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Chaos Strategy - Mid term and long term trading.

  • #21
  • Sep 9, 2008 3:04am Sep 9, 2008 3:04am
Quoting dznmrd
Learning this strategy is a bit difficult, but once you get used to reading it, You'll see money everywhere!

That's why i started the topic, so we can discuss it in real time n stuff,

Just check the powerpoint presentation slides, everything explained perfectly and with chart visual explanations.

If you aren't aware, even if you don't like this strategy, if you just follow the "Bill Williams fractals signals" on a 1hour chart, you could scalp a few pips here and there.

Thank you for sharing. I will take a closer look.
  • #22
  • Edited Mar 1, 2011 8:43pm Sep 9, 2008 5:23am | Edited Mar 1, 2011 8:43pm
I have all 3 Bill Williams books, have been testing his strategy on shorter term charts like 15min to 30min. In his third book, Bill Williams states in his faq that he uses the 30min chart for currencies.

Here is an example trade i am demoing

The BUY signal is at 1.4113, one pip above the fractal and confirmed by red balance line under fractal height.
  • #23
  • Sep 9, 2008 6:31am Sep 9, 2008 6:31am
And what is the exit strategy? Trailing above the fractals?
  • #24
  • Sep 9, 2008 6:53am Sep 9, 2008 6:53am
  •  FxChi
  • | Joined Dec 2007 | Status: Cash Rules Everything Around Me | 749 Posts
I learned this a while ago (from Cecil Robles) and didn't thoroughly test it, BUT the best part about the strategy is to continually add to your positions and build it up. It definitely works the best in a trending market....should really demo it for a while and check the results. Thanks for reminding me about it.
"Wishful thinking dies hard." Igor T.
  • #25
  • Sep 9, 2008 6:56am Sep 9, 2008 6:56am
My example trade is counter-trend as hourly and 4 hour are still down. So it is at best a scalp.

My exit would be test and failure of 1.4200 psychological level.

Base on the system, assuming a long trade, the most common exit would be market going below the lowest low of the last 3-5 price bars.
  • #26
  • Edited Mar 1, 2011 8:43pm Sep 9, 2008 7:04am | Edited Mar 1, 2011 8:43pm
Some of you might find this helpful: http://www.forexfactory.com/showthread.php?t=49373

The strategy is very profitable. You just have to be there at the right time and place.. and then take up those opportunities.. if you miss one, it takes quite some time waiting for the next on the same pair... well, you can trade so many markets (pairs) though, that you always find signals..

See chart for example trade. Only thing hard to grasp and trade are the divergence bars, you'll find a lot in an ongoing trend . not really knowing when to stop and reverse ....
The Essentials of Trading: Emotions, Risk Mgt, Price.
  • #27
  • Sep 9, 2008 8:09am Sep 9, 2008 8:09am
Quoting Slight
Some of you might find this helpful: http://www.forexfactory.com/showthread.php?t=49373

The strategy is very profitable. You just have to be there at the right time and place.. and then take up those opportunities.. if you miss one, it takes quite some time waiting for the next on the same pair... well, you can trade so many markets (pairs) though, that you always find signals..

See chart for example trade. Only thing hard to grasp and trade are the divergence bars, you'll find a lot in an ongoing trend . not really knowing when to stop and reverse ....

This was rather an exceptional move on Euro or how often do you see an 2000 pip move within two months? So don't judge the system on this.

And to say this strategy is very profitable but without really knowing when to stop and reverse...Well, you can't say something is working when you don't know how.

I don't want to make the strategy bad, but to prove its profitability it takes a well defined exit strategy. Is there an exit strategy for this system so we can test it objectively?
  • #28
  • Sep 9, 2008 8:14am Sep 9, 2008 8:14am
Quoting janson
This was rather an exceptional move on Euro or how often do you see an 2000 pip move within two months? So don't judge the system on this.

And to say this strategy is very profitable but without really knowing when to stop and reverse...Well, you can't say something is working when you don't know how.

I don't want to make the strategy bad, but to prove its profitability it takes a well defined exit strategy. Is there an exit strategy for this system so we can test it objectively?
Opposite wiseman 1
  • #29
  • Sep 9, 2008 8:16am Sep 9, 2008 8:16am
who cares if it's an exceptional move or not? when the signals occur, we act on it, that's it. there is no target or exit strategy to this method. it only uses stop losses. if you would've read the thread I posted the link to, you would know that Bill Williams suggests a stop on the last fractal back or a trailing stop of 3 - 5 bars. concerning the divergence bars: they are only one way to exit and reverse ... read the thread man. furthermore, I think I know what I am talking about here since I am successfully using this system.. blabla dont tell me everybody could say that now.. go read and try it yourself.
The Essentials of Trading: Emotions, Risk Mgt, Price.
  • #30
  • Edited Mar 1, 2011 8:43pm Sep 9, 2008 8:30am | Edited Mar 1, 2011 8:43pm
Quoting Ronald Raygun
Opposite wiseman 1
Thanks.

And the blue marked candles are no opposite wiseman?
Just had a short glimpse at the PPS today, so I may have overlooked some important fact.
  • #31
  • Sep 9, 2008 8:39am Sep 9, 2008 8:39am
Quoting janson
Thanks.

And the blue marked candles are no opposite wiseman?
Just had a short glimpse at the PPS today, so I may have overlooked some important fact.
Look at the purple W1 and tell me that isn't a wiseman 1
  • #32
  • Sep 9, 2008 8:43am Sep 9, 2008 8:43am
Sure it is.
But what about these four wiseman I marked? Are they correct or not?
  • #33
  • Sep 9, 2008 8:53am Sep 9, 2008 8:53am
Doesn't look it. The angularity seems a little too parallel for my liking.
  • #34
  • Sep 9, 2008 9:49am Sep 9, 2008 9:49am
I cant download your zip file with your system explanation




Quoting dznmrd
Hi Guyz,

I know most of you will be much aware of this strategy, but for those who do not know or are new to forex, i would like to share the system.

The entire strategy is explained in the power point presentation,
Attachment

Ive created a template which you could use to preload indicators on the chart in metatrader.
Attachment
Attachment

Note: My friend from Malaysia turned 10,000$ to over 1,7 million in the 1st half of this year from this system and he also informs me that most people who have graduated using this strategy have become millionaires in short time spans!!

Note2 : All indicators can be found by default in metatrader here.
Attachment

Good luck to all and enjoy making pips!
  • #35
  • Sep 9, 2008 3:44pm Sep 9, 2008 3:44pm
hello,its good to hear someone talk about chaos.i have went through your posts and i discovered that all the videos you pasted will not open.anyway, i have some questions to ask you and i will be very glad if you can answer them.

1. i downloaded a lot of things about chaos from the internet and bill williams said the first signal to watch out for is the fractal and it was also said that the fractal should be above the green line...i dont really understand what he means there, can you put me through?
i am of the opinion that , since fractals form around the alligator itself, can fractal signal be taken if it forms above the blue or red line or is it the green line alone? this has really confused me so much and i will be very glad if you can help me out.

2. as regards your videos that is not opening, can you just put the detail of the system in a pdf file so that we can asily open and read it?

i seriously look forar to seeing your reply.

happy pips taking.
  • #36
  • Sep 9, 2008 4:09pm Sep 9, 2008 4:09pm
Quoting bjpumping
hello,its good to hear someone talk about chaos.i have went through your posts and i discovered that all the videos you pasted will not open.anyway, i have some questions to ask you and i will be very glad if you can answer them.

1. i downloaded a lot of things about chaos from the internet and bill williams said the first signal to watch out for is the fractal and it was also said that the fractal should be above the green line...i dont really understand what he means there, can you put me through?
i am of the opinion that , since fractals form around the alligator itself, can fractal signal be taken if it forms above the blue or red line or is it the green line alone? this has really confused me so much and i will be very glad if you can help me out.

2. as regards your videos that is not opening, can you just put the detail of the system in a pdf file so that we can asily open and read it?

i seriously look forar to seeing your reply.

happy pips taking.
I can answer #1.

Fractals look for this pattern: (For an upper fractal) 1 < 2 < 3 > 4 > 5

The first bar is less than the second bar
The second bar is less than the third bar
The third bar is greater than the fourth bar
The fourth bar is greater than the fifth bar

or something like that.

Wise Man #1 is a higher high where the close is in the lower half. A fractal would detect this higher high.
  • #37
  • Sep 9, 2008 4:55pm Sep 9, 2008 4:55pm
Another Gral?

I don't think so.

Don't get me wrong. That might be YOUR method, but I think the method presented in the presentation is not very precise. I know you should not criticize gifts, but then again I don't want anyone to get too excited. (And this is no critic at dznmrd (http://www.forexfactory.com/member.php?u=78737)!)

Let me explain why and what:

1) Gator is supposed to show you when the market is trending or ranging

That looks nice on the slide, doesn't it? Do me a favour and take any of the trending or ranging slides and cover them with a sheet of paper or even your hand, and then move it slowly to the right. You have about the view you will have if you use the gator in actual trading. When are you actually able to assume that you are out of the ranging market in a trending? Thats it: Too Late! And how different is the picture really from the ranging market? And then, setup the Alligator on an actual chart. Are we right now trending or ranging? You see my point.

And now have a laugh at slide 59. It is considered an example for advanced technique. Following the description of slides 17 and 25, we should have never entered the market, until the last third of the graph, since it was a ranging market!

Result: This indicator will retroactively show any market situation. But that is too late for trading. And any MA would have done the same (actually with less lag).

2) Angulation

a) Alligator Mouth Line

I really tried to understand the concept of "draw or imagine a line that follows the alligator mouth". First I thought I had worked it out (slide 38 ff.). But then check out the slides 43-46. The "line" is in no possible relation to neither jaw, teeth nor lips. I don't know if I was in the wrong geometry classes, but they are all not even at any point tangent, god forbid they share any angle with any of the three lines. So what about that line?

b) "Edges of Price Bar " Lines

If you check the Slides (40, 43 ff.) you will see that the line refers to the trend of the price bars about 20-30 bars after the cross has taken place. How on earth are you able to draw that line at the moment, or shortly after this cross has taken place?

Result: Angulation as a prove of the right Bull/Bear Divergent Bar is an essential element of this method, nevertheless it requires some amount of clairvoyance.

3) The SuperAO and Fractals or W2 and W3

Can you say "Cream on top of Cream"? I do agree these two signals are great in a trending market. But that is traders problem: If you can be sure that the market will trend for the next 5 Minutes or Hours or Days or Weeks ... sure you could make money with almost every possible technique, indicator etc. Without that these to "Signals" are as useless as the rest.

You should ever be suspicious about a method which makes reference to for example EURUSD from 08.2007 to 11.2007 or 07.2008 until now. Prove to me that method works between 11.2007 and 07.2008 and it might be worth something . . .

Critically Yours
Fukinagashi
  • #38
  • Sep 9, 2008 5:42pm Sep 9, 2008 5:42pm
I have to admit that I'm struggling with the angulation concept as well. One of the 2 lines cannot possibly be drawn until several bars have passed after the signal bar. And the drawing of the other line is, at best, pretty subjective.

Andy
  • #39
  • Sep 9, 2008 6:23pm Sep 9, 2008 6:23pm
The point for angulation where the price crosses any alligator line is the place to start

I then get the suspected wiseman bar and draw a line to the midpoint of that

I get the alligator equivalent bar, and draw a line at the midpoint between teeth and jaw.

I figure that's a more precise "modification" for this system.
  • #40
  • Sep 9, 2008 7:01pm Sep 9, 2008 7:01pm
His first book was about Elliott Wave. The last one is too. Remember he says that all of his earlier techniques are still good. Actually they're all still in use at the same time. He just isn't explicit about it. Look for wisemen that occur in the projected zone for an Elliott wave to end. Remember Skunny's 162% lines? You will then have the correct angulation. You pinpoint the end of one wave and then trade the next. That way you are always in line with the market structure. It's very simple really, but you have to study all three books in order to finally "get it". Dznmrd's (anybody notice he hasn't been back?) powerpoint is nice, but it doesn't tell the whole story. I feel sure that if you trade it mechanically with no more understanding than that, you will lose money instead of making a million. So go ahead and get the books and study carefully. I managed to pick mine up on Ebay for about $10 a piece, so they don't have to cost an arm and a leg. It's worth the effort.
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