Skip to main content

Trading Chaos

Hello! Ok I'm just gonna write some random thoughts here. So please dont judge me.

Basically I try to emulate Bill Williams Profitunity Trading System. This I believe is Trading Chaos. Chaos is not "chaos" its highly organised. Chaos is a higher form of organisation. Its not just random movements. It follows a proper structure.
(I can brag about all this because none of it is mine)
I believe the market has a structure - That structure is Elliott Wave
I believe that every structure always has a structure as well. That structure is Fractal/AIMS.
I believe every trend starts with an AIMS level and Finish at an AIMS level.

anyway, a little about the system.
We use only 3 Indicators.
1. AIMS AO (Awesome Oscillator). I have modified the four colour MACD into an Awesome Oscillator. MACD is based on EMA's where as AO is based on SMA's.

2. AIMS Levels (Fractals) Bill Williams Fractal indicator shows arrows where as AIMS displays the space between upper and lower fractals i.e. AIMS Levels.

3. Alligator - Based on Fractal Geometry Bill Williams arrived at this indicator after billions of iteration using a Super Computer.

Answer to Jim's Question.
Jim, the three lines are Bill Williams Alligator. Its based on 5,8 and 13 Smooth moving averages shifted into future/forward 3,5,8 bars respectively. The idea is to trade only when price creates narrow/shallow aims level and alligator is sleeping. Bill Williams calls this sleeping alligator with its mouth shut. He calls Green=lip Red=teeth blue =jaw. when the lines are inter twined AO close to ZL is what he calls the saddle point/ Zero Balance point, as if u have a rock at the top/peak of a mountain. slight leverage to either side will cause massive momentum. He calls blue line as that balance line at the top of the mountain. Which ever side price goes it falls down. blue is the top of the mountain. Everything is Energy and energy follows the path of least resistance. path of lease resistance is away from alligator. Price going away from alligator means price going away from balance line , it means price rolling down a mountain, following the path of least resistance. when AO peaks that means the rock hit the bottom or a hurdle and now it has to travel up the mountain, which is obviously going to require more energy consumption as compared to going down, and when it builds that kinetic energy it may drop again following the path of least resistance.

For further information you can see the following
There is a good thread on Forex Factor about Trading Chaos Click Here

I found this explaination of Bill Williams Trading Philosophy  very easy to understand and brief.Its by Alpari.
Here is the Link

If you'd like to read the books I can send them to you. I have electronic copy of First book. But really Its money woth spending. Buy all three and read one by one. Let it take you 3 months to finish all three.

Popular posts from this blog

Count Elliott Wave within 10 Seconds

After Reading this material you should be able to do the following:
Objective 1. Understand Elliott WaveObjective 2. Count Elliott Wave within 10 SecObjective 3. Learn how to use AO
Objective 1

What is Elliott Wave? 

We believe the market has a structure. That structure is Elliott Wave. We also believe that the structure also has a structure and that structure is shown to us on our charts by using our indicator AIMS Levels. EW consists of impulse waves and corrective waves. We are interested in trading the impulse waves and avoid the corrective waves.

Which wave is most profitable and easy to trade?   

Wave 3 is where we make money. Our strategy puts us right into the impulse waves, where the money is made.

Hypothetically, this is how Elliott Wave looks like.

Within each Impulse wave there are 5 waves.  of which wave 1,3,5,  are again impulse waves whereas wave 2 and 4 are corrective waves.

An impulse wave consists of sequence of 5 waves starting from 1 up 2 down 3 up and 4 down an…

Count Elliott Wave in 10 Sec

Example of Setup 1 and Setup 2. In the Chart below the blue arrow that point to the Red Dot is the spot which we Call Setup 1. The next AIMS/Fractal Level immediately after it broke down is what we call Setup 2. At the Red Dot alligator was sleeping. While at the second break Alligator mouth was open to the downside. 
Updated 11:00 BST

How to Trade Wave 3 Make HUGE PROFITS

The most important thing I learned few years ago was that the market was a wave. Well not the market, but the charts that we look at. It always moves in waves. Someone actually named them after themselves but we don't really need that lovely name (Elliott Wave). Because we don't need to complicate things.

When I talk about waves, I don't mean the popular Elliott Wave. I mean the WAVE we have on the most beautiful indicator called, ahem it has many names, AO, The Awesome Oscillator, The eWave, AIMS Wave etc.  It helps us see the market in a smooth wave going above and below a certain Zero Line. .. It helps you ignore the going up and going down of the price concept. For us technical traders, we don't have an up and down as such specially in forex. All we see is eWave turning Red or Green.

Assuming you already know a bit about the wave. I know most of you will want to know the answer this fantastic question. How to trade the third wave?

They all ask that question, and s…