Chaos Strategy - Mid term and long term trading.

Quoting TradeCell

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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.

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Quoting Bull

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Hi TradeCell, please let me asking something... following your chart can you please let me know if I'm wrong (see the picture bellow):

Where:

1 Is my first Buy entry at 1.4113 - Reason: Break the Last High Fractal (A).
2 Is my second entry at 1.4143 - Reason: Break the Last High Fractal (B).
3 Close all long position - Reason Wise 1 Bear Divergence.
3 Open a Short position - Reason Wise 1.
4 Second Short position - Reason Wise 2.
5 Close all my short positions - Reason: Wise 1 Bull divergence.

Summary:
Long at 1.4113 - closed at 1.4178 - 55 pips win.-
Long at 1.4143 - closed at 1.4178 - 25 pips win.-
Short at 1.4177 - closed at 1.4107 - 70 pips win.-
Short at 1.4098 - closed at 1.4107 - 9 pips loss.-

Total: 191 pips win.

I'll appreciate your opinion.

Thank you in advance

Bull

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Quoting kevler

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im using Chaos since my early days in forex trading ..

but i'm still unable to determine wisemen 1 (W1)

could anybody explain me about this , rather than i read the powerpoint slides ..

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Quoting Ronald Raygun

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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.

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Quoting taxgeek

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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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Quoting dznmrd

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Simply speaking, Step by step.

1. We enter when the jaws are open,
2, We add lots each time AO displays opposite signal at the 3rd bar in AO
3, We close all positions when the jaws are shut.

Recommended TF = 1hour/4hour
Bill Williams recommended = 30mins (reason because indicators would show less lag)
Fractal = when candle makes a higher high and closes in the lower half or when candle makes a lower low and closes in the upper half.
Simple enough?

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Quoting Richard7

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Taxgeek,

I like your grasp of this. I have been trading chaos for about a year but I've always felt I've been missing something, and it seems what I'm missing is the understanding of Elliott waves. I've read Williams' last two books and I haven't gotten nearly the understanding of EW that you seem to have. How did you learn and apply it to chaos? Is there more in his first book that I need to know?

By the way, I don't remember Skunny's 162% lines, but I'm sure enough going to look for them now. I presume the 162% is a fib extension, and I know EW uses fib projections in one way or another, but I quit using fib retracement and corrections a while ago. Time to start again maybe? Anyway, I'll start researching a little more, but if you could get me pointed in the right direction with regard to EW I'd appreciate it.


Cheers,
Richard

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Quoting lite27

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Hi guys, I know this system good for couple of years already and do not want to say,that it is bad. No,it is good enough if you understand how to use it. But this system is much more complicated than some other very simple systems. Whats to results, you can have the same or better results with other much more simplier systems. So, I am not a fan of this system. Cheers,

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Quoting dznmrd

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gUYS im really sorry for not updating, im just feeling too lazy to read and type nowadays,

Ill update on the weekend,

Happy pips 2 all

You can find a lot of stuff in this forum topic for chaos
http://www.forex-tsd.com/suggestions-trading-systems/15939-chaos-strategy-mid-term-long-term-trading.html

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Quoting taxgeek

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The first book Trading Chaos 1st edition is all Elliott Wave........................

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Quoting taxgeek

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The first book Trading Chaos 1st edition is all Elliott Wave. The strange attractor that organises Chaos (new information) is the Elliott Wave structure. He has one really long chapter on using it. Even that isn't quite enough information. Best way to get a grasp is Robert Miner Dynamic Trading, which is a huge book and one of the few worth its price. Miner applies it in practical rather than theoretical ways as does Williams. They complement each other nicely. Yes the the 162% line is the normal projection for the end of various waves. Williams does this a bit differently but obtains a like result. The object is to create a zone in which price is likely to turn. If the 1st wiseman occurs in that zone, you've got about as close to a sure thing in trading as you will find, especially if it is also accompanied by an obvious change in fractal (smaller bars). The 1st wiseman, I think, is what he refers to as a squat bar in the first book. He's really just attempted to take concept and simplify it so that wave analysis is less important. A few indicators are easier for people to comprehend than Elliott Wave, which requires a lot of study and more space than he has in his fairly small books. I think he found that out with the first one and then tried to dumb it down in the next two. The system as presented in the 2nd edition of Trading Chaos does work, but it will work much better with the 1st edition in the back of your mind. I originally looked at the Alligator system of New Trading Dimensions and decided that it was just too slow, with two many quirky signals. Trading Chaos 2nd edition was a big improvement. In reading a post on another forum, I discovered that the first book had been based on Elliott wave. The poster said that he used the system in the second edition, but entered pretty much unconsciously based on the first book. Bells went off, because I was already using Miner's methods. Got the 1st edition and saw a huge disconnect between what was in there and the other two. Went back reread the the others and realized how they in fact connected. He really had not changed the way he trades at all. Just created a different presentation for it, probably to sell more books, after all people love mechanical systems, but there was nothing mechanical in the first book at all. It was purely about finding the end of a wave and getting in at the start of the next one, which I have decided is the simplest and most profitable way of trading, because when you do that "you want what the market wants" always. Sad thing is, used without the first book, his systems are both weak. He does point you back by saying that all the methods are profitable and by saying that he discussed the Elliott Wave in the 1st edition. The 1st wiseman is a good initiating signal, but if you look at the chart sometimes when they occur price will only go a short distance before turning back and stopping you out. As he says at one point about price action patterns in general, for every good one he can show you five that would lead to losses. The question is which wiseman should you trade. The answer is: the one at the end of a major wave on the fractal that the pair is working on.

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Quoting shiva

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Hi guys, is there an indicator to identify bullish/bearish divergence bars?

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