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Profitunity (Chaos) Trading System by Bill Williams

  • #1,181
  • Jul 13, 2011 12:17pm Jul 13, 2011 12:17pm
Quoting dvarrin
I would like to create an indicator thta will alert me when there is a fractal breakout and the alligator is sleeping.

Actually, to determine if the alligator is sleeping, I'm checking if during the 15 last bars, there is a bar for which the three alligator lines are not in the correct order (green red blue or blue red green).

For example if on the 5th bar before the last one, if the green line is between the red and blue lines, I consider that the alligator is sleeping.

Has anybody a better idea on how to determine if the alligator is...
Believe it or not, that has already been done. ZL on AO = sleeping.

Compare the Alligator vs AO when its at Zero line
  • #1,182
  • Jul 13, 2011 12:55pm Jul 13, 2011 12:55pm
Quoting almo
Believe it or not, that has already been done. ZL on AO = sleeping.

Compare the Alligator vs AO when its at Zero line
Wwoooww! Easy!!!

Thank you almo :-)
  • #1,183
  • Jul 13, 2011 1:49pm Jul 13, 2011 1:49pm
This is all been done!
Blue line is roughly the AO itself.!!
Time to trade the shit out of it

cheers

"Don't talk about it , get on with it" James Cann
  • #1,184
  • Jul 15, 2011 1:56am Jul 15, 2011 1:56am
I saw there are a lot of EA for trading Chaos, but it is always said that they are no profitable. Does that mean that Trading Chaos is no more working in today's market?

The rules are pretty clear and if we can be successful when using this strategy manually, it should be possible to have good results with an EA.

Daniel
  • #1,185
  • Jul 15, 2011 3:59am Jul 15, 2011 3:59am
Quoting dvarrin
I saw there are a lot of EA for trading Chaos, but it is always said that they are no profitable. Does that mean that Trading Chaos is no more working in today's market?

The rules are pretty clear and if we can be successful when using this strategy manually, it should be possible to have good results with an EA.

Daniel
Daniel!

I'm going to put some effort in this. Its not a tug war or something. I have done my morning trading and sitting tight on my profits for now. So I thought I'd review the book quickly and quote something realy meaning ful out of it. I hope you enjoy it. you will see that I have given it fair amount of time, so I hope you read it and I hope this would answer your query. cheers



What is? and what is the the difference between "Linear mathematics/geometry" and "Fractal (non-linear) geometry" and science of chaos. ?

I quote something from Trading Chaos,

""laws" of triangles is that "the interior angles of
any triangle will always total 180 degrees, no matter what the
shape of the triangle." That is true, but 'only' in the gravitational
field of the earth. As a spaceship leaves the earth's gravitational
field on its way to the moon, the total becomes more
than 180 degrees because of the curvature of space." ...

the law of triangles is a specific
truth and not a universal truth. That concept will become extremely
important as we do an in-depth study of our market
maps. ...

Einstein left us with only
one constant-the speed of light. Quantum mechanics took
that away. (my comment: Because now we believe that there could be many different things that could go much faster then light)

The science of
chaos gives us a new and more appropriate paradigm (map) to
view the world, the markets, and our personal behaviour....

Chaos does not refer to randomness; just the opposite is
true. Chaos is a higher form of order where randomness and
stimuli become the organizing principle rather than the more
traditional "cause and effect"

The
normal
distribution
stands out in the
experience of humankind
as one of the broadest generalizations
of natural science. It has been used as a
trading instrument in the markets, in the physical
and social sciences, and in medicine, agriculture, and
engineering. It is an indispensable tool for the analysis and
the interpretation of the basic data gathered by observation.

....

Because the markets are a non-linear, turbulent system produced
by the interaction of human beings, price and time actions
are the perfect places to seek fractal structures.

The primary purpose of this book is to show you how to
trade using fractal geometry. Twelve years of intensive research
have been dedicated to the fractal geometry of the markets...

Mandelbrot set. This may very well be the keystone that connects
Fibonacci numbers, the Elliott wave, and fractals into one
coherent paradigm.
In our own original research, the Profitunity Trading
Group has discovered several repeating patterns that allow a
degree of predictability about future market movements that
are quantum leaps ahead of the accepted current technical
analysis.

The fractal is also a measure of irregularity. The more irregular
and choppy a market is, the larger will be its fractal
number. The fractal number of a portion of a move will always
peak at the turnaround point. Therefore, all market trend
changes are accompanied by a higher fractal number than the
bars leading up to the change in trend.
(my comment: The distance between upper and lower AIMS levels is deep/high during choppy periods)


Most novice traders search for a
mechanical system that will make them rich and successful if
they can just put the pieces of the market puzzle together....


the market is designed to destroy any successful mechanical
system. All mechanical systems die! They are linear tools and cannot
accurately or adequately describe a non-linear market.

Conclusion:
1. linear trading systems are unsuccessful in describing and capturing profits from the market.
2. EA is a linear tool, and coded with "mechanical system". It dies.

lastly, have you ever met an EA millionaire? (may some one out there, there is one, but I have not met one yet)
  • #1,186
  • Jul 15, 2011 4:24am Jul 15, 2011 4:24am
But I don't understand. The rules in the book "New trading Dimensions" are clear. Whatever we do, trading manually or using an EA, sshould give the same result! What would you do manually that an EA base on that strategy would not do? There is no filtering rules for trend direction on higher timeframe or anything like that.

Even an EA should be better than when trading manually. It can close all orders in 1 or 2 seconds.

This strategy, even traded manually is like a linear trading system.
  • #1,187
  • Jul 15, 2011 5:08am Jul 15, 2011 5:08am
Daniel
I understand your point. EA just cannot handle the human "intuition" bit.
EA cannot do "morning pages" and get inspiration.
EA cannot get you to the level of "competent trader" and it cannot
help you achieve the state of
"knowing without knowing how you know".

it was somewhere earlier in this thread we talked about EA. But I'll repeat one thing, "The right brain and the subconscious has a dormant EA. The symbol stays . By doing AT and Morning pages (mind exercises) one can turn the symbol to and let it do its thing".

Its the 4th and 5th level of trading. "where you know without knowing how you know". because you trade based on EA inside your "mind" connect the source of "chaos".

please ignore me if I sound a nut-case!

but if you insist i have the following ideas:

Entry Exit and MM based on AIMS levels. with rule for
AIMS break above/below Red line or all three. etc.

cheers
  • #1,188
  • Jul 15, 2011 5:20am Jul 15, 2011 5:20am
Quoting yousafzai
Daniel
I understand your point. EA just cannot handle the human "intuition" bit.
EA cannot do "morning pages" and get inspiration.
EA cannot get you to the level of "competent trader" and it cannot
help you achieve the state of
"knowing without knowing how you know".

it was somewhere earlier in this thread we talked about EA. But I'll repeat one thing, "The right brain and the subconscious has a dormant EA. The symbol stays . By doing AT and Morning pages (mind exercises) one can turn the symbol to and let it do its thing"....
But could you give me an example on a chart, where all the conditions are filled to enter a trade, but you're not doing, because of your intuition or the morning pages execercies? On my side, I would take any signal, except if there are some news coming soon and I'm trading in a low timeframe. It seems like intuition is going against the saying "Wants what the market wants".
  • #1,189
  • Jul 15, 2011 5:51am Jul 15, 2011 5:51am
Quoting dvarrin
It seems like intuition is going against the saying "Wants what the market wants".
No its not, when your "underlying structure" is in tune with that "underlying structure" of the market. You want what "chaos" wants.

Market is a product of Chaos (natural phenomena)
Humans a product of chaos, (natural phenomena)

Everything is energy

All that is around us and within originates from "singular source of energy"

Stuff comes from non stuff (quantum mechanics)

Human (we) connected to "source energy/god/universe/inner self/higher"
Market connected to "source energy/god/universe/inner self/higher self" (several names pointing to similar "universal fact")


When we are connected to source energy (in tune/ in the zone)
intuition, the pure knowledge that comes from the same source energy,
that created us too as well as our thoughts and markets leads towards
the right path. and hence we are one with the market and
"we want what the market wants".

our ultimate goal is to arrive at the "vituoso" level of trading.
"its a trance-ending experience"

cheers and kind regards

off to eat something now! nice conversing with you Daniel. Hopefully more later....
  • #1,190
  • Jul 15, 2011 5:54am Jul 15, 2011 5:54am
Quoting yousafzai
No its not, when your "underlying structure" is in tune with that "underlying structure" of the market. You want what "chaos" wants.

Market is a product of Chaos (natural phenomena)
Humans a product of chaos, (natural phenomena)

Everything is energy

All that is around us and within originates from "singular source of energy"

Stuff comes from non stuff (quantum mechanics)

Human (we) connected to "source energy/god/universe/inner self/higher"
Market connected to "source energy/god/universe/inner self/higher self" (several names pointing...
Thank you for your help! :-)) Nice to talk with you too ;-)
  • #1,191
  • Jul 15, 2011 5:54am Jul 15, 2011 5:54am
Quoting dvarrin
But could you give me an example on a chart, where all the conditions are filled to enter a trade, but you're not doing, because of your intuition or the morning pages execercies? On my side, I would take any signal, except if there are some news coming soon and I'm trading in a low timeframe. It seems like intuition is going against the saying "Wants what the market wants".

Perhaps rules for Setup 1 and Setup 2 could be used but its "subjective" and I dont know how to fit them.... give me ideas...what do you think?
  • #1,192
  • Edited 6:57am Jul 15, 2011 6:35am | Edited 6:57am
Quoting yousafzai
Perhaps rules for Setup 1 and Setup 2 could be used but its "subjective" and I dont know how to fit them.... give me ideas...what do you think?
Your rules 1 and 2 are all fine and the conditions are clear I think. For example for entry 1, alligator must be sleeping and there must be a valid fractal breakout and the AO should have crossed the 0-line is the direction of the breakout.

I looks pretty clear, but when you see that on a chart, do you always enter a trade or sometime your intuition is telling you not to do? As I said, on my side, except if there is some news coming and I'm in a small timeframe (< 15min), I would not enter a trade.

I'm not sure I understand , which idea you're looking for :-|
  • #1,193
  • Jul 15, 2011 7:10am Jul 15, 2011 7:10am
Quoting dvarrin
Your rules 1 and 2 are all fine and the conditions are clear I think. For example for entry 1, alligator must be sleeping and there must be a valid fractal breakout and the AO should have crossed the 0-line is the direction of the breakout.

I looks pretty clear, but when you see that on a chart, do you always enter a trade or sometime your intuition is telling you not to do? As I said, on my side, except if there is some news coming and I'm in a small timeframe (< 15min), I would not enter a trade.
News rules

No trading just before news. and at news time.
just after if it sets up and depending on news and how it behaves.


When in trade and profitable by big margin, could sometime give it a chance may be u get even bigger winner. but not recommended.

Intuition has a BIG part in my trading. I believe it is sharper and sharper the more I do my MP's and IT.

cheers
  • #1,194
  • Jul 15, 2011 7:30am Jul 15, 2011 7:30am
Quoting yousafzai
News rules

No trading just before news. and at news time.
just after if it sets up and depending on news and how it behaves.


When in trade and profitable by big margin, could sometime give it a chance may be u get even bigger winner. but not recommended.

Intuition has a BIG part in my trading. I believe it is sharper and sharper the more I do my MP's and IT.

cheers
I think I'll try to do those MP's. I've never given much interest to them so far :-(

I explained wrong about the news, but you understood right :-)
  • #1,195
  • Jul 15, 2011 12:41pm Jul 15, 2011 12:41pm
Quoting dvarrin
I think I'll try to do those MP's. I've never given much interest to them so far :-(

I explained wrong about the news, but you understood right :-)
This is because we are all connected and we understand each other as long as we "choose" to accept and understand each other. IMHO.

Its coincidence or what?
in my blog, before you ask the question I posted the following:

"To Choose to Choose or not to choose"


I'd like to quote something very important here.

"The market will always be a reflection of you"....
"if you are not having fun trading, you are doing it all wrong"....
"most important choice in the world is ,'either to choose to choose or not to choose'"
If you choose to follow a mechanical system you have not really chosen to trade the market.
and all mechanical systems will fail. You need to see through your need to be dependent on others.
"Your true nature is all you need. "

Let it show you what you do not need.

Listen quietly for a moment. Everything can change right now. Learning to hear this supreme secret is no more difficult than to "choosing" whether to swimming against the current or to let it carry you safely down stream. Let the secret speak to that secret part inside of you. Listen to it now. It is showing you

THE HOLY GAIL,

which is

Want What the Market Wants


Trading Chaos 2nd Edition p. 44
  • #1,196
  • Jul 19, 2011 6:15am Jul 19, 2011 6:15am
Hi, have anybody ordered Bill Williams' newest home course - is it of real value ? I mean is all theory touched much deeper than in latest book or it's repeat of the book ?
  • #1,197
  • Jul 20, 2011 2:07am Jul 20, 2011 2:07am
I've a question about the divergent bar. What do we do if we are long and there is a bearish divergent bar and the price breaks below the low of that bar? Should we stop and reverse?

Nothing is explained in the book about that?

Anybody has the 2nd version of the home study course explaining the method with the 3 wisemans? Which stop are they using? Only the 3 or 5 bars back?

Justine Williams told me that in their course, the AO signal is no more taken before we have at least a fractal entry.

And about pyramiding? Is there some more details about that? Should we pyramid if our orders are currently not in profit? If I have an open order already, and there is a new fractal breakout and my order is in profit, isn't dangerous to buy 5 or 4 lots on that one. Not every trade will give up to 5 or more signals and if we have 1 lot for the first order and 5 for the second one, then if it reverses we will have a strong losing trade. Any informations about that?
  • #1,198
  • Jul 20, 2011 3:18am Jul 20, 2011 3:18am
Regarding divergent bars, these are only important for the (possible) start of a new position trading cycle. When you are already holding positions (thanks to reverse pyramiding) you would NOT reverse those, but wait till they are stopped out - most probably in the next bar. So you will close at least 6 units. And you might place a pending order for the next cycle -starting with 1 unit only!!!!
This is my understanding of TC2ndEd -


Regards
Forex37
  • #1,199
  • Jul 20, 2011 3:43am Jul 20, 2011 3:43am
Quoting Forex37
Regarding divergent bars, these are only important for the (possible) start of a new position trading cycle. When you are already holding positions (thanks to reverse pyramiding) you would NOT reverse those, but wait till they are stopped out - most probably in the next bar. So you will close at least 6 units. And you might place a pending order for the next cycle -starting with 1 unit only!!!!
This is my understanding of TC2ndEd -


Regards
Forex37
unfortunately I have to disagree - purely using logic you have to stop and reverse on valid divergent bar( for validity I developed my own strategy).
  • #1,200
  • Jul 20, 2011 3:44am Jul 20, 2011 3:44am
Quoting Pip Assassin
Hi, have anybody ordered Bill Williams' newest home course - is it of real value ? I mean is all theory touched much deeper than in latest book or it's repeat of the book ?

The course has real value in that it covers in a whole different level of depth the material presented in the book. It is designed to break down the concepts and slow down your learning process to the point where you have an opportunity to really think about what Bill and Justine say in their books. There are also some minor tweaks to some of the techniques presented in the books as something has changed over the years but this is really something minor and not where the real value is. I would recommend the course unless you felt that all the material of TC2 is completely understood and mastered in which case you don't need it.

Hope this helps
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