Profitunity (Chaos) Trading System by Bill Williams

if u want to trade this system u have to ignor the fundamental...wm1 is worth low risk and wm2 but wm3 is a full confirmation cus price will be above or below alligator at that point .....
i am 1 yr in this system on and off but fully on in trading chaos now ..

What time frames are your charts?

Do you use chaos trading system to make profit satbly?

DB is realy useful? w3 is realy useful ? fractals breaking thow is realy useful?

These indicators do really useful?

Itś 1H chart

hi fxtaiko...u spot on the reversal nicely especially on EJ 30 April...care to share which lesson from bill williams that make u take the trade ?

thnx

angulation

thnx a lot for yur kind reply.

WM1

i dunno whats happening to the markets these days but it's really chaos ...
btw nice setups.. very easy profit making

I just finished watching the home study videos. They were great until I started looking over my live charts. I'm convinced there must be something missing...if you trade this 'system' you will get slaughtered on all the losing WM1 signals.

I'm thinking that the way to compensate for the losing WM1 signals is to employ some kind of stop and reverse strategy. Perhaps increasing lot size to get back to BE faster. Any opinions?

Also, while some in the forum suggest to forget the WM1 and WM2 signals, that is the basis of their 'system'. BW's approach is not 1 entry and 1 exit but to employ a trading campaign. If you eliminate 2 entries then the concept of the trading campaign is not being used as they teach it.

I've spent hrs looking at charts of all time frames and I don't see how to prevent getting whip sawed by chop (aka the sleeping alligator).

I don't believe these observations are limited to FX. I looked at gold, oil, e-mini's, etc... on different time frames and all markets exhibit the same 'problem'.

What am I missing?

Experience and practice

Read the first edition Trading Chaos, incorporate the Alligator as it is a powerful trend following tool, or you can choose to use the old system, 34 5, and 13 EMAs. Which are almost the Alligator but not as speculative.

The problem is, Trading Chaos, and New Trading Dimensions = Powerful trend following systems. Using all the old indis, the MFI, Fractals, Thumb trades, very profitable.

Starting at Trading Chaos 2nd Edition, the first "wise man" who isn't all that wise unless you enjoy hitting wide stops on a live account, turns the system on its head into a Counter Trend system. Which entails larger and more inherent risk.

I trade the old system, and it is still profitable to this day, many of the new indicators, the AO, the AC, are just the shifted old indicators, fractals are enough to get in early enough on a move, to not have to risk a ridiculous stop IMO, on any time frame. If it touches your stop, get ready for potential disaster. In a range, or too far away, you better watch that trade, you might only get 5 pips.

I don't know exactly why Bill Williams added the divergent bar, my guess is he actually didn't, but his daughter or some other influential trader added it to the system. That opinion is entirely speculative, but the BDB stands out as a sore thumb in what is a trend following system. Some people use it profitably, some in Bill's trading group, I know many more it does not work for. As a tool it really seems to break down on the higher time frames. I don't know why, the Profitunity system is a real charm without trying to pick tops and bottoms.

And again, if you want to learn how to try to pick tops and bottoms, you can read the first book and learn very deeply about the structure of the Elliot Wave. Become an Elliotician to pick tops and bottoms, but beware, until you have a great deal of experience you will have to relabel. I would practice practice practice until the waves scream out at you. And when they don't, when you are forcing labels, simply don't trade.

Hope this helps, I really am a fan of this system, hell a practitioner of it, as it was the first system I really buckled down to study and learn its ins and outs. The First Wise man, is just not a good setup. Rather, go back to the first book and use thumb trades with MFI.

Thanks for the feedback. I find that most traders are more focused on the 'setup' as compared with the money management. As I said in my original post their course emphasizes the notion of a trading campaign. Adding to your trade 3-4 times as signals continue to present themselves.

Are people doing this? What's the implication if you choose not to trade the WM1 and WM2 signals?

Also, as far as the alligator goes, I'm using the built-in MT4 indi with the default settings. That is what is in the Profitunity course. Are you suggesting I change it?

You Elliotician comments are interesting...as they are EXACTLY opposite of what Justine says in the program. They have really de-emphasized the E Wave...though they do acknowledge the benefits. I can understand how it could be helpful. Do you have any suggestions for learning this?

That's it!

You mean to tell me that you are successful trading the Profitunity program as described in the class and you have no other suggestions other then experience and practice?

Please elaborate. I think your insights will be appreciated.

Depending on your interpretation of wm1 it may not actually be a valid signal if it below the red line on a long and above it on a short. It is used in conjunction with a bdb in the "gambling stage of Bill's method. I am having more success and more consistancy with using wm3's only. Usually taking a wm3 is clearing past a wave 5 on some lower time frame. I use tight stops as well once it clears my entry point after say bar 2. If it continues my way great if not I get stopped out with a 1 pip gain. At that point I look for a new entry point. What I have found that is working well is looking for 3 valid fractals below or above the red line. I take the fractal with the best price entry and it does not matter what time frame you use.

Bill is big on BDB's but I have had more losses than wins using them. If I do use one I again use a tight stop if it moves in my direction and then reverses. I have also waited for the 2nd bar to enter as many times I will get executed on a bdb but immediately reverses for a loss.

I would suggest at this point to just focus on 3 valid fractals to form first and then take the first one that hits.

Avid, thanks for the 3 fractal suggestion. I've looked at similar approaches but it seems that by the time the 3rd fractal is put in we are far into the trend. Would it be to much to ask if you could post a chart example?

What timeframe do you trade and what times (GMT) do you trade? I'm US Eastern time...I keep thinking that London open may be the time to trade forex as that is when most (if not all) of the daily range is put in.

Lastly, have you considered using a stop-and-reverse strategy with the WM1? It seems if the market is not ready to reverse then it is more likely to continue.

Here is an example of what I am talking about. As you can see there are 3 valid fractals above the red line. I have had much success taking the 3rd valid fractal above the red line or below if it is a short.

The 3 fractal setup he is refering to is basically a "saddle point" from Bill's book "New Trading Dimensions". They work very well but are few and far between these days at the daily level. Markets are just too volitale to let them setup.

I emphatically agree with you on this method, if I was going to use Trading Chaos 2nd edition, this is exactly the way I would do it. I prefer the first however, as it works for me.

I don't see why you would want to de-emphasize the Elliott wave, as the point of and axiom behind every indicator Bill Williams uses and has developed is based on what he calls the "fractal underlying structure" of markets, which he identifies as an Elliott Wave. More on this later, however.

Basically everything Bill Williams developed, with the exception of the BDB (Makes sense why it doesn't work as well as everything else now, actually) is based on E Wave theory. Bill Williams is a prominent Elliottician, and quite skilled.

Returning to the de-emphasis of the Elliot Wave:

I do believe that they streamlined the system in New Trading Dimensions and especially Trading Chaos 2nd edition to take the "lumps" out of having to actually spend a lot of time learning how to trade waves. There's nothing wrong with this, as really the indicators still pretty much work (not as well as the first edition plain ones in my experience)...But they are based upon Bill's understanding of the structure of the EWave.

Suggestions for learning the Wave, well you could get ElWave software, practice labeling and then run the software to see where you differ with the software, as it pretty accurate. It is quite expensive software however. Book wise I recommend two, The Frost and Prechter one and Mastering Elliott Wave by Glenn Neely, I am studying it right now and it offers practical methods for identifying where you are at in a wave using a confluence of multiple time frames and then labeling correctly. It takes quite a bit of practice and study however.

Personally, I tend to spot waves easiest using the 15m TF and then the 4H TF. Anything below 15m and the 1H I am not too great at. I don't trade only waves though, I make much use of daily pivots for my entries as well, if a currency is near a pivot point, or S&R when I am trading.

There is a lot of controversy regarding whether EWaves work, or are too subjective, but really everything is subjective. If you understand the intricacies of a system and apply its rules well, and have a good deal of experience as an air bag on top of that; you will have more winners than losers. I trade Chaos with EURUSD and GBPUSD, when I trade GBPJPY and JPY pairs I only use PPs and Ichimoku, I do all right using two completely different systems, but I make sure to study them as I would any other subject, and then follow them. Really everything comes down to knowing your system, trading it correctly, money management and experience. As everyone says, there is no silver bullet.