Financial Information and Analysis

TRADE TACTICS Bill Williams, stock chaos

2009-11-29T22:04:00.001+01:00

Bill Williams developed a precise business tactics based on the "chaos theory", which aims to overcome subjectivism in investment decisions, which in turn creates psychological tension due to the expectations of market development.
In their everyday business practice retailers are confronted with the following psychological problems:
A) Is it possible to get both pleasure and profit?
B) How to preserve domestic harmony, and his own relatives, is at constant promenyashtana market situation?
C) How to overcome the constant nervous tension?
D) Why do most traders lose money consistently?
D) Why do all analysts praise for his achievements, but when the dealer starts to deal effectively on their recommendations, he loses money?

The main reason the author is that most traders focus on the results of trade and not on actual sales process. Them away from reality and is the main reason for the negative results. Desiring to achieve specific, predetermined goals, they seek to plan and shape the future, causing psychological depletion. Practically demonstrated that won those relating to trade calmly and not battle of life and death with the market, which has to win at any cost. Keeping the battle with any natural element, including the market is doomed cause. Profits are not the result of confrontation with the market, a consequence of the achieved harmony with it.
"The road is smooth and not themselves put obstacles - Buddhist thought. In the term "obstacle" to include personal beliefs and emotional inhibitions. Since the majority of retailers are convinced that trade is not just something easy and profitable business, they create their own limitations, which are transformed into psychological barriers in the way of success.Ultimately, the trader does not trade in the market, but with their own convictions.

        Personal belief understanding of truth

        Trading is underdog Loss

        Trade is profitable Profit

This fact requires each trader to determine what is his personal belief on the market. This will be crucial to its end.
The main reason that most of the traders who have made developments in other areas to suffer, the foreign exchange market failures in the mechanical transmission of their behavioral patterns from one area to another. In a routine business environment with established rules and methods of planning and tselepolaganeto tselepostiganeto is most often applied to model behavior. In terms of market planning for a future turn of events and related outcomes is a losing cause. The reason is that in attempting to plan the course of events we are based on subjective judgments - "The market forms a peak," The market is svrahkupen "," The rise is the result of closing of short positions. Subjective assessments lead to erroneous conclusions and hence losses.Overcoming subjectivism in the market analysis required to use reasonable estimates whose characteristics are:
- Factual;
- Verifiable;
- Mixed.
While traditional human activities is decided based on previous experience in a dynamic market environment, decisions must be based on actual and reasonable valuations. The motto of this type of behavior is:
"The market is where, because he is due to be there precisely because it is where is,"
Therefore, the winning trading style requires achieving harmony with the market movements through the elimination of personal goals and using reasonable estimates of the market.
The pursuit of individual goals formulated strictly leads to inflexibility. The removal of these goals is provided to harmonize with the market, which is known. "Intrusion into the flow" as budiskata philosophy.
Formulation and pursuit of specific objectives is the result of a desire for control over the market.This desire to provoke a specific player's expectations for development of market movements.When these expectations are not confirmed, it causes anxiety, distortion of the evaluation and subjectivity, resulting in a loss. Position that the market is neutral causes us peace, which creates a basis for real and justified and therefore estimates for profitable deals.
The necessity of such an approach is supported by the conclusions drawn in "Chaos Theory".The main findings in this theory are:
1) Everything in life follows the path of least resistance.
2) The path of least resistance depends on the structure, which reflects our belief. Changing the structure, respectively, of our beliefs alter the flow characteristics.
3) diversion from the path of least resistance causes tension in the body and brain. This means that if you feel any tension Trading, this is a sure sign that they are not in harmony with the market and violate the principle of least resistance, which is a precondition for subjectivity.
From everything said so far is that every trader should know his own nature, ie system of desires, present and assumptions, which change is a factor for success.
Widespread opinion is that 90% of success in marketing depends on the individual mental abilities. Indeed, success depends not so much by the potential of mental abilities rather than belief sets. If there is an emotional imbalance in combination with negativism, even 100% of the brain resource mobilization will not lead to a successful outcome. The combination of proper structure and mental concentration is known. "Entry in the form, which is the basis for successful trading.
The advantages of this condition are that the person is not experiencing anxiety, fear and doubt and is characterized by:
- Confidence;
- Pleasure;
- Concentrated relaxation.
At the same time, the suspension of duties and poor results are sure signs out of shape.
The main reason for the lack of focus on form is mechanical memorizing applied from the earliest school age, causing svrahrazvitie the left cerebral hemisphere. This orientation to the result of individual action on behalf of the process. The left hemisphere operates at a speed of 16 bits per second and its purpose is to convey the technology to implement a process of central nervous system that operates at 15 million bits per second. Central nervous system is entrusted with the implementation process. Therefore, if left polukalbo knows what needs to be done, central nervous system knows how. Therefore, novices make drivers slow and sluggish response to dynamic traffic environments. At this point the transfer of technology from the left hemisphere in the central nervous system. When the process is complete tasks and automate complex processes are carried out mechanically, without tension. Therefore, it is first necessary to extend the system of beliefs in order to fulfill the requirements of the law of least resistance and then to achieve harmony with the market by concentrating on process rather than the outcome of trade. On this basis, achieve the peace that allows for objective assessments and market harmonization with market processes.
Market processes are caused by drivers who are called Attractor. According to chaos theory, "there are the following types:
- Point Attractor;
- Cyclic Attractor;
- Toras Attractor;
- Strange Attractor.
Attractor point occurs where the ground for an action is the result of forces of attraction and repulsion (eg like-objection, warm-cold, hunger-sate).

Attractor cyclicality occurs when there is expected to move into a market range (range). In nature, these are processes associated with the change of night to day and seasons.

Attractor toras impression of interdependence between phenomena. The increase in interest attracted investors, leading to a decline in the yield of bonds and a decline in interest in purchases of government securities.

Strange Attractor is the driving force that affects the greatest degree of human behavior. The most significant characteristic is its sensitivity to change of initial conditions, ie small changes in initial conditions lead to large end effect.
Conclusion: If our expectations of market movements are the result of some of the first three Attractor (expected to move in the Range, in the cycle of cause sledstvenost) our behavior is manipulated and our trade is a loser. It became profitable when I watch the market movements as affected by the strange Attractor, ie as a consequence of changes in initial conditions.Factors to take into account the change in initial conditions are:
- Drive the market;
- Change the speed of the driving force;
- Fractal;
- Area;
- The line of balance

Next buy signal for DJIA

2009-11-26T11:26:00.002+01:00

Buy signal

2009-11-16T19:38:00.002+01:00

The next target of DJIA

2009-11-12T20:56:00.000+01:00

The next buy signal at 10339

Wall Street Faces ‘Live Ammo’ as Congress Aims to Unravel Banks

2009-11-12T10:07:00.001+01:00

Nov. 12 (Bloomberg) -- Seven Wall Street lobbyists trooped to Capitol Hill on Nov. 9, hoping to convince Representative Paul Kanjorski’s staff that his plan to dismantle large financial firms was a bad idea.

They walked out with a sobering conclusion, according to the accounts of two attendees who requested anonymity because the meeting was private. Not only was Kanjorski serious, he planned to offer the legislation as early as next week -- and it just might pass.

Today marks a decade to the day that President Bill Clinton signed the repeal of the Depression-era Glass-Steagall Act that split investment-banking from lending and deposit-taking. The repeal allowed the creation of Citigroup Inc., the financial colossus now propped up by $45 billion in taxpayer rescue funds. Financial firms are scrambling to prevent Congress from re- imposing the act.

“We’re playing with live ammo,” said Sam Geduldig, a lobbyist at Clark Lytle & Geduldig who represents financial- services firms and wasn’t at the Nov. 9 meeting. “The banking community is rightfully concerned.”

The Financial Services Forum, which represents chief executive officers of 18 of the largest financial firms and whose lobbyists organized the visit to Kanjorski’s office, has scheduled or met about a dozen lawmakers or aides with the House Financial Services Committee in the last week. The U.S. needs big financial firms to compete globally, said Rob Nichols, the group’s president.(Read more...)

Dow Industrials Reach 2009 High

2009-11-10T15:22:00.000+01:00

The Dow Jones Industrial Average leapt to a new 13-month high Monday as investors grew more optimistic about the continued flow of easy money to support economic recovery. The Dow climbed 203.52 points, or 2%, to end at 10226.94 -- its highest finish since Oct. 3, 2008 and the second 200-point gain in three trading days. The blue-chip measure has risen 4.7% over the four-day winning streak that began with the Federal Reserve's policy statement last Wednesday, which quelled fears that the central bank might raise rates soon. Gold rose to a new record, oil futures snapped two days of losses and the dollar fell.

Fractal generate buy signal for Dow Jones

2009-11-06T16:54:00.000+01:00

Unemployment in U.S. Jumps to 10.2%, Payrolls Fall

2009-11-06T16:41:00.000+01:00

Nov. 6 (Bloomberg) -- The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero.
Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The jobless rate gained from 9.8 percent in September and exceeded 10 percent for the first time since 1983.

Stock futures slid and Treasury notes gained on concern the emerging economic recovery will cool as American consumers retrench. Fed policy makers this week said the economy will probably “remain weak for a time” and reiterated a pledge to keep borrowing costs low for an “extended period.”
“We will certainly have very bad payroll numbers in November and December,” said Harm Bandholz, an economist at UniCredit Global Research in New York who accurately forecast the size of the drop in payrolls. “We don’t foresee businesses going on a hiring spree anytime soon.”
The Standard & Poor’s 500 Stock Index fell 0.4 percent to 1,062.08 at 9:35 a.m. in New York. Treasuries rose, pushing the yield on the 10-year note down to 3.5 percent from 3.53 percent yesterday.
Revisions added 91,000 to payroll figures previously reported for September and August.(Read more ...)

Bill Williams and his stock market chaos theory

2009-11-02T20:34:00.001+01:00

Bill Williams and his stock market chaos theory

Bill Williams developed unique trading concepts by combining trading psychology with the Chaos Theory and its particular effect on the markets. He suggested that rewards from trading and investing are determined by human psychology and that anyone can become a profitable trader/investor if they uncover hidden determinism in seemingly random market events.

Bill Williams says that fundamental or technical analysis can not guarantee steady profitable results because they do not see the real market. Moreover, Bill Williams says that traders lose because they rely on different types of analysis, which are useless in nonlinear dynamic models, i.e. the real markets.

Trading is a psychological game, the way of self-realization and self-knowledge, so the best way to become successful is to find your trading self, to get to know it better and to follow it no matter what. Thus, there are two significant aspects: self-knowledge and understanding of the market structure.

It is Bill Williams’ view that making money can be easy if you understand the market structure. In order to do this you should be aware of the market’s inherent parts called dimensions, each of which adds to the total picture.

These market dimensions are:
Fractal (phase space)
Momentum (phase energy) - Awesome Oscillator
Acceleration / Deceleration (phase force)
Zone (phase energy / force combination)
Balance Line (strange attractors)

It is worth mentioning that before the first dimension (fractals) generates a signal, all signals generated by other dimensions should be ignored. Once the position is open in the direction of the first fractal signal, the trader “adds-on” to this position every time a signal from other dimensions is generated. As a result, a 30% market movement gives the opportunity to make a profit of 90-120%.
Bill Williams’ method to exit the market is very sensitive to price movements, so it helps to fix profit within the last 10% of the trend, capturing not less than 80% of the movement. Bill Williams’ theory has become very popular among Forex traders.

Buy stocks when fractal generate signal at DJIA 9964.

U.S. Stock Futures Gain Before Manufacturing Data; Ford Rises

2009-11-02T15:36:00.000+01:00

By Alexis Xydias and Sapna Maheshwari

Nov. 2 (Bloomberg) -- U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may rebound from its biggest weekly drop since May, as Ford Motor Co. reported earnings that beat estimates and investors speculated that a report will show manufacturing expanded at the fastest rate in three years.

Ford rallied 8.6 percent in pre-market New York trading. Alcoa Inc., General Electric Co. and Procter & Gamble Co. gained. CIT Group Inc. tumbled after the 101-year-old commercial lender filed for bankruptcy.
Futures on the S&P 500 expiring in December added 0.5 percent to 1,038.50 at 8:46 a.m. in New York. Dow Jones Industrial Average futures gained 0.4 percent to 9,706 and Nasdaq-100 Index futures increased 0.2 percent to 1,669.5.(Read more...)

U.S. Stocks Fall, Extend Weekly Drop, on Personal Spending Data

2009-10-30T15:15:00.002+01:00

By Rita Nazareth

Oct. 30 (Bloomberg) -- U.S. stocks fell, extending a second straight weekly drop for the Standard & Poor’s 500 Index, after consumer spending dropped for the first time in five months. The dollar and Treasuries gained, while commodities decreased.

American Express Co. and Home Depot Inc. declined after Commerce Department figures showed a 0.5 percent decrease in purchases last month. MetLife Inc. tumbled 4.7 percent after the biggest U.S. life insurer posted a third straight loss. The S&P 500 retreated after surging the most since July yesterday as the government said the economy returned to growth following the worst contraction in seven decades.(Read more...)

Bill Williams Alligator

2009-10-29T15:24:00.004+01:00

"Most of the time the market remains stationary. Only for some 15–30% of time the market generates trends, and traders who are not located in the exchange itself derive most of their profits from the trends. My Grandfather used to repeat: "Even a blind chicken will find its corns, if it is always fed at the same time". We call the trade on the trend "a blind chicken market". It took us years, but we have produced an indicator, that lets us always keep our powder dry until we reach the blind chicken market"
Bill Williams

Bill Williams describes the Alligator as being like a compass which keeps your trading in the right direction. The Alligator helps you spot a real trend and stay out of range-bound trading, which always result in losses. The Alligator is the combination of three balance lines

In principle, Alligator Technical Indicator is a combination of Balance Lines (Moving Averages) that use fractal geometry and nonlinear dynamics.
• The blue line (Alligator’s Jaw) is the Balance Line for the timeframe that was used to build the chart (13-period Smoothed Moving Average, moved into the future by 8 bars);

• The red line (Alligator’s Teeth) is the Balance Line for the value timeframe of one level lower (8-period Smoothed Moving Average, moved by 5 bars into the future);

• The green line (Alligator’s Lips) is the Balance Line for the value timeframe, one more level lower (5-period Smoothed Moving Average, moved by 3 bars into the future).

Lips, Teeth and Jaw of the Alligator show the interaction of different time periods. As clear trends can be seen only 15 to 30 per cent of the time, it is essential to follow them and refrain from working on markets that fluctuate only within certain price periods.
When the Jaw, the Teeth and the Lips are closed or intertwined, it means the Alligator is going to sleep or is asleep already. As it sleeps, it gets hungrier and hungrier — the longer it will sleep, the hungrier it will wake up. The first thing it does after it wakes up is to open its mouth and yawn. Then the smell of food comes to its nostrils: flesh of a bull or flesh of a bear, and the Alligator starts to hunt it. Having eaten enough to feel quite full, the Alligator starts to lose the interest to the food/price (Balance Lines join together) — this is the time to fix the profit.

Buy when DJIA rich and cros red line

2009-10-28T18:40:00.009+01:00

Technical Indicator Bill Williams Aligator and Fractals

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2009-10-28T12:09:00.002+01:00

Don't expect a Great Recovery

Economists are forecasting that GDP grew at a 3.2% clip in the third quarter. That sounds impressive -- but it may not be a sign that a robust rebound is underway.

By Chris Isidore, CNNMoney.com senior writer

October 28, 2009: 3:50 AM ET

NEW YORK (CNNMoney.com) -- The economy may get a good report card Thursday for the first time in a long time.Economists are forecasting that the gross domestic product, the broadest measure of the nation's economic activity, rose at an annual rate of 3.2% in the third quarter. If they're right, it will end a streak of four quarters of the most severe U.S. economic decline since the Great Depression.(Read more…)

2009-10-28T11:53:00.004+01:00

Financial and mining losses hit FTSE

By Neil Dennis

Published: October 28 2009 08:35 | Last updated: October 28 2009 10:02

Renewed selling hit London’s equity market on Wednesday after unexpectedly weak US consumer confidence left Wall Street flat overnight, and was followed by broad losses across the Asia-Pacific region.(Read more ...)

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2009-10-28T11:43:00.001+01:00

European, Asian Stocks Retreat; SAP, Canon, ArcelorMittal Fall

By Sarah Jones

Oct. 28 (Bloomberg) -- European and Asian shares declined, sending the MSCI World Index lower for a seventh straight day, as SAP AG cut its software sales forecast and Canon Inc. posted a quarterly profit drop.(Read more...)

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