Profitunity (Chaos) Trading System by Bill Williams

The attached chart is GbpCad H1. I have marked it up As to my understanding of how the Williams signals work.. Can someone look them over and give it a once over and comment?
A ? means I don't know what to do with it..

Paddy

I'd wait on this

The chart that you posted is actually a daily not an hourly chart.

I ran a daily chart and an hourly chart through my El Wave software and they came out with similar counts. The daily one is attached.

I would prospect in a different pair for a better setup, but you could catch that little fifth wave down. The CAD is strong at this point and the pound is weak.

Hi WAB,

Very interesting Elliott Wave Software. Could you say where I may be able to get a copy. Thank you.

I was just marking up that particular chart after reading The book.. just wanted to know if I marked it right. This system seems pretty simple after you read up on it.. just have to make sure I get all the parts Identified right.

Wab, I was looking at Elwave the other day.. does it help?

Elwave is an excellent program. I have used it since it was first available and they just keep making it better.

I don't know if I am allowed to post a URL here, but Google Elwave and Prognosis and you will find their site.

You can connect it to mt4 and have it count waves in real time as the prices arrive.

Bill Williams methods do not really require that intense degree of analysis though. If you follow his strategy and stay out of short-term charts you will be fine. Remember if you cannot see a good opportunity in a a pair, try another pair, opportunity is always knocking somewhere.

I am out of town for a week but I will start trying to post some good looking chart counts here when I get a chance.

I appreciate it Wab. I figure, from the analysis so far, that Chaos rules. Would you advise going to visit Bill and his Daughter for the class they give?

I have played with the Elwave demo some and read the website at prognosis. Would purchasing Elwave be worth the investment?

Thank you WAB

pmacbrian..........by all means I would suggest to go. I've used his home study course for 12 years and bought the updated one in 2007. I then went to the private tutorial with Bill and Justine in March of 2008. Well worth it and Bill is just a great guy!

Can anyone comment on this marked up AU H1 chart. I am liking the setups tell me were I am going wrong or right please.

Paddy

I think this is a nice setup .

Waiting for Wave 4 to complete and take the Wave 5.

Let´s see.


Indrid Cole

I've been trading using his Trading Chaos second edition book. (I've been trading with the first edition system, which is GREAT!) and I have to say I am SORELY disappointed in the "Wise Men" and the new oscillators. But my main beef is with what is arguably the cornerstone of the new system, that which decides the bulk of your entries. The first "wise man", the Bullish Divergence Bar.

I would seriously warn people against trading the bullish divergence bar. Using the Alligator and good angulation doesn't seem to help in the slightest; for every cherry picked trade you win, you get stopped out (with big SLs even H1 and H4) five to ten times. I've practiced using this tech on H1, H4, and 15M Tfs. In my final analysis the BDB is a dangerous counter trend technique, and is quite hazardous to the health of any account using it. Frankly it is not working live at all thus far for me. Whereas Trading Chaos first edition does work, often and well.

If you really must pick tops and bottoms; pin bars on the H1 and H4 are a MUCH safer tried and true method, pin bars with pivots and fibs being even more profitable. In fact the only time the bullish divergence bar has worked for me has been in the presence of a good pin bar. The problem with the BDB is that with angulation you end up placing your stop well before a pin bar forms. And then even if it does, you usually hadn't gained anymore profit than if you had waited for a pin bar to form and close and then price action.

Basically angulation is just pin bar trading, but good angulation (by the rules of the system) forms often without pin bars and this is where trading it fails, might as well just trade the pins.

Where you lose big money is if you place your buy or sell stop a couple pips above or below the BDB, you frequently get your stop gently "tapped" by a pin and then the market can continue trending. Conversly if you place your stops too far away from the BDB it is nearly impossible to break even, if the market continues trending. And profits are generally lower IF the BDB is even true.

I am quite confused why Bill Williams shoehorned the BDB into his system and turned his system indicators that were built around trading with the trend, into indicators to trade against it. The exact process of picking out a BDB and putting a stop on it requires trading against an Alligator that is in the process of closing. So really this technique works against the purpose of the Alligator as well.

I am in the process of back testing bullish div bars but as I am also taking price action based off the MFI into account this is taking me some time, finding a lot of losers so far though.

As for me, I am going to stick with my MFI, 5/34/5 MACD, Fractals, and EWs, using the Profitunity indicators as they were originally intended, as a trend spotting and trading system, not this ultra counter trend bottom and top picking stuff that does not pan out often enough to have profitable system expectancy.

Has anyone else had issues with this? Any tips? I'm seriously disappointed right now after being so excited over the "brand new indicators" and "revised system" a while ago when I pored over and digested Trading Chaos second edition. This system just does not trade as well as its examples, even when you are being ultra conservative following the rules.

And don't even get me started about adding lots based on the AO. Or the part in the book on page 126 where he suggests you could even in theory trade off the first signal bar from the AO and be highly profitable. If you did, you'd wipe out an account in short order. Don't believe me, back test it on any currency pair. I'm starting to see why the second edition was 3/4ths filled with psychobabble. The second edition system is weak sauce IMO.

Nevermind the AO, if you just traded squat to squat on the MFI you would be profitable, and wouldn't be getting big SL hits either.

But like I said, I didn't just post this only to vent my indignity at the second edition of Trading Chaos, but also to see if people who use the first edition system have actually incorporated the second well into their trading. So please do, take my points and tell me if you agree or disagree with them. I'm subbed to this thread and have seen good live trades using this system. Apparently it is possible...

Great post. Thank you for this. I like it because the thread shows that BW´s approach works BUT.... Not just that " it does not work..." or "it is the Holy Grail" but a very long post wth a detailled opinion.

I have some problems with my stops too. The WM1 and WM2 gets me in early but you get several losses and one winner. And the stoploss has to be huge. Too much for me. But since I started trading more along the Elliott waves, it gets better and I do not get so many loosers anymore. But I started thinking too if I really need those Wm 1 and 2. The approach in Trading Dimensions fits me much more. But I am really fascinated with the MFI and Volume. Could you post some charts to show your approach? Would be great.

IndriD Cole

Does anyone have an ea or indicator that sounds an alarm when a fractal breakout occurs?

Being newer to Forex, and liking the Williams approach I also have not had success with the Wise 1. Seems that you need to place that entry very small because you will most likely Stop out. W2 seems to be a little better, but not much and fractals... well there has to be more understanding on my part. I see the potential just not the profits ...yet. Would be nice to work out the details a little bit more with others on this Thread.

Have a look at the EWaves too. It might help. A WM1 in a corrective wave might be a winner if you know where you are with the Elliott Waves.

What do you think?

Fundamentals and technical seems to give a sell?!?!?!


I.C.

I too have struggled with the Wisman 1 signals. In fact I have removed it from my charts and gone back to the "New Trading Dimensions" style of trading. The problem I am having now is that saddle points are becoming rarer. It used to be I could find 5-8 daily chart trades a month. Now its down to 1-2. I really think the markets are still messed up since the collapse of 08. I think it will take more time for them to get back to normal. Used to be I could find a few Wisman 1's with maybe 1 out of 3 working. Now its 1 out of ten with Wiseman 1's showing up constantly. 09 was a horrible year for trading in the futures market, with most contracts correcting the long term sell off from 08. It made for some terrible volatility. AUD/USD and CAD/USD are showing that volatility now. Wheat was a good example the other day, 10% down in a matter of hours only to retrace a good portion in the july contract. I am also watching liquidity dissappear in some markets. Not to be negative but I think there is a big change going on in the markets. It may take a while to make it to the other side. Someday things will be normal again!

Sell Stop@
0.9296

Let see what US market will favor this setup