Profitunity (Chaos) Trading System by Bill Williams

Interesting is USDCAD H4 chart.

There is almost no buy signals until May 2 (these are 29 session bars!)
It seems that pair was afraid from yesterday attempt to break 1.1030 lever and it stumbled over 1.10 level.

Instead there are lots of down fractals showing movement direction and resistance to continue down.

I'll keep watch it ...

yeah, unexpected from UsdCad.. i think the price will go test daily chart resistance which is 1..1142. on 4H MACD, it seems has break the 4H resistance on 1.1048. so i'll wait for pullback and the go Long ... i am right ?

Hello MizZu

Nobody knows what will be the future.

There are basicly three opportunities: Goes up; goes down; goes sideway.

For each of these there might be found pro and cons.

I personally do not borther where will be the market - I'm trying just to be ready nevertheless where it goes.

Hello

Today GBPJPY formed a nice Bulish Divergent bar pattern on H4. We could see a nice angle, momentum was still down on the bar, but acceleration was slowing decline and turned into up direction.

Additionally price failed to break down the channel...

Buy Stop Oerder was placed on 238.45 (dashed horizontal blue line) and later has been triggered so I'm 1 lot on the long side waiting for 3 green AO to start adding. Because of the fast move in short time I've tighten stoploss a little bit.

Let's see what is comming next

Steep movement from yesterday top to 239.80 and
formed two bearish divergent bars so trade was closed
at 239.50 resulting in 46.5 point profit.

New 1 lot Sell Stop Order placed on 239.34 below the DBar.
New 1 lot Buy Stop Order placed on 239.81 above up fractal.

Looking for the next move

USDCAD post #81 continue hesitating where to go.

Finally an up fractal has been formed. Momentrum and acceleration though are weak and it test may fail

Be prepare for both directions.

well, when the price pull back to the daily resistance, i go Long @ 1.1065. Tp = 1.1085 . and now my trade has closed. another 20 pips today

happy trading

Obviously GBPJPY (poist #85) will rest for some time drifting along. As price does not goes down I decided to go out at 239.29...

After few days drifting today turns to be quite fasinating day

Because I obviously cannot publish and describe anything on time –
here is a quick link for a good Divergent Bar sample from today.

It totally resulted in slightly more than $6500 profit.

Hope to be useful for you.

Bravo!

GBPAUD on the H4 chart shows nice exaple for the chaos trading system.

These few days it dived deep down after Divergent Bars formed on May 4th.
Bullish Up fractal from May 9th was not taken at all and yesterday we had a Bulish Divergent Bar.

Analysis from yesterday you could find here.

On the same time on Daily chart (you may see it here) a double bottom was formed yesterday confirming validity of the DBar.

Fibonacci Expansion 100% (orange dashed lined in the bottom right corner) was also touched and had confirmed this support level.

Adding retracement from the bearish two Dbars (1st) and from up fractal (2nd) formed probabal target level for an up counter trend move (colored in light blue).

I used conservative target 2.4009 for I supposed to be taken during the night. I was lucky enough to be right resulting in 145 pips profit

Of course we have to keep in mind that the main point of interest is whether 2.38 level will be broken.

If it is there is a nice horizon in front. If not a nice up trend might start.

USDCAD postponed 1.10 level attack (or is mustering up to do it).

Meanwhile after double bottom was formed a new up fractal was formed
and later was successfully taken giving a signal for a long trade.

Too soon perhaps it accelerated and momvment went up supporting the new direction.

Today a new up fractal was formed and taken, supported with AO Zero cross and AC acceleration signal.

Let's see how strong the moving forces will be in the up direction

Hello Isto. How are you?
I have a question: How do you choose the divergence bar. For example in the last chart of the usd,cad i see a couple of them, but you entered on the break of the fractal.

Hello Miguel

There are two things I look for:

1. Stable move in one direction
2. Greater angle between price and red line (Alligator's teeth)

As you could see on the chart - neither of the mentioned exists - move has been killed by double bottom; there is almost lack of angle

The probabbility movement to reverse to down direction after double bottom is relatively small. Support to this is idea give weekly and monthly charts where double bottom also apear. Prices need some force and time to mustering it.

Acctually if you have taken the 1st DBar you could collect some profit...

I personally prefer to trade only when I have clear picture about the situation and stay out if I have any hesitations.

Even now up move could break (i.e. on the news) and reverse...

No one knows ... but everyone must be prepared and to have clear plan what to do in either case...

You also could reffer to post #26 for more info about DBar.

Thanks for the detailed answer. I have to read more about that ANGLE, not sure i follow that.
Have a good trading and weekend

Before to enjoy the week-end we have to note a new Bullish Divergent Bar setup formed on 4 hours chart of GBPUSD.

We could see:

1. a steeper price diving than the red line (Alligator's teeth) has.
2. a down momentum (red AO bars)
3. slowing acceleration (green AC bars)
4. unsuccessful taking over of the channel's bottom

This setup is supported also by the 38.2% consolidation in the Daily chart.
(you could see it here)

Wish you a nice relacing weekend

sorry for out topic! but had to

isto: Do not feed the alligator!

Fan of Dream warriors?-D

Previous Bullish Divergent Bar (post #91) faded fast (but was profitable) just to test 2.3780 level once more time.

For now it seems the test failed forming double bottoms.

To support these bottoms there are another Bullish Divergent Bar - hope it would be more profitable :
May be we could hope for a rally to 78.6 to 161.8 levels?

These are supported again by Double Bottoms on Daily chart (which are not completed yet).
Not completed though, this setup seems to become more profitable than prevous one
moving either up or breaking down.

More about confirmation on the dialy chart - look here.

Here is the next step in GBPAUD pair (previous comments are in post #98 and #91)

This is a sample how all arguments could be ruined by the market in one step

Nevertheless it seems to me that up move was more probable market decided
to take the down fractal and this morning I was kicked in the short side. :surprised


You could find here another interesting Divergent bar sample showing market whims :

Here is a nice setup formed on EURAUD H4 chart.

There are two bulish divergent bars with an acute angle chumming with two bearish down fractals.
There is almost no aceleration in either direction - i.e. narrow range.

We have two opportunities:
either bulls to get predominance or bears will - clear, eh?

One must be prepared for either directional move.

Deeper analysis about this setup you could read here