Break on 240 min. chart

2009: + 78.06%, Maximal Drawdown: - 12.03%.

EUR/USD Chart H4 (240-minutes)

Trading system based on Bill Williams's classical works.
Used Indicators: Fractals, Alligator (Jaws period-13, Shift-8; Teeth period-8, Shift-5, Lips period-5, Shift-3)

Trading system: Entry orders execute at the breakout of fractal level. Overcoming of a given level by the next price movement indicates the formation of pulsed price movement in the direction of the developing trend, which contains the potential profit. In practice, entry orders are exposed above (below) the extremum of working fractals. Protective stop orders are placed at a distance of 40 pip of entry orders and take profit orders – at a distance of 100 pip. These values are the result of optimizing on historical data and validated by many years of practice and supervision of the market.
Most of the time markets are in a trading range, and only the remainder of the time we can observe the direction of motion, which are most favorable for profit.

In order to improve the results of this “trend system” and significantly reduce the number of false alarms in the range we use a set of filters:
1) Orders are placed only on the first fractal - only by the fact that after the first touch of alligator's red average line.
2) Internal fractals are ignored - fractal between price and the opposite edge of the alligator is nonworking.

The system also provides escalating of volume of positions. The input volume is calculated so that after first profitable transaction to deduce the account in plus a standard input. Based on the ratio of loss / gain, equal to 40/100 points, increase in volume after each taken loss occurs to factor 1.4. After the first profitable realization the volume comes back to a reference value.

Annual Report 09

Current Situation:

We placed pending order: SellStop EUR/USD 1.3576

stop-order 1.3616, limit-order 1.3476

And we're waiting, when order will be executed ....

We, Dmitry Stepanov, Mikhail Makarov and Alexander Lezhepekov – are a team of professionals with risk-management and asset management experience since 2004 and using this strategy since 2009.

The market had gone beyond our warrant. We look forward to the formation of new signals.

We placed new pending order: EUR/USD buystop 1.3791; stop 1.3751; limit 1.3891

Orders exposition:

1. Sellstop 1.3576, stop 1.3616, limit 1.3476 (size 2 lots)
2. Buystop 1.3791, stop 1.3751, limit 1.3891 (size 2 lots)

We'll follow the market

Thank you for sharing. The information presented so far is very interesting, in particular the results of 2009.

Three questions.
The complete Bill Williams Chaos Strategy uses the awesome oscillator. Is there a particular reason why you don't use this indicator or the other elements.

In your experience, have you found that EURUSD works best with this strategy

Why is this thread in the commercial section if it will only be discussing Bill Williams strategy which is already presented in the Trading Systems section.

Thank you


fxpilot

Thanks for questions

1. Our strategy isn't Bill Williams's strategy in the pure form though we use his fractals and a set of sliding averages (alligator). When we were developing our trading system we aimed to make it simple and excluding uncertainty at decision-making as much as possible - therefore are used only two indicators. We don't use other indicators for simplicity and unambiguity.
(Concerning fractals: Concept of fractals isn't Bill Williams's invention, also as well as use of this concept in the financial markets - it was introduced in Finance by Mandelbrot. And descriptions of the market by Bill Williams are too simplified. The concept of fractals, the randomness/nonrandomness, described by Edgar Peters in his works, is much closer to us. The deep understanding of these principles helped us to construct our trading system.)

2. We consider that the various strategies are able to make profit in FOREX trading, among other things on course EURUSD. We suppose our trading strategy has shown quite good results, mainly because of methods of capital management. We consider that such trading system will work on other rates of exchange, with changed parametres such as the size of stop loss, take profit, configuration of averages in an alligator and initial volume of entry orders. From our experience, it will be most bad to work amongst the basic currency pairs on a course pound/dollar.

3. We offer capital management services, based on our trading strategy, and training to work on it. As I already wrote, this trading system isn't Bill Williams's strategy in the pure form. Classical Bill Williams's strategy with high probability will be unprofitable on FOREX. From our experience, without our assets management system profitableness of system will be very low. Only by taking into consideration all these important changes in Bill Williams's trading strategy, which we have brought, it was possible to construct effective trading system. We will show in this thread as our trading system works in 2010.

Now We have open position:

EUR/USD 1.3576, stop 1.3616, limit 1.3476 (size 2 lots)

Update: We have got stop at 1.3616.

Value in pending order will increase to 2.8 lots:

Buystop 1.3791, stop 1.3751, limit 1.3891 (size 2.8 lots)

Hi AlexLezh,

Thank you for your response. I have been studying the use of fractals for some time now and I agree that they are of great value in trading. I look forward to the information that will be shared here.

Risk management seems to be an integral part of your approach (which it should be) and this has resulted in the great performance for 2009. This in and of itself is a great point! Happy trading.

fxpilot

Dollar exchange rate reaching the maximum levels against the euro over the past 9 months. If the situation in the U.S. economy will continue to improve, the country may refuse further injections of liquidity. In addition, the IMF is going to realize their foreign market stocks, which also supports the dollar; in a short period of time we have reduced by more than 200 points!

However, the trading system does not need such arguments

We modified order EUR/USD BuyStop 1.3791, stop 1.3751, limit 1.3891 (size 2.8 lots) --> to Buystop 1.3657, stop 1.3717, limit 1.3757 (size 2.8 lots)

The Fed decided to bump up its discount rate, at which it lends to banks, by one-quarter point to 0.75 percent, EUR / USD quickly dropped from 1,360 to 1,345. Buystop 1.3657, waiting for the return rate higher than 1.36 before put Sell-stop order.

We have on 240 min chart new lower fractal 1.3442. The price touched alligator's red average line. Therefore we placed new pending order: EUR/USD sellstop 1.3439, stop 1.3479, limit 1.3339 (size 2.8 lots)

We have new lower fractal 1.3574.
We modified order EUR/USD sellstop 1.3439 (size 2.8 lots) --> to Sellstop 1.3571, stop 1.3611, limit 1.3471 (size 2.8 lots)

Our opened position EUR/USD Buy 1.3657 was closed by stop-order at 1.3617. Value in pending order Sellstop 1.3571, stop 1.3611, limit 1.3471 was increased to 4 lots.

The situation is developing dynamically. The position was opened to sell EURUSD 1.3571. Transfer of stop-loss in profitability may be only after reaching the level of 1.3531

Stop-loss sell order EUR/USD had been rearranged to break even.

We got stop-loss at 1.3571 in break-even area. We still have pending order BuyStop 1.3694, stop 1.3654, limit 1.3794 (size 4 lots)

Update: We placed new order sellstop 1.3493 stop 1.3533 limit 1.3393

We modified order BuyStop 1.3694, stop 1.3654, limit 1.3794 (size 4 lots) --> to Buystop 1.3628, stop 1.3588, limit 1.3728 (size 4 lots)
We also have open position sell 1.3593, stop 1.3533, limit 1.3393 (size 4 lots)

Update: our position sell 1.3493 was closed by stop-order at 1.3533. Value in pending order BuyStop 1.3694 was increased to 5.6 lots.