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Profitunity (Chaos) Trading System by Bill Williams

  • #1,221
  • Aug 16, 2011 7:01am Aug 16, 2011 7:01am
This is a nice trade I have going on right now in the EUR/USD
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  • #1,222
  • Aug 16, 2011 8:06pm Aug 16, 2011 8:06pm
Hi there
just started studying this Stuff

I've read B.Williams first book,and now I'm studying the 2nd one

Please could you share your template(I love HeikenAshi )?

And What about your experience with this method?
thx
Account deleted
  • #1,223
  • Edited 7:27pm Aug 20, 2011 7:15pm | Edited 7:27pm
Hey guys, I've done some testing with Bill William's system on EUR/AUD on the daily TF, for the past 8-9 years(don't remember). I used all the rules right like he explains. I did the adding of position always 1% of my balance.

I did this some months ago. The return was 277% (!!) and the maximum drawdown was 25%, which makes it the best system I've ever seen. Remember, this was only in 1 pair, if the results were like this on 10 pairs the account would easily have grown 3000%+ !!

In the time I disregarded it because of the drawdown, 25% is kind of big. But this is without diversifying (which we can achieve trading more pairs/gold/silver), and I can just risk less on a trade to get lower drawdowns. I seriously don't know what I was thinking at the time, these are excellent results.

Anyway, I'm beginning to make an EA for MT4, and I wanted to know if any of you wanna help me. And I also have a question regarding the adding of positions. How are we supposed to add positions? Add always the same amount as the first position? Adding the same amount is scary, because some trades can easily make me lose 8% of my account (if I risk 1% per trade).

The excel sheet is here (can't upload xlsx files on FF for some reason): http://www.2shared.com/file/AtwTH5fy/EURAUD.html
In attachment is the balance.
Attached Image
  • #1,224
  • Aug 20, 2011 9:43pm Aug 20, 2011 9:43pm
Quoting Jasus
Hey guys, I've done some testing with Bill William's system on EUR/AUD on the daily TF, for the past 8-9 years(don't remember). I used all the rules right like he explains. I did the adding of position always 1% of my balance.

I did this some months ago. The return was 277% (!!) and the maximum drawdown was 25%, which makes it the best system I've ever seen. Remember, this was only in 1 pair, if the results were like this on 10 pairs the account would easily have grown 3000%+ !!

In the time I disregarded it because of the drawdown,...
Hi there
I'm with you on the track
I've studied all BW books and I've found this SIMPLE walktrough


http://www.megaupload.com/?d=6YQFZCRG

hope it helps

about adding position,I guess we should walk the 1% way
simple & scary
Account deleted
  • #1,225
  • Edited 10:27pm Aug 20, 2011 10:15pm | Edited 10:27pm
Quoting swissforex
Hi there
I'm with you on the track
I've studied all BW books and I've found this SIMPLE walktrough


http://www.megaupload.com/?d=6YQFZCRG
That's a very nice pdf, it's just like the resume I did today to remember the system.

Quote
about adding position,I guess we should walk the 1% way

But doesn't the 2nd edition book say anything about it? I've only read the 1st edition.
  • #1,226
  • Aug 21, 2011 7:35pm Aug 21, 2011 7:35pm
Quoting Jasus
That's a very nice pdf, it's just like the resume I did today to remember the system.



But doesn't the 2nd edition book say anything about it? I've only read the 1st edition.
Mmumble

Mr.W talks about adding 1 Contract for each signal
I guess we should adapt Profitunity to Forex Market.

One good filter could be fundamental analysis,i.e I'd watch carefully USDCHF,EURCHF,XAGUSD and XAUUSD on the next weeks and apply Profitunity rules to those instruments.

From my experience best adding signals usually come from AO,Fractals and ZONE bars. AC very often overlaps fractals and AO signals..

What I like most about ZONE bars is jumping trailing stop technique,usually I start moving my skirt protection after 3 ZONE bars of the same color(not 5 like Mr.W says)

just my 2 cents
Account deleted
  • #1,227
  • Aug 25, 2011 12:51am Aug 25, 2011 12:51am
I made this one yesterday one the GDP/AUD
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  • #1,228
  • Aug 25, 2011 2:43am Aug 25, 2011 2:43am
The London Open Breakout
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  • #1,229
  • Aug 25, 2011 5:53pm Aug 25, 2011 5:53pm
Quoting Jasus

And I also have a question regarding the adding of positions. How are we supposed to add positions? Add always the same amount as the first position? Adding the same amount is scary, because some trades can easily make me lose 8% of my account (if I risk 1% per trade).

The excel sheet is here (can't upload xlsx files on FF for some reason): http://www.2shared.com/file/AtwTH5fy/EURAUD.html
In attachment is the balance.
Here is a suggestion from post 56 (Not by me) :

"First, my position sizing and risk management rules tell me exactly my lot limit for a trade; and for me "a trade" begins when I get on board a directional move and includes any subsequent add-on lots. A trade is opened only on a signal from one of the Three Wise Men. Here is how I normally allocate that lot limit:

  1. By my rule, I commit only 1 lot per buy/sell signal.
  2. Once a trade is opened, a signal is valid only if its fill will be beyond the Alligator in the direction of the trade.
  3. As long as my trade is profitable, I take all valid Profitunity trade signals until my lot limit is reached or the trade is closed. Valid Profitunity trade signals include those described in Bill Williams' second book, New Trading Dimensions.

Before adding on to a profitable position, pay strict attention to how the add-on will impact trade risk limits and where breakeven is!"

To post an xlsx file you might try to zip or rar it first.

  • #1,230
  • Aug 25, 2011 6:22pm Aug 25, 2011 6:22pm
Quoting Jasus
Hey guys, I've done some testing with Bill William's system on EUR/AUD on the daily TF, for the past 8-9 years(don't remember). I used all the rules right like he explains. I did the adding of position always 1% of my balance.

I did this some months ago. The return was 277% (!!) and the maximum drawdown was 25%, which makes it the best system I've ever seen. Remember, this was only in 1 pair, if the results were like this on 10 pairs the account would easily have grown 3000%+ !!

In the time I disregarded it because of the drawdown, 25%...

I used to have an EA built for Profitunity way back in the mt3 days. One thing people need to keep in mind is that what makes Profitunity potentially profitable is the adding on signals and pyramiding a position. As you've learned first hand, it's not hard to get fantastic returns. Just be sure to make sure that you're taking in to account the risk of having a lot of open positions if price goes against you in a big way. Hence why I make sure to stop adding on once I've reached 3-5% risk out there. I'd rather leave some potential money on the table than take huge losses because I've added on too much. Same applies for diversifying across multiple markets.
  • #1,231
  • Aug 26, 2011 3:45am Aug 26, 2011 3:45am
Thanks for the suggestions, I'll apply that
  • #1,232
  • Aug 26, 2011 4:29am Aug 26, 2011 4:29am
This is a very chaotic system, I don't trust in it. One year ago, I partecipate to a project that uses a powerful mathematical system written in Matlab by a Greece Professor.
It's system had to solve tens of differential equations in matlab, passing then the result to an expert advisor written in mql. It can predict the direction of the market with a probability of 80%. After 2 months of proofs we abbandoned the project because the system failed. Caotic and random systems, in my experience are very unstable and the trading is unpredictable.
The math around them is partial and too far from the statistical science.

But it is only my opinion.

MJ
  • #1,233
  • Aug 26, 2011 6:23am Aug 26, 2011 6:23am
Quoting MaryJ
This is a very chaotic system, I don't trust in it. One year ago, I partecipate to a project that uses a powerful mathematical system written in Matlab by a Greece Professor.
It's system had to solve tens of differential equations in matlab, passing then the result to an expert advisor written in mql. It can predict the direction of the market with a probability of 80%. After 2 months of proofs we abbandoned the project because the system failed. Caotic and random systems, in my experience are very unstable and the trading is unpredictable.
The...
What was the mathematics the system used? It can be very complicated maths, but it may not apply to chaotic systems. Since it had to resolve differential equations, I got a feeling that the assumptions of that trading system are flawed.

I believe it's possible to trade using mathematics. Chaos theory applications are vast, and it applies to systems as complex as financial markets. I've also seen other mathematics applications to financial markets, in the domain of signal processing and time-series analysis. There's a thread about it on FF.

Don't take those conclusions so fast, because that system obviously didn't apply mathematics as it should.
  • #1,234
  • Aug 26, 2011 8:36am Aug 26, 2011 8:36am
According to my knowledge and insights "CHAOS" as defined by BW is just his definition of chaos, but not identical to any other understanding of chaos in mainstream (or even Popular) science. Its just clever hype of an ordinary (but good) trendfollowing system. Just a couple of ma, macd and smoothings. No complicated math! Plainly pure, simple and elegant. But MM included!

The systems is though to use REVERSE pyramiding: In Chaos2 for example you start the most risky signal with the smallest stake ( DB = 1 microlot), your next signal would be superAO ( SAO=5 microlots), followed by XAO or fractals... BUT the the first signal AFTER SAO would be 4 microlots, the next one 3 microlots, followed by 2, 1 and sticking to 1. After each retracement (thats all a fractal is) you now add 1 microlot til you`ve run out of investable cash. You would not add after too many candles without retracemts (In the Zone).

Thats my understanding of position building according to BW.

Decreasing, adjusting and closing this position is a different story.

Regards

Forex37
  • #1,235
  • Edited 12:04pm Aug 26, 2011 11:29am | Edited 12:04pm
Quoting Forex37
According to my knowledge and insights "CHAOS" as defined by BW is just his definition of chaos, but not identical to any other understanding of chaos in mainstream (or even Popular) science. Its just clever hype of an ordinary (but good) trendfollowing system. Just a couple of ma, macd and smoothings. No complicated math! Plainly pure, simple and elegant. But MM included! Forex37
Hype is the right word. The system may be good and may work, but calling it an application of Chaos theory is a real stretch. Although BW talks about the fractal nature of the market, he does not use the mathematics of chaos. He calls a particular price pattern a "fractal", but that is just a name, and a distortion of what fractal stands for. It is a real mistake to think that you are actually using the fractal nature of the market.

In the first few chapters of his book, BW says that you cannot predict the market, that all indicators tell about the past not the future, that statistics of the past tell nothing of the future, and that past patterns have no predictive value. Then he proceeds to develop an argument for a system that violates every one of these principals. Hype, pure and simple.

That said, the Profitunity (another clever marketing tool) system seems to be profitable for many users, and I will probably spend many fruitless hours developing an EA to test that hypothesis.
edit: No I don't have to develop an EA. ForexFlash has posted several places to look
http://codebase.mql4.com/4488
http://codebase.mql4.com/3245
http://codebase.mql4.com/3239
In addition, the EA in the first above has been tested. Look here
http://www.tradingsystemforex.com/ex...ms-trader.html
Looks promising, but it has been optimized for the testing period. What will it do today?
  • #1,236
  • Aug 26, 2011 11:58am Aug 26, 2011 11:58am
Quoting MadCow

That said, the Profitunity (another clever marketing tool) system seems to be profitable for many users, and I will probably spend many fruitless hours developing an EA to test that hypothesis.
Why not look at an offspring of Profitunity (replacing Alligator with plain -nonshifted- MAs) including a signal and email EA - unfortunately not a trading ea: http://www.forexfactory.com/showthread.php?t=37439

The author is still trading it on H4 with continuing success.

Regards

Forex37
  • #1,237
  • Aug 26, 2011 3:25pm Aug 26, 2011 3:25pm
Quoting MadCow
Hype is the right word. The system may be good and may work, but calling it an application of Chaos theory is a real stretch. Although BW talks about the fractal nature of the market, he does not use the mathematics of chaos. He calls a particular price pattern a "fractal", but that is just a name, and a distortion of what fractal stands for. It is a real mistake to think that you are actually using the fractal nature of the market.

In the first few chapters of his book, BW says that you cannot predict the market, that all indicators tell about...
Those EAs aren't complete. The first one just buys on fractals, that's just 1/5 of what the system is.

And about the system, mathematicians and physicists had to use a supercomputer to do "6 million iterations". If they weren't applying chaos theory, I don't know what those calculations were that they had to use a supercomputer to do them.
  • #1,238
  • Aug 26, 2011 4:40pm Aug 26, 2011 4:40pm
Quoting Jasus

..mathematicians and physicists had to use a supercomputer to do "6 million iterations". If they weren't applying chaos theory, I don't know what those calculations were that they had to use a supercomputer to do them.
I guess everyone of those mathematicians and physicists in those old days (almost a quarter of a century ago) would have loved to exchange one or even two of his supercomputers for one of nowadays lowest priced PCs.

Regards
  • #1,239
  • Edited 3:50pm Aug 27, 2011 9:54am | Edited 3:50pm
Hy,tnks a lot for yours sharing it helps us Can u please tell us the general rule for your stop loss rules after signal trigered?because I read the books but don't find the rule.Please help me and other with this setap.tnks and i wish you many profitable trades
  • #1,240
  • Aug 27, 2011 11:39am Aug 27, 2011 11:39am
I read new dimension book and I havn't seen their such signal?chek this ?and hope that u will come with explanation for us
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