Chaos Trading System

Comments above, apply to the USDCAD 60 minute here.

http://www.elkvalleygold.com/Forex/F...%20Jan2210.jpg

One more time I'm completely in tune with what you see ! I'm ready to take some on the short side, but I agree that there's some room up. No hurry to enter...

Bye !

Hello, here's a chart for AUDJPY.

We had a nice double bottom, corresponding to a divergence on the AO. Usually it means that the current trend is running out of steam....

If AO will cross the Zero line, we will have the minimum requirement for a wave 4.

Hello everybody,

Here's a longer time frame. The pair seems to find some sort of support at the 50% of Fibonacci retracement level....

Today, we have a lot of news, be careful !

I like that chart and your thoughts are in line with what I'm thinking as well. If the FOMC statement doesnt shock anybody I think we could move into a wave 5 down.

I sure like your charts star. I wish GFT had those chart capabilities.

Here is a chart for EURUSD. this is a "By The Book" one ! (So far

Prices are now at the 61.8% Fibonacci extension. The target for a wave 5.... When W5 does not fail !

We have now 3 DB, a lot of divergence on the AO.... There's a possibility for a sharp move up (wave1), then a retrace of 38.2 to 50% (wave 2). Then, wave 3....
But, the higher time frame shows more room for the down side with a possible target in the 1.3750 area....

I hope this will help !

One thing I have noticed that might be a small clue towards wave counts.

Check where the AO goes really flat, like it does on the last red section of the AO in the chart on post 563. That AO flat area, is often quite recognizable as a B wave.

When you look at your charts keep an eye out for that characteristic flat B wave appearance in the AO.

Just one more clue that sometimes leaps right out at you.

OH ! Interesting. Let's try to follow that !
Thanks Wab

Maybe the wave counted as attached

I really don't like to trade seriously from 5 minute charts. However, this one of the AUDJPY is a classic in terms of Chaos, AO and Fractal behavior.

It may even be good practice to look for charts like this on the short time frames to imprint the AO and alligator behavior on our brains. They are always part of the larger time frame waves anyway.

So, I thought I would post this as an example that shows that the AO and fractals work on any time frame.

I wouldn't want to watch a chart like this for one hundred and forty three five minute bars? (12+ hours).

Nice stress free daily trades are much better.



http://www.elkvalleygold.com/Forex/F...20fractals.jpg

Hi Wab,

Thanks for sharing. In your experience have you found that taking the first fractal breakout following price action crossing over the Alligators Jaw, works well.

fxpilot

Nice chart Wab. Great example!

Mostly I think if you stick with BW ideas they are the easiest and best. Only take fractals that signal above the red alligator for long trades and the opposite for shorts.

If I try and get smart and take a lower fractal in a shorter time frame it sometimes works out when the higher time frame confirms it as a good entry and the higher time frame fractal subsequently gets taken out. You have to be pretty sure that a turn in the wave structure has happened when you try that. That can be costly when you get too self-sure and your internal wave count is wrong.

Better to try for less, and be more certain about that, then try to force a bit more from a trade.

But ...I really have spent a lot of time trying ideas to beat the fractal entry as BW teaches it. I haven't really done too much that is reliably better though I think you can gain a bar or two on a fractal when the circumstances are right.

I would really like to hear opinions on this one:

If you trade from the inside of a fractal (or the right side of a fractal) that can help. You have to think of fractals a whole lot differently.

If you use your left hand to represent a fractal.

You enter a trade above the thumb of a down fractal (when your left hand is pointing down, palm toward you.) Exit at the thumb of an up fractal. (When your left hand is palm away from you.) Trading from thumb to thumb.

BW mentions thumbs in Trading Chaos, but I didn't think that he was thinking about trading the area in between one fractal and another as he usually trades breakouts past fractals.

Here is a daily AUDJPY chart that shows two thumb to thumb trades. (T2T)

Thumb 1 to thumb 2 (305 pips) then reverse and thumb 2 to thumb 3 (158 pips.)

You can see how thumb 1 gets you in 5 bars earlier than the fractal signal above the red alligator line.

Thumb 2 gets you in earlier as well and gains 35 pips over the fractal entry, but it does expose you to more draw down. You would use the AO to keep you from placing trades against the trend.

So, I have revealed one of my Chaos secrets or what I thought to be one anyway. Maybe it is already in use elsewhere. If not, I claim it.

I really respect the expertise on this thread and look forward to hearing from the masters. Is this a new chaos idea? Is it useful? Or did I just not understand what BW was saying about thumbs in the first place?

If it useful, I can still take you further inside the fractal, but let's see the reaction to this first.

http://www.elkvalleygold.com/Forex/F...to%20thumb.jpg

Hey guys, I am using the gator for entries. I let the gator confirm direction, then place a stop order at the new high/low to enter the market. It works well on M30 EURUSD but I mis alot of trades because of my schedule. Has anyone seen or heard of a gator with an alert? If so can you post it or msg me with a link? Thanks all.

That is really interesting Wab. I personally have never heard of it. How often do you use it? Do you have any other criteria you use when you take this type of trade? How successful has it been for you overall?

I use the AO to give direction and beyond that, it is something that I have only experimented with. I can make it work from deeper in the fractal but that gets a bit more complex.

The BW stuff works so well it is hard ot improve on, but this is one of a couple of twists that I have played with. Sort of contrary BW thinking.

Since it is fractal based, I thought this would be a good place to throw it out for debate.

Looking at some charts and live action today I believe you are on to something. I want to monitor this to a greater degree as it could have tremendous results.

It is funny how often we look at charts and really don't see them. There are a few other BW fractal things that show up when you turn the process inside out.
Try a few charts and we can play with ways to use the T2T.

Hi,

I never heard about this Thumb. Can you please give more sample how to identified the thumb using AO ? It is have to be after fractal ?

or we identified the higher time fractal and trade it in lower TF ?


Thanks,