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Profitunity (Chaos) Trading System by Bill Williams

  • #1,201
  • Jul 20, 2011 3:48am Jul 20, 2011 3:48am
Quoting Pip Assassin
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).

In my opinion divergent bars are the hardest technique in the Profitunity arsenal. Their probability of success is mostly dependent on angulation but they are only worth taking if the risk of the bar itself is quite contained. As for whether to reverse on a B/D/B it is entirely dependent on the situation and is quite difficult to pass a priori judgement on it. Generally speaking, it is worth reversing if we feel that we are at the end of an Elliott Wave of some kind and the AO corroborates that view.

Hope this helps
  • #1,202
  • Jul 20, 2011 4:01am Jul 20, 2011 4:01am
Quoting RbrTrader
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...
thank you for your reply, RbrTrader, if I may ask again, what was the most valuable for you from the home course ? Cause I'm very hesitant at the moment to buy it or not.
  • #1,203
  • Jul 20, 2011 4:05am Jul 20, 2011 4:05am
Quoting RbrTrader
In my opinion divergent bars are the hardest technique in the Profitunity arsenal. Their probability of success is mostly dependent on angulation but they are only worth taking if the risk of the bar itself is quite contained. As for whether to reverse on a B/D/B it is entirely dependent on the situation and is quite difficult to pass a priori judgement on it. Generally speaking, it is worth reversing if we feel that we are at the end of an Elliott Wave of some kind and the AO corroborates that view.

Hope this helps
yes, this is difficult one and only manageable with other indicators. BTW I don't use ELLIOTT on this - it's too back looking tool and you can always argue about recount, degree etc.
  • #1,204
  • Jul 20, 2011 4:25am Jul 20, 2011 4:25am
Quoting Pip Assassin
thank you for your reply, RbrTrader, if I may ask again, what was the most valuable for you from the home course ? Cause I'm very hesitant at the moment to buy it or not.
The most valuable thing I got out of the course was getting at the bottom of every indicator, signal and rule presented in the book. Only by slowly covering the alligator, the AO, fractals, entry and exit rules I got to figure out the ultimate reason for doing as suggested by Bill and Justine in their books. As as I said, if you feel that you grasped these concepts then the course will be just an annoyance as there isn't anything new or different that the books haven't covered. I'm quite a slow learner so for me the course was worth all the money I paid for.
  • #1,205
  • Jul 20, 2011 4:27am Jul 20, 2011 4:27am
Quoting Pip Assassin
yes, this is difficult one and only manageable with other indicators. BTW I don't use ELLIOTT on this - it's too back looking tool and you can always argue about recount, degree etc.
Remember what Bills says about the structure of the market. He said that the structure of the market is the Elliott Wave and the structure of the Elliott Wave is the fractal of the Elliott Wave so even if I'm with you that we are not too obsessed with the actual count of each wave and subdivision the AO is a great tool to figure out where we are in relation to the broader wave
  • #1,206
  • Jul 20, 2011 5:33am Jul 20, 2011 5:33am
Quoting RbrTrader
Remember what Bills says about the structure of the market. He said that the structure of the market is the Elliott Wave and the structure of the Elliott Wave is the fractal of the Elliott Wave so even if I'm with you that we are not too obsessed with the actual count of each wave and subdivision the AO is a great tool to figure out where we are in relation to the broader wave
Thanks a lot for your replies, appreciate it
  • #1,207
  • Jul 20, 2011 5:53am Jul 20, 2011 5:53am
Quoting Pip Assassin
Thanks a lot for your replies, appreciate it

Yes, very informative replies.

But regarding the original question re reversing a position after a divergent bar has occured -- I strongly disagree.

Regards

Forex37
  • #1,208
  • Jul 20, 2011 6:28am Jul 20, 2011 6:28am
Quoting Forex37
Yes, very informative replies.

But regarding the original question re reversing a position after a divergent bar has occured -- I strongly disagree.

Regards

Forex37
Think about it: if you don't have position and you have valid divergent bar setup, you take it, right ? So if you have position already, that logically implies you at least square position. In this case, cause dbar is wm1 which almost surely should be followed by wm2 and wm3 by Bill Williams theory, the most logical step is sq and reverse IMHO.
  • #1,209
  • Jul 20, 2011 6:35am Jul 20, 2011 6:35am
Hi everybody, this is my first message in Forex Factory. I´m very interested in Profitunity System. I´m studying it and i think it´s fantastic , in particular the aims tools.
  • #1,210
  • Jul 20, 2011 7:50am Jul 20, 2011 7:50am
Is there anything more in the course about the divergent bar? Because the angulation explained in the book is very subjective and very often there will be a second divergent bar in FOREX. Do they say something about the spread of the bar? Do we trade big divergent bars?
  • #1,211
  • Jul 20, 2011 8:56am Jul 20, 2011 8:56am
Quoting dvarrin
Is there anything more in the course about the divergent bar? Because the angulation explained in the book is very subjective and very often there will be a second divergent bar in FOREX. Do they say something about the spread of the bar? Do we trade big divergent bars?
in an interview bill said to take the divergent bar at the end of a trend
  • #1,212
  • Jul 20, 2011 9:02am Jul 20, 2011 9:02am
Quoting Pip Assassin
Think about it: if you don't have position and you have valid divergent bar setup, you take it, right ? So if you have position already, that logically implies you at least square position. In this case, cause dbar is wm1 which almost surely should be followed by wm2 and wm3 by Bill Williams theory, the most logical step is sq and reverse IMHO.
Assumptions: Bearish Diverent Bar, Trade sizes microlots

If you have no prior position -, place stop sell 1 microlot at wm1, another 5 at wm2, 4 microlots at wm3......

If your are already in a postition when the wm1 occurs, your tradesize will most probably be 6 or more microlots, because during the runup you would have added the reverse pyramiding way. If you would reverse your position now, you would go from LONG 6 to SHORT 6 microlots, i.e. sell 12 microlots.
But according to BW you close a position when your stoploss is broken OR when an opposite signal occurs: Close the psoition - Sell 6 microlots to go flat.

Now you have a Bearish Divergent Bar, so place an additional stop-buy for 1 microlot.

So before the divergent bar your position was 6 microlots LONG, after it is a SHORT position of 1 microlot.

My understanding. Correct me, if I`m wrong.

Regards

Forex37
  • #1,213
  • Jul 20, 2011 10:00am Jul 20, 2011 10:00am
As you wrote "But according to BW you close a position when your stoploss is broken OR when an opposite signal occurs: Close the position - Sell 6 microlots to go flat." - Divergent bar in my understanding is new, opposite signal. So you should sq and reverse IMHO.
  • #1,214
  • Jul 21, 2011 1:26am Jul 21, 2011 1:26am
Quoting Forex37
Assumptions: Bearish Diverent Bar, Trade sizes microlots

If you have no prior position -, place stop sell 1 microlot at wm1, another 5 at wm2, 4 microlots at wm3......

If your are already in a postition when the wm1 occurs, your tradesize will most probably be 6 or more microlots, because during the runup you would have added the reverse pyramiding way. If you would reverse your position now, you would go from LONG 6 to SHORT 6 microlots, i.e. sell 12 microlots.
But according to BW you close a position when your stoploss is broken OR when an...

I don't think your interpretation is what Bill and Justine said about stop and reverse at B/D/B. Their advise is to stop and reverse but treat the reversal as a new position. In other words if you're fully invested on the long side and get a bearish divergent bar with angulation you should close your position (in your example your 6 units of risk) but reverse only 1 unit to end up short only 1 unit of risk. Then upon emergence of the other signals you can fully build your short position. But you should never go from fully invested on one side to fully invested on the other side, especially on B/D/Bs as they are the most speculative part of the trading strategy.

As for angulation, the book and the course are quite clear in saying that it is subjective and visual as opposed to mathematical so there isn't a lot of extra information apart from developing the ability to spot when prices pull away from the alligator and give better angulation. This is a concept that I find elusive and I haven't managed to master yet but it has been said to be one of the hardest part of the whole Profitunity system.

Hope this helps
  • #1,215
  • Jul 21, 2011 1:50am Jul 21, 2011 1:50am
Thank you very much to everybody for your answers :-)

For sure that divergent bar is causing a lot of problems
  • #1,216
  • Jul 26, 2011 2:11pm Jul 26, 2011 2:11pm
Hey all...I am looking for TS code for the balance line trades (Bill used to call this the "walk the line" trades before). Whether a showme or paintbar study...can anyone point me in that direction?
  • #1,217
  • Jul 28, 2011 3:44am Jul 28, 2011 3:44am
Quoting RbrTrader
I don't think your interpretation is what Bill and Justine said about stop and reverse at B/D/B. Their advise is to stop and reverse but treat the reversal as a new position. In other words if you're fully invested on the long side and get a bearish divergent bar with angulation you should close your position (in your example your 6 units of risk) but reverse only 1 unit to end up short only 1 unit of risk. Then upon emergence of the other signals you can fully build your short position. But you should never go from fully invested on one side to...
I am not sure if this question has been asked yet though by show of virtual hands, who has taken the Profitunity course?
  • #1,218
  • Aug 6, 2011 10:05pm Aug 6, 2011 10:05pm
http://www.forexfactory.com/showthre...82#post4845782
  • #1,219
  • Aug 13, 2011 2:59pm Aug 13, 2011 2:59pm
I trade Bill Williams Chaos System as well but I added the Heinkin Ashi to my charts to see when the up and or down trends start and end they actually get me out before the original system does preventing slipage and added up more pips of the course of weeks and months every pip counts in this business expecially when you start getting up there in the amount of lots you open up. just a little added conformation that adds some pips by aliminating some of the slipage.
  • #1,220
  • Aug 13, 2011 3:11pm Aug 13, 2011 3:11pm
heres the system with the henin ashi chart it actually gets you into the trend earlier and gets you out of the trend before it retraces back to green alligator line those pips add up over time and excpially when your dealing with big lot sizes that is alot of profit left on table
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