“Trading chaos”: B. Williams’s contribution and the reasons why millions of traders all over the world lose their deposits when they work according to the techniques of this author.
The book “Trading Chaos” by B. Williams is the classical edition that deals with giving the technical analysis to Forex. It is of a great interest not only to me but also to millions of B. Williams’s admirers all over the world. From the viewpoint of mine as a trader, this book is so popular because B. Williams tried to do the following:
1. To present Forex chaotic market as a system, making use of the chaos theory.
2. To depict his vision of logic of the structural components motion in this chaos: a) the strategy (Elliot’s wave theory); b) the tactics (the fractal analysis; the use of fractals and the so-called “key factor” – i.e., financial and economic instruments.
3. To submit 5 levels of the professional training of every trader. Each of these levels is clearly described and specified – as well as the corresponding goals and the instruments that traders must be capable of using at each of these levels.
In particular, the following chapters of the book in question are dedicated to the problems enumerated below:
Chapter 6. The first level – a trader- novice.
Chapter 7. The second level – an advanced beginner.
Chapter 9. The third level – a competent trader.
Chapter 11. The fourth level – a skilful (trading) trader.
Chapter 12. The fifth level – a trader -expert.
4. Besides, B. Williams enumerates 5 “bullets” that can “kill” any trend -i.e., its reversal points (points of reference). Starting from such points, one can develop new strategy and tactics of the work within the trend.
5. B. Williams also recommends making a business plan. In this “control list”, one must clearly specify “the working rhythm”, the signals from “the big finger” concerning the deal opening, “stop-loss” levels, cushion pads (suspension pillows), etc.
6. As a professional psychotherapist and trader, B. Williams submits practical recommendations to the beginners and skillful (competent) traders – see Chapters 11 and 12 from “Trading Chaos». The essence of his attitude to traders’ principal psychological problems can be approximately formulated as the following. We learn how to integrate into the market basic structure and establish contacts with the market via realizing our own prejudices and by the development of our individual trading programs. You should compare this approach with other psychoanalysts’ viewpoints. Such “specialists” try to make money at Forex market rather incompetently (see Chapter 23, dedicated to traders’ psychological problems that arise during the work at Forex and methods of their “healing”).
7. As the logical continuation of “Trading Chaos”, B. Williams has written another book – see “New Dimensions in Exchange Trading”. In this book, the author presents his business approach – i.e., Profitunity “via the web”.
· He has introduced the indicators (AO, AC and Alligator). Now they are regarded as the obligatory) components of the majority of Forex trading systems.
· He tried to “specify (detect) all market signals” and open deals at the moment when such signals coincide simultaneously, which must be confirmed by different indicators.
I would like to keep on complimenting B. Williams for his accomplishments and contribution to Forex theory but for “one snag to it”. Several years ago I started to reflect on certain aspects of B. William’s theory. That is, as a rule, 95-97% of traders had lost at Forex before the edition of “Trade Chaos 1, -2” and “New dimensions”. At the same time, notwithstanding all achievements and discoveries by B. Williams, the number of traders -losers still remains the same even after the editing of these books.
This circumstance forced me to scrutinize many of B. William’s news Ukraine positions more impartially and in detail. I have cardinally reconsidered my views on the trading at Forex.
As I see it, one must clearly distinguish domains where techniques by B. William’s and other authors are applicable and where they do not work but only accelerate the process of losing money by a trader. Only after having learned how to detect this boundary one can develop one’s own trading system that will bring profits at Forex.
Further, I try to submit my views on Forex market. Starting from the theory, I make a transition to its practical application. In this way one can better understand logic of the currency pair movement at Forex market. Consequently, this approach helps us to trace out a general pattern of opening and closing of transactions at Forex.