order below the VFL when the AO bar is red... whether or not the AO bar is positive or negative. Could more pips be captured if I required any entry signals generated by the 1st or 2nd Wise Men to have been hit before nesting a 3rd Wise Man order? In other words, would a signal failure by the 1st or 2nd Wise Men keep me out of more loss or low profit trades? I started looking at this because I am reluctant to enter a trade on the wrong side of the Alligator... most of us old-time Profitunity disciples likely are having trouble with that!
...\larry.bye
Thank you for sharing the above with us.

I'd like to add that the Chaos Trading System is designed basically for tranding markets rather than sideway moves and adding is very useful when a trand is on.

In the book, you've mentioned, is noted than trands are more and more rare. This is why a new approach is required.

It is Divergent Bar - an attempt to enter market on the least sign of trend reversal. As one could guess - this increase potential profit, if trend reverse. Increasing potential profit corresponds with increased risk. This brings into the world new, so called, pink [purple] line.

Pink line is 5 SMA shifted 3 bars to the right. It is serving as a stop loss - trade have to be closed when there are two bars closing on the opposite of the movement side.

Finally: nevertheless which side one enters the market there is an ever lasting dilemma:

  1. If we enter the market using DBar - the signal might turn to a false one
  2. If we don't - we might miss a substantial move and market to turn around just after taking the fractal.

Last two trades (post #66 & post #67) are good samples of the above.

Perhaps this is why a substantial part of the book is devoted to trader's mind...

Quoting dlftrader
Jim No:
I apologize for the tardy response... I've been off playing grandpa.

First, my position sizing and risk management rules tell me exactly my lot limit for a trade; and for me "a trade" begins when I get on board a directional move and includes any subsequent add-on lots. A trade is opened only on a signal from one of the Three Wise Men. Here is how I normally allocate that lot limit:

  1. By my rule, I commit only 1 lot per buy/sell signal.
  2. Once a trade is opened, a signal is valid only if its fill will be beyond the Alligator in the direction of the trade.
  3. As long as my trade is profitable, I take all valid Profitunity trade signals until my lot limit is reached or the trade is closed. Valid Profitunity trade signals include those described in Bill Williams' second book, New Trading Dimensions.

Before adding on to a profitable position, pay strict attention to how the add-on will impact trade risk limits and where breakeven is!

...\larry.bye


Thanks Grandpa....from one to another. The hard part is being married to a "grandma!".

I am a trend trader and looked real hard at Bill's stuff before and now am relooking at the whole system. I think the magic of this system is the ability to add on reoutinely during a trending market and having a relativiely small position during the times of consolidation. In my trading i am able to get in, but want to be able to add on in a systematic way. Thanks for your input Larry.

Would love to compare notes sometime.

My best,

Jim No
It seems to me that current state of GBPUSD H4 chart is a good DBar candidate.

It failed to take previous low 1.9865 (Apr 27) formin a double bottom.
Angle is steep and opening. We have two divergent bars formed with AO red bars.
Down acceleraion is slowing and momentum is up during current H4 session.

If I have chance this could be a trend reversal.

Let's see
Attached Image
After yesterday drop down, EURJPY turned up once again taking previous two fractals. Will price go higher?
Attached Image
Isto, In regards to your long us chf, post #58, i am curious as to why you didnt set up a stop and reverse with the wise man #1? Maybe you didnt get that signal because of different data or you didnt like the angle? These bw1 signals work real well with elliot waves and harmonic patterns. Great thread, keep it up.

David
Attached File(s)
File Type: doc us chf 5-3.doc   48 KB | 969 downloads
Quoting davidl
Isto, In regards to your long us chf, post #58, i am curious as to why you didnt set up a stop and reverse with the wise man #1? Maybe you didnt get that signal because of different data or you didnt like the angle? These bw1 signals work real well with elliot waves and harmonic patterns. Great thread, keep it up.

David
The simple answer is: I've missed it
I cannot say why for now, but it doesn't matter. It is a nice looking missed signal.
Attached Image
After the rally momentum disapears again,
Acceleration is down forming a Divergent Bar
and perhaps because of yesterday loss I decided to exit.
(post #71)

I had 3 buy orders (totaly 14 lots)

Inserted Code
[b]DateSignalPriceSLP/Llots:[/b]
02.5.2007 10:52Z163.33163.470.144
02.5.2007 16:51F163.31163.470.165
02.5.2007 16:51AC163.53163.47-0.065

Total: 1 060
Attached Image
Inserted Code
[b]DateSignalPriceSLP/Llots:[/b]
03.5.2007 08:56DB1.99091.99100.00011
03.5.2007 09:00DB1.99171.9910-0.00071
03.5.2007 11:05DB1.99351.9910-0.00251
Total -310
USDCAD trade (post #59)

That's it - stop loss has been taken
Inserted Code
[b]DateSignalPrice  SL    P/L lots[/b]
02.05.2007 20:58DB1.10831.1059-0.0024 1
Total: [b][color="Red"]-240[/color][/b]
Isto, you got one weird lookin' avatar!

And thanks for posting the strategy, it looks very interesting.
Quoting anamy
Isto, you got one weird lookin' avatar!

And thanks for posting the strategy, it looks very interesting.
thanks, thanks, thanks
Alligator is sleeping, so do we
Only USDCAD seems to try 1.1035 support level... We'll watch
There is another calm day.
USDCAD makes very shy attempt to test 1.10 level;
GBPJPY gives up breaking down;
EURUSD is ranging already few days.

looking for a move somewhere
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