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Profitunity (Chaos) Trading System by Bill Williams

  • #281
  • Jul 11, 2007 3:03am Jul 11, 2007 3:03am
Here is a Bullish Divergent Bar setup currently forming...

After the break down and nice down move offering nice profit price is resting

Currently we have a Bulish DBar and Bearish fractal, so tight the stops and be prepared.

Let's look for the next move

Another nice trade and possible setup is available here.
Attached Image
  • #282
  • Jul 11, 2007 1:27pm Jul 11, 2007 1:27pm
CADJPY Divergent Bar Setup.

More -> here
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  • #283
  • Jul 11, 2007 1:44pm Jul 11, 2007 1:44pm
EURCAD formed also a Divergent Bar setup - Bearish one.

Look here
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  • #284
  • Jul 12, 2007 3:20am Jul 12, 2007 3:20am
hello isto.

in what bill book did you learned about the Divergent bar?
  • #285
  • Jul 12, 2007 3:43am Jul 12, 2007 3:43am
Quoting 400396
in what bill book did you learned about the Divergent bar?
Trading Chaos 2nd edition I think...
  • #286
  • Jul 12, 2007 7:39am Jul 12, 2007 7:39am
Here is the H4 CHFJPY chart showing break up the last three Bullish fractals.

Break is supported by Momentum.
Acceleration has not reacted to the up move of the current session.

Looking the move
Attached Image
  • #287
  • Jul 12, 2007 1:38pm Jul 12, 2007 1:38pm
The beginning of the story is here.

After double bottoms, Bullish Divergent Bar went up taking all buy stop orders...
Attached Image
  • #288
  • Jul 13, 2007 1:27am Jul 13, 2007 1:27am
Comments are here
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  • #289
  • Jul 13, 2007 8:37am Jul 13, 2007 8:37am
Beginning is here
End - here

Result:
Inserted Code
[b]DateSignalPriceSLP/LP/L$lots:[/b]
11.7.2007 13:59DB114.97116.791.8218201
11.7.2007 22:213AC115.86116.790.939301
12.7.2007 15:31F116.36116.790.434301

[b]Total:3,180[/b]
Attached Image
  • #290
  • Jul 13, 2007 1:25pm Jul 13, 2007 1:25pm
This is the result from current week

Inserted Code
Total Trades: 150 
Profit Trades (% of total): 80 (53.33%) 
Loss trades (% of total): 70 (46.67%) 

Profit Factor: 1.25
Attached Image (click to enlarge)
Click to Enlarge Name: 20070709-13.jpg Size: 24 KB
  • #291
  • Jul 13, 2007 4:53pm Jul 13, 2007 4:53pm
Hi isto,

After reading about the chaos system in your thread, I have read New Trading Dimensions. I would say that not only your thread is excellent, but you also seem to be a disciplined trader.
After reading so much about the system, I feel like using the system for my personal trading.But as soon as I wanted to enter the market , Many doubts came in my mind. I hope you can help me out.

I have labelled Up Fractals as UF1,UF2 and Down Fractals as DF1, DF2, DF3
and few bars with a,b,c,d,e,f labels so that it will be easy to refer to a particular bar.

1) Since the divergent bar (DF1) is right inside the mouth of the alligator, Should we enter long when high of this Divergent bar is crossed by bar labelled a ?

Can we say that bar (DF2) is a divergent bar ?
In case we take signal on Divergent bar (DF1) or Divergent bar (DF2)
where should we place the stop, below red line or low of divergent
bar or below the nearest fractal (DF2)

2) You would have noticed that on bar (a) we are getting multiple signals
there is fractal buy, AO signal , Zone Signal , AC Signal( I am not sure
if AC signal is correct for this bar )
so which signal should we take, or we should take all the signals ?
At which bar we should have taken AC signal ?

Since all these signals are in a small range of few points, we could end up having big position at similar price. and if stopped out it could lead to a substantial loss, what is your suggestion ?

3) bar (a) to (e) are in green zone, As per the zone rule we are supposed to add positions on close of these bars, But bar (c) and (d) do not make new highs, so should we add position on close of bar (c) & (d) as per zone rule ?

4) on bar (e) we have fractal buy and balance line signal at the same point
so which signal should we take ?


thanks and regards

tej
Attached Image
  • #292
  • Jul 13, 2007 5:21pm Jul 13, 2007 5:21pm
Tej,

I was looking at your chart and I see that you have some custom zone indicator that shows whether or not AO & AC are both red or green at the same time. That's really cool! Do you mind posting that indicator for the rest of us? It would be GREATLY appreciated.

Thanks so much.
  • #293
  • Jul 14, 2007 11:27am Jul 14, 2007 11:27am
Well tej, this chart has two major points that would make me to postpone trade.

 

  1. Alligator is intertwined - this means there is no trend at this point
  2. Divergent bars must be away from alligators lines


So based to the above said I would either tighten the stops if I'm in a trade or will stay out until a trend appears.


Quoting tej
Hi isto,

After reading about the chaos system in your thread, I have read New Trading Dimensions. I would say that not only your thread is excellent, but you also seem to be a disciplined trader.
After reading so much about the system, I feel like using the system for my personal trading.But as soon as I wanted to enter the market , Many doubts came in my mind. I hope you can help me out.

I have labelled Up Fractals as UF1,UF2 and Down Fractals as DF1, DF2, DF3
and few bars with a,b,c,d,e,f labels so that it will be easy to refer to a particular bar.

1) Since the divergent bar (DF1) is right inside the mouth of the alligator, Should we enter long when high of this Divergent bar is crossed by bar labelled a ?

Can we say that bar (DF2) is a divergent bar ?
In case we take signal on Divergent bar (DF1) or Divergent bar (DF2)
where should we place the stop, below red line or low of divergent
bar or below the nearest fractal (DF2)

2) You would have noticed that on bar (a) we are getting multiple signals
there is fractal buy, AO signal , Zone Signal , AC Signal( I am not sure
if AC signal is correct for this bar )
so which signal should we take, or we should take all the signals ?
At which bar we should have taken AC signal ?

Since all these signals are in a small range of few points, we could end up having big position at similar price. and if stopped out it could lead to a substantial loss, what is your suggestion ?

3) bar (a) to (e) are in green zone, As per the zone rule we are supposed to add positions on close of these bars, But bar (c) and (d) do not make new highs, so should we add position on close of bar (c) & (d) as per zone rule ?

4) on bar (e) we have fractal buy and balance line signal at the same point
so which signal should we take ?


thanks and regards

tej
  • #294
  • Edited 5:15pm Jul 14, 2007 3:56pm | Edited 5:15pm
Hi Tommy,

Sure , You can use this indicator, I had written this indicator to help me to identify the zones.
This indicator is written in Metastock formula language. So it will work in Metastock. But with small changes it should work in other charting software also.
If you are using Metastock then I can upload this indicator for you or you can copy/paste the following code in indicator builder.

This indicator consists of three parts

Zone_Green
If(Fml( "Profitunity - PTG AC Green") AND Fml( "Profitunity - PTG AO Green"),1,0)


Zone_Red
If(Fml( "Profitunity - PTG AC Red") AND Fml( "Profitunity - PTG AO Red"),1,0)

Zone_Grey
If((Fml( "Profitunity - PTG AC Green") AND Fml( "Profitunity - PTG AO RED") ) OR (Fml( "Profitunity - PTG AC RED") AND Fml( "Profitunity - PTG AO Green") ),1,0)

Hope this will help you.

regards
tej


Quoting Tommy_C
Tej,

I was looking at your chart and I see that you have some custom zone indicator that shows whether or not AO & AC are both red or green at the same time. That's really cool! Do you mind posting that indicator for the rest of us? It would be GREATLY appreciated.

Thanks so much.
  • #295
  • Jul 14, 2007 5:12pm Jul 14, 2007 5:12pm
Hi isto,

Thanks for your input. I was doubtful about the divergent bars, so I had not taken this signal.

But I had bought on breakout of 1st fractal, bcoz this fractal was above the red line. Was this action correct as per the rules ?

But since so many signals came at sametime I didnot take other signals. Though as per the Book we are supposed to take all signals after first fractal is taken out. I need your advise in this matter, i.e. what should one do if multiple signals are triggered at same price or within a small range of 5 to 10 pips. Place orders for multiple lots or just one lot ?

I have small confusion over Zone Signals. As you will notice that bar a,b,c,d,e are all in green zone. that means we should buy on the close of each bar ?
But Bar c & d have lower highs compared to previous bars, Is zone signal valid for these bars c & d ?

This trade is in profit so far, I have attached the chart. Now where should i place my exit ?
Should I wait for a close below Red Line or Below the low of Down Fractal (DF3) or is there any other method for early exit ?

Eagerly Awaiting your guidance

regards
tej
Attached Image (click to enlarge)
Click to Enlarge Name: q_chaos_2.GIF Size: 16 KB
  • #296
  • Jul 16, 2007 3:05am Jul 16, 2007 3:05am
Quoting tej
But I had bought on breakout of 1st fractal, bcoz this fractal was above the red line. Was this action correct as per the rules ?
yes it is.

I would enter on UF2 break.

Quoting tej
...what should one do if multiple signals are triggered at same price or within a small range of 5 to 10 pips. Place orders for multiple lots or just one lot ?
Generally - yes each signal have to be taken.

But it depends on the timeframe you're trading. Smaller one will producw much more signals. If you have to take them - depends on lots of factors (one of them is your account balance )

Quoting tej
I have small confusion over Zone Signals. As you will notice that bar a,b,c,d,e are all in green zone. that means we should buy on the close of each bar ?
But Bar c & d have lower highs compared to previous bars, Is zone signal valid for these bars c & d ?
yes, we should buy on the close of each bar until there is not signal for direction change...

but again there are lots of factors that must be considered...
  • #297
  • Jul 16, 2007 6:30am Jul 16, 2007 6:30am
Quoting isto
yes, we should buy on the close of each bar until there is not signal for direction change...
Isto,

I just reread New Trading Dimensions a few weeks ago, and I am pretty sure that, with respect to zone trades, the book says that you buy on the close of green AO and green AC as long as the bar has a higher close than the bar before it. So, if a green/green situation comes up, but the candle has a lower close than the candle before it, it would not be taken. But, if green/green happened on the next bar, and that bar had a higher close, then you would buy on the close at that point.

At least I think that's what the book says... I could be wrong.
  • #298
  • Jul 16, 2007 7:02am Jul 16, 2007 7:02am
Quoting Tommy_C
Isto,

I just reread New Trading Dimensions a few weeks ago, and I am pretty sure that, with respect to zone trades, the book says that you buy on the close of green AO and green AC as long as the bar has a higher close than the bar before it. So, if a green/green situation comes up, but the candle has a lower close than the candle before it, it would not be taken. But, if green/green happened on the next bar, and that bar had a higher close, then you would buy on the close at that point.

At least I think that's what the book says... I could be wrong.
Probably you are right. This make sense.
  • #299
  • Jul 16, 2007 7:57am Jul 16, 2007 7:57am
Hello everybody! Finally i got a chance to scratch some things here.
First of all, thanks Isto for your explanation of Chaos Theory!

Ok, now about me... i am using Bill's ideas from april. And till this moment i have found 2 problems

1) If i enter when price hit fractal signal... then i will loose to much movement
2) And actually i dont know where to place take profit... Becos if i wait till the red line, i will surely loose half of my profit.

Idea with DB is really new for me. And it really rocks.... but sometimes it is really hard to understand whether this bar DB or not. So could you please explain again..... and if it is possible on my picture

As i can see on this picture, the last white bar is Bulls DB... or maybe i am wrong?
Attached Image (click to enlarge)
Click to Enlarge Name: EESR.jpg Size: 90 KB
  • #300
  • Jul 16, 2007 8:04am Jul 16, 2007 8:04am
Quoting Protei
Hello everybody! Finally i got a chance to scratch some things here.
First of all, thanks Isto for your explanation of Chaos Theory!

Ok, now about me... i am using Bill's ideas from april. And till this moment i have found 2 problems

1) If i enter when price hit fractal signal... then i will loose to much movement
2) And actually i dont know where to place take profit... Becos if i wait till the red line, i will surely loose half of my profit.

Idea with DB is really new for me. And it really rocks.... but sometimes it is really hard to understand whether this bar DB or not. So could you please explain again..... and if it is possible on my picture

As i can see on this picture, the last white bar is Bulls DB... or maybe i am wrong?
The concept of the bullish/bearish divergent bar is a tough one to grasp. It took me quite a while, too. When looking at the chart you posted, the last white bar would NOT be a bullish divergent bar. True, it is away from the alligator's mouth; true, there is angulation with the blue line (alligator's jaw); but in order to be a bullish divergent bar, it has to make a new low and also close in the upper half of the bar. That particular bar, while it did close in the top half of the bar, did not make a lower low than the bar before it.

It takes some practice, but after a little while the bullish/bearish divergent bars will, literally, jump right off the page at you.

Good luck.
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