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Profitunity (Chaos) Trading System by Bill Williams

  • #501
  • Jul 30, 2007 4:57am Jul 30, 2007 4:57am
Hi Protei,

I already closed my short and went long above the top of S2
with stop below the low of S2.

So What Should I do,
If price moves below low of S1.... Close my Long and go short ?

or Wait till price breaks the Low of S2 before going short.

regards
tej
  • #502
  • Jul 30, 2007 5:10am Jul 30, 2007 5:10am
I think you should go short if price go lower S2....
I wish We had trends.....
  • #503
  • Jul 30, 2007 5:39am Jul 30, 2007 5:39am
Quoting tej
Hi Isto,

Pls look at the chart and tell whether the DB is valid ?

It looks valid to me bcoz :
a) It is away from alligator
b) steep fall
c) Acute angle

I went long above this Bullish DB, with my stop loss at low of S2,

Now after the next bar , which is Bearish DB, Should I move my stop to low of S1 ?


regards

tej
Thechnically - yes - the listed requirements are met.
Logically - no because it you take a look over the Alligator you'll certainly will notice that Alligator's lined are intertweaned.

This is why this could be either a good DBar or a signa of a new down move...

But this dualistic view exists always
  • #504
  • Jul 30, 2007 5:51am Jul 30, 2007 5:51am
Quoting tej
...So What Should I do...
Hi tej

I'd like to strongly underline that it is very dangerous to trade on somebody else recommendations.

Nobody could protect you from mistakes and every trader makes mistakes. The question is how does trader react to mistakes and to market signals in general.

This convinience of one or another action comes with practice and this is what evry trader must do all the time (nevertheless how successful is)

 

  1. analyse
  2. act
  3. analyse

  1. analyse
  2. act
  3. analyse

  1. ...

  • #505
  • Jul 30, 2007 6:14am Jul 30, 2007 6:14am
Isto i doubt how to trade on such a market.... look on the chart... i bought when price was 29.3 and sell by stop loss on 28.7 after what price immidiately returned on 29.2..... nice trade
Attached Image (click to enlarge)
Click to Enlarge Name: SNGS.jpg Size: 85 KB
  • #506
  • Jul 30, 2007 6:22am Jul 30, 2007 6:22am
Isto maybe i put my stops too close? or maybe too far?
  • #507
  • Edited 6:30am Jul 30, 2007 6:29am | Edited 6:30am
Quoting Protei
Isto maybe i put my stops too close? or maybe too far?
I personally avoid trading charts having fractals on both side of the alligator. Especially if there are few of them.

Ehat I see are ranges, break down, reande, break down, range...

If you want to trade this very chart you should try other tactics - there is no trend - you've $2 from 12 to 30 July - this cannot be labeled as "trend"...
Attached Image
  • #508
  • Jul 30, 2007 6:30am Jul 30, 2007 6:30am
Maybe you are right.... still there is no trend
  • #509
  • Jul 30, 2007 6:38am Jul 30, 2007 6:38am
Continuing from the previous post:

Here is a nice sample for several different stages:

 

  1. We have range on the left
  2. We have strong rally (trend)
  3. We have Bearish Dbar


DBar is supported by strong down acceleration and more than 6 green AO bars...

Here is a nice opportunity to try short side (keeping in mind that move might reverse sharply again)

Let's see what will be

Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud20070730-16.jpg Size: 127 KB
  • #510
  • Jul 30, 2007 6:59am Jul 30, 2007 6:59am
Hi Isto,

Thanks for pointing out that Traders have to live with dilemma always.
I feel an Objective System removes most of the Dual conditions.
But Yes ! we will still have these duality problems.. If there were no dual conditions then there will be no market. All markets Exist bcoz two people look at it from opposite point of view.

I have attached the latest chart showing how the market unfolded...
a) I closed my short position & went Long above the Top of DB1 bar.
b) After DB2 & DB3 bars were formed, I closed my long position below low of DB2 and went short again.
c) Now there is DB4 again, I am planning to close my short positions & go long above DB4.

I would like to know , if my actions were correct or wrong. So that
I can improve from next time...

regards
tej





Quoting isto
Thechnically - yes - the listed requirements are met.
Logically - no because it you take a look over the Alligator you'll certainly will notice that Alligator's lined are intertweaned.

This is why this could be either a good DBar or a signa of a new down move...

But this dualistic view exists always
Attached Image (click to enlarge)
Click to Enlarge Name: Dbar_2.GIF Size: 13 KB
  • #511
  • Edited 7:55am Jul 30, 2007 7:52am | Edited 7:55am
Quoting tej
b) After DB2 & DB3 bars were formed, I closed my long position below low of DB2 and went short again.
c) Now there is DB4 again, I am planning to close my short positions & go long above DB4.
Hi tej

if BD2 & DB3 are bearish dbars must be ignored at all. DBar is bar that goes against the trend. So Bearish DBars in a down move do not make sense ...

As to DB4 - it appears just after Alligator opens its mouth so

though it is possible, for me it seems more probable to go in down direction than to revers so soon (but it could!)

More probable for me is re-taking the bearish fractal which is very nice place to enter short with small risk.

As always you must be ready to act according with the market...
Attached Image
  • #512
  • Jul 30, 2007 10:09am Jul 30, 2007 10:09am
Tej, i think market simply dont know where he should go. Bears and Bulls are powerfull here... and so noone won today.... but maybe tomorow.... i think this is somekind of a range market... where Williams dont work.... you will only lose your money, like i do
  • #513
  • Jul 30, 2007 10:21am Jul 30, 2007 10:21am
Isto here is an example chart.... do i have a trend here or not? Alligator is opened.... on the bottom we have many Bullish Dbars and price failed to take 2000 level
Attached Image (click to enlarge)
Click to Enlarge Name: LKOH.jpg Size: 84 KB
  • #514
  • Jul 30, 2007 11:55am Jul 30, 2007 11:55am
I thought a little and found nice solution for my situation... What do you think if i trade using 5 minute time frame?

Look on the chart of SNGS with 5 minute time frame.

I think it looks greate! i see here micro trends... that might give me some profit... Isto what do you think about it?
Attached Image (click to enlarge)
Click to Enlarge Name: SNGS5.jpg Size: 96 KB
  • #515
  • Edited 12:59pm Jul 30, 2007 12:46pm | Edited 12:59pm
Hi isto,

Thank you for reminding me that we should consider only those dbars which go against trend. I have removed DB labels from these bars.

After looking at your drawing of Angulation, I realised i will need some good practice before I can draw the angle in right way.

Your analysis : seems more accurate & makes sense.
Quote
As to DB4 - it appears just after Alligator opens its mouth so though it is possible, for me it seems more probable to go in down direction than to revers so soon (but it could!)


But I had already gone long before reading your reply. bcoz I thought that other than DB we had some sort of confirmation from AC bars, that probably down trend is slowing down.

Now, the market has moved in my favour & I am getting 3AO signal (2nd Wiseman) & as per the system we should add 5 contracts at this signal. Only Doubt I am having is that this signal is coming right at the mouth of the alligator. At one side I have the axiom : Do not feed the alligator!, at other side this 3AO signal.
& also there is another bullish fractal nearby( but it is below Red Line), because of this dilemma I am planning to buy only one contract , if market takes out the bullish fractal.

Stop loss for this Entry. (3AO + bullish Fractal) would be low of previous bar.

Pls give your analysis.....



regards

tej
Attached Image (click to enlarge)
Click to Enlarge Name: Dbar_3.GIF Size: 11 KB
  • #516
  • Jul 30, 2007 1:25pm Jul 30, 2007 1:25pm
Tej i think market soon will go down again.... i saw such patterns many time....after 50% up correction price went down.
  • #517
  • Jul 30, 2007 1:25pm Jul 30, 2007 1:25pm
Hi Protei,

I have been thinking about this from quite sometime.

In the book : New Trading Dimensions. Williams Says :


Quote
The typical market spends from 70 to 86 percent of its life going nowhere.

Quote
Quote


Only 15 to 30 percent of the time does the market trend,


These two sentences tell us what to expect,
Since we are following a trend following System. It will make money only 15 to 30% of the time (i.e. when the market is in Trend)

Now, this seems a very pessimistic statement. But Truth is always hard to digest.

So we could do two things....
i) Keep searching the markets and trade only those markets which giving us clear trend

ii) Or may be drop down to lower time frames & take a trade when we see a clear cut trend in lower time frame. { If mkt is sideways in daily time frame, we could drop down to hourly, If hrly is also sideways then maybe 30 min, 15 min or even 5 min) But the problem with lower time frames is, we will have to be very quick and profits will be smaller.

regards
tej

P.S :
{ My mkt was giving me hard time in daily time frame, So I dropped down to hrly time frame, After 1st good move, now it is giving me continuous whipsaws }


Quoting Protei
Tej, i think market simply dont know where he should go. Bears and Bulls are powerfull here... and so noone won today.... but maybe tomorow.... i think this is somekind of a range market... where Williams dont work.... you will only lose your money, like i do
  • #518
  • Jul 30, 2007 9:17pm Jul 30, 2007 9:17pm
Tej.... thats why i decided to trade on 5 minutes.... Of course you wount have enough time to look on other charts... but anyway you have shoulders.. and you can trade using them to maximize your profit. I think using short time frames is usefull on stocks but not on Currency. So as i can see Isto's diagrams price is moving rapidly there.... but on my stocks price is not so fast and i can spend a week doing nothing..... well i dont want sit and wait.... so i'll try to... i hope i will have a chance....
  • #519
  • Jul 30, 2007 11:48pm Jul 30, 2007 11:48pm
Quoting tej
But I had already gone long before reading your reply. bcoz I thought that other than DB we had some sort of confirmation from AC bars, that probably down trend is slowing down.
Do not trade by my or anybody else advise!

Sooner or later this will crash your account.

All comments are only to clear the system and how to apply it on the chart(s).

This is not a buy/sell signals service

Quoting tej
...Only Doubt I am having is that this signal is coming right at the mouth of the alligator. ...
I don't see any change in the picture.

Price is in a range. This might be pumping steam for the next move...
Attached Image
  • #520
  • Jul 31, 2007 2:40pm Jul 31, 2007 2:40pm
Hi isto,

I fully agree with your comment :

Quote
Do not trade by my or anybody else advise!
Sooner or later this will crash your account.


As I had mentioned earlier also , That my main focus is on learning the finer points of the system. ( Hopefully my queries will benefit other members also. )

I am fully aware that I am a newbie.... thats the reason I am trading only in demo account. So that I don't lose Real Money and still get the real life experience. I feel Trading in the live market gives better experience than looking at the charts after the pattern has completed. After Market has completed its move, It is easy to say what should have been the Correct startegy. Thats the reason I thought I will take your guidance to find out, if I am correct or wrong. { Your comments have always been precise & have helped me to clear my doubts }.

Since I found a valid DB in the maket, I thought I will try to trade this move completely (in my Demo Account ). So that I can Learn under your guidance as the market progresses.

Given below are the steps I took in response to the information provided by the market :

a) Go Long above the High of DB2 ( 1st Wise man)
b) Add position as per the 3AO signal (2nd Wise man)
c) Closed all the open Long positions & Went Short as per the Balance Line Signal
d) Closed Short Position & Went Long above the Fractal
e) Add one more contract on open of the last bar, as per Zone Signal
f) Add one more contract above the high of the previous bar as per AC Signal
g) Next Zone Signal contract to be added on open of Next bar


If you don't mind , pls evaluate all the steps taken and guide me where ever I was Wrong !

regards

tej
Attached Image (click to enlarge)
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