Chaos Strategy - Mid term and long term trading.

Quoting k3iroll

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If I understand the concept correctly .. for a bullish divergence bar .... the bar should have a lower low than the previous bar and close on the upper half of the bar ... and also the AO must be below ZERO and it is RED. The price bars must also have angulation. Then, by following this rule ... the first W1 is a valid one, while the second W1 is not, since the AO is green.

Please let me know if I have the wrong understanding on this concept.

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Quoting Bull

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Hi k3iroll

I'm agree with you, the second one isn't a W1 because the AO is green.

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Quoting Richard7

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According to the "rules" as I understand them, I think your assessment is correct. However, Taxgeek is referring to the fib projections and apparently relying on them as a filter/confirmation of the end of the move moreso than the color of the AO. I've been fiddling around with the chart to come up with the correct fibs but I can't seem to get them. Taxgeek, when you get the time, can you draw for us the correct lines and projections for this EU 1 hour chart? And maybe some other examples if you have them around?


Thanks,
Richard

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Quoting arcus

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I started to realize the importance of what really chaos is after doing morning pages for few weeks. Believe me, when you done that, you will trust yourself more than ever before and the result as BW mentioned will automagically come to you.

Best of Luck and Happy Trading!
-arcus-

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Quoting sonicdeejay

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Arcus,
I am so impressed with the way you understand the market, .. good job buddy...and 1 thing I'd like to find out..what is the morning pages you are trying to say? care to xplain??

Sonic

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Quoting Forex37

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Hi arcus,

thanks a lot for your great and enlightening posts. When you mentioned morning pages (BW wrote, when analysing losing traders, all of them were without them) you might mention AT as well. Just cause BW is stressing it.

When you mention ChaosII is just training wheels, what else in addition would you think to be recommendable? FIbs, S/R,......?

Thanks

Forex37

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Quoting Richard7

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Taxgeek,

I have some questions yet. I'll just put 'em in where you have already commented.....


Correct. That's the way Williams actually does it. You have to realize that the system presented in the book is a beginner's system. It's like training wheels for a bicycle. His stated goal is that you trade without losing huge amounts of money until you have time to learn to trade properly and gain a full understanding of the charts. The system, as presented, accomplishes this in admirable fashion, but it's not the end of what he wants you to learn, nor will it make you a professional trader. It may allow you to stick around long enough to become one though. The chart in my last post has the fib confluence on the 4hr Eurusd. That's the chart I actually trade off of.The framework of lines in the background are absolute fibonacci.

There are many lines on that chart, and I can't tell where you have drawn them from. I understand you are drawing the retracements, but are they all drawn off the 4 hour chart? Yes they were.

There was also confluence there as fib sets were coming to an end on all of the larger fractals of the Elliott wave.

Do you draw fibs from all the fractals? I draw fibs from all retracements, sometime from waves of the same type.

It was going no farther than the red line at the bottom of the chart.

What is that red line? End line for the absolute fibs on that particular fractal. That's proprietary so I can't explain further.

Sure enough in trolling through the time frames, I found the proper wiseman on the 5 minute chart. Divergence was ending on the AO.

Divergence on the 5 minute or 4 hour? 5 min

Bars were moving onto a smaller fractal (Williams magic bullets that kill trends).

I don't know what a "smaller fractal" is. I either missed it in the book or didn't give it proper consideration. Do you mean the distance between the fractals is getting smaller? And if so, once again are we talking 5 minute or 4 hour chart? Divisions of the market according fractal geometry. When trends end the shrink and tend to drop to a lower fractal division. When they do I usually follow them down to a smaller time frame chart.

All was right with the world to go long. I could have put a stop 6 pips away and never had it challenged, but I don't use them at all anymore.

I like this; there's little worse than getting stopped out by one pip then watch it take off in your direction.

I just closed it out for the weekend a bit ago. The wave had reached the 161.8 fib line off the last retracement (that's what you want to draw the fibs on: retracements. In an up move pull from the top of the retracement, In a down move pull up from the bottom That will give you the retracement projections. There are also projections and expansions off waves and projections of time. I mostly just use the retracement projections, but the idea is the more that get together the merrier.) and getting ready to retrace. No point in holding through the weekend. It will drop back to about midways this last move and then go again. Trading's fun, when you trade virtually without risk, and there's more money in your account at the end of the week than at the beginning.

I don't mean to be picking nits, I'm just trying to understand what you're doing. As I mentioned before, you seem to have an understanding of what I have been missing. I appreciate your time and effort.
Hope this helps. What I've done is combine the work of 5 people into a trading style that works for my personality and psychology. It's hard to explain in a post on a forum. I think each trader has to do the same thing that I have. You've got find style and methodology that you personally are comfortable with. What works for me may not work for you. I like to take risk, but I don't like to lose. So I've found a way of trading that lets me go for the tops and bottoms without much in the way of losses. Bill Williams describes three different types of traders: Explorers, crew members, and landlubbers, and how he has helped all three types derive trading systems suited to them. What works for one will lose for the other. I fiddled around with a lot of systems and stuff. I figured if they worked for other people, they would work for me. They didn't. I did quite well on demo, then I proceeded to pretty much blow my real account. I just kept going at it until there was very little left. Then I gave up and set forth to learn to trade. After quite a few months of demo work and study. I came up with what I do now. Then I set out to trade with the remains of the live account using penny lots. I now have it all back with quite a bit of interest . I've never added another cent of my own money to that account.
Here's a shot of the one hour with some projections off retracements and one expansion off the first wave. They all pretty much collect in one place, and what I want to see is price get into that zone before I trade. When I do this on the 5 minute, it doesn't matter too much where in the zone I enter, because it's not going to make a big enough move to get me out. Even the market manipulation the other day didn't get me out (no stop). I was unexpectedly way in the hole, when I got up the next morning and looked at the chart, but I didn't panic and took time to figure out what was happening. I waited for the up move to end, and then threw everything I could in short. That was a really good day. As Arcus says "want what the market wants."
Thanks,
Richard

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Quoting charvo

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These days, I keep seeing holy grails, hoho.

Many Thanks to the Stone Trader.

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Quoting dawveed

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Hi there traders,

I have attached one pic of the EURUSD H1, and as you can see, there is angulation ok, BDB ok, and AO ok, but it's still a bad trade...
If someone can explain,please let me know.
Thanks..

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Quoting arcus

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You understand what Wiseman 1(technically) is, but you still don't understand the concept of Wiseman 1. Wiseman 1 = Gambling phase. Do you always win when you gamble? When you loss, it does not necessarily a bad trade since you point out that angulation is ok, BDB is ok. Bad trade for me is when you make mistake that shouldn't be made. e.g you don't follow the rules. In this trade, it's a good trade, but you just don't get the result. Hope it helps. Happy Trading!

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Quoting arcus

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You understand what Wiseman 1(technically) is, but you still don't understand the concept of Wiseman 1. Wiseman 1 = Gambling phase. Do you always win when you gamble? When you loss, it does not necessarily a bad trade since you point out that angulation is ok, BDB is ok. Bad trade for me is when you make mistake that shouldn't be made. e.g you don't follow the rules. In this trade, it's a good trade, but you just don't get the result. Hope it helps. Happy Trading!

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Quoting Dellyx

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Is there somewhere other than buying a book that explains this in more detail? The powerpoint was good but it was like giving a simple outline with many specifics missing (i.e. what are the fractals aand how do you use them to add to a trade). I would very much like to try this out.

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