Trading Chaos: Applying Expert Techniques to Maximize Your Profits Hardcover – Jun 30 1995
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From the Publisher
A practical guide for making sense of chaos theory and applying it to today's financial markets. Enables traders and analysts to uncover hidden determinism in seemingly random market events and make accurate investment decisions with high probabilities for profit. Supplies practical, real-world tools for applying chaos to global commodity, futures and options markets. Its unique organizational format introduces readers to the financial applications of chaos in five graduated stages, beginning with a clear nontechnical introduction all the way to chart analysis, fractals, Elliott Wave and advanced nonlinear dynamics.
From the Back Cover
TRADING CHAOS APPLYING EXPERT TECHNIQUES TO MAXIMIZE YOUR PROFITS
Chaos theory now stands at the cutting edge of financial decision-making methods. The product of years of scientific investigation into unpredictable phenomena, it has the potential to offer traders entirely new perspectives on the movements of markets—and less risky routes to greater, more consistent profitability. Unlike other books on the subject, Trading Chaos takes chaos analysis out of the realm of the abstract and makes complex concepts easy to understand and use. It offers you the most practical, comprehensive guide available to applying chaos theory to the real world of trading and investing.
In this breakthrough work, author Bill Williams gives you the benefit of his unique qualifications: 35 years of successful trading and a PhD in psychology. The instructional techniques used in Trading Chaos have been tested and refined in the workshops, seminars, and private tutoring sessions Dr. Williams has conducted in 12 different countries.
Designed for all traders—from beginner to experienced professional—Trading Chaos introduces you to the financial applications of chaos in five graduated stages, starting with a clear, nontechnical introduction (Level One: The Novice Trader) all the way to chart analysis, fractals, Elliott wave, and advanced nonlinear dynamics (Level Five: The Expert Trader).
Trading Chaos probes depths of human and economic behavior that other books do not even mention, including:
- A detailed examination of the underlying structure of the market
- How individual belief systems affect the way we trade
- How to determine "what the market wants"
- Most importantly—"how to want what the market wants"
Numerous charts, trading models, analysis spreadsheets, and review questions reinforce the key concepts and help insure full comprehension of the material.
Regardless of your current degree of expertise, Trading Chaos will take you to new levels of trading confidence and increased profit.
This practical guide to the powerful tools of chaos theory will help you make better, more profitable trades
"Bill Williams brings a unique background and experience to the commodity trading world. His approach to becoming a successful trader includes many fresh and fascinating concepts for traders of all experience levels."—Bruce Babcock Editor, Commodity Traders Consumer Report
"Bill Williams has demystified the Elliott Wave. His technical approach is an innovative and effective way to trade markets for novice and expert traders alike."—Bob Koppel Skylane Trading Group
"Trading Chaos by Bill Williams is an excellent guide to profiting from a market which is nonlinear in structure. The book is divided into logical levels of trading techniques useful to the novice and expert trader. I was genuinely surprised that the expert can still learn refreshingly new techniques at each level presented."—Timothy C. Slater Managing Director of Dow Jones Telerate Seminars
Trading Chaos takes chaos theory out of the abstract realm and into the real world of practical investment decision-making. Using the techniques in this remarkable book, you will uncover the hidden patterns of what appear to be the random, unpredictable movements of the commodity, futures, and options markets. Regardless of your current level of experience, expert commodity trader and trainer Bill Williams will give you the skills and insights to move to levels of trading ability you would not have imagined possible.
Clear, practical, and nontechnical—Unlike other books on chaos theory, Trading Chaos is designed to be easy to understand and use
Unique organizational format—Introduces the reader to the financial applications of chaos in five graduated stages, from Novice to Expert Trader
Expert advice on avoiding common psychological traps and pitfalls—Including such self-limiting afflictions as the "paralysis of analysis," "opinionitis," and the dangers of trading on individual belief systems
A wealth of supplementary materials—Charts, trading models, trade plans, analysis spreadsheets, and trading diaries illustrate and reinforce key conceptsSee all Product Description
Top Customer Reviews
The author spent tremendous amount of time explaining why the technical indicators used nowadays are useless. He also quoted a very good example classifying the errors that typical traders usually commit : the swinging bell theory -- We cut losses and later found our original prediction being correct. Then we try to "solve the problem" by allowing a larger cut-loss. However, next time when we make a large loss by using the larger cut-loss, we again try to "solve the problem" by reducing the allowed cut-loss again. This pattern is recurring and just like a swinging bell. The writer did a very good job explaining the drawbacks of technical indicators nowadays and why traders lose.
After reading the first half of the book, I was almost persuaded not to use any technical indicators with linear parameters again. Yet, disappointingly, the author goes on to advertise his first and ever introduced indicator: Market Facilitation Index (MFI), together with other LINEAR-PARAMETIZED indicators. He claimed that the first stage of trading should use these indicators and should target at break-even. Since it is highly recommended by the author and is claimed to be able to win consistently, I have spent 8 hours programming his trading system in my computer, and tested with 2 years Hong Kong Hang Seng Index Futures trading data. Guess the results? The max. gain approximates the max. loss! Well, at least it proves that writer is right -- the target of this stage is break-even ONLY! Yet it makes no difference between other technical indicators. This is a disappointing section of the book.Read more ›
If you want a thorough review of fractal/chaos theory, I really recommend Edgar Peters' books or Trippi's book.
Now, with that said, the author presents an interesting trading system based on BEHAVIORAL aspects of the market. The author relates the lessons of trading that every beginning trader should know. From a BEHAVIORAL finance standpoint, the book is great and I would recommend it. On the other hand, does the reader want to be an investor or a trader? If you're not on the floor, don't try to be a trader. Trust me.
My one-star rating is based on the book's treatment of fractal/chaos theory in the financial markets. It doesn't.
However, as he penetrates the mysteries of the Elliott Wave and offers his technical indicators for it, he faces the problem of explaining things with terms that aren't (and can't conveniently be) introduced till later in the chapter: to understand Wave 1, you need to know about Wave 5 and fractals (because of the chaotic nature of the Elliott Wave), but Wave 5 isn't discussed in detail until waves 2 to 4 are covered, and fractals are covered in the following chapter. His definition for a "fractal stop" took me a long time to figure out--in fact, the chapter on fractal! s was the weak link in the chain: hard for me to grasp, and written in an almost point-form style. Nonetheless, I'm not too bright, so I imagine others will apprehend it faster than I did. But, if you can get through those middle chapters, the closing chapters are an easy read. Ultimately, Williams boils the psychology of the Elliott Wave down to a set of rather simple, purely technical indicators, which, according to Williams, will permit you to analyse any market within 10 seconds of viewing the chart.
Despite Williams's claims that his indicators work well for all time frames (he does suggest it is a bit cumbersome for intraday trading), it seems to me that you'd want a data service and charting software to at least look at intraday data to make the right calls.Read more ›
In order to understand his second(The New Trading Dimensions) book more clearly though, I believe you should read this one to grasp his overall objective. It also set a firm way to measure elliot waves in a totally objective manner.
As other reviewers stated, it is not real strong on chaos theory, which the title is misleading. If your purchasing this book for scientific reasons, then don't buy it. But if your objective is learning how to make money, then do yourself a favor and get it.
Although his method here(which is different than the 2nd book)is based more on the general overview of the markets, it is a good
starting point to learn his methodology, even though you may have to read 2 or 3 times(like I did).
Most recent customer reviews
Great book. Not only technical aspects has to be considered in Trading and "Trading Chaos" talk about the Psychology of the Trader and how to engage in changing it. Read morePublished on Sept. 22 2011 by Jean-GUIllaume
The five stars is only for the cover. However, the content of the book is pathetic. I have read many trading books and several chaos books and I can honestly say this book is... Read morePublished on Oct. 20 2003
This book really is mistitled. Chaos theory for markets is not presented, so look elsewhere for that. Read morePublished on June 26 2003 by W. G. Tom
In the first few chapters, he sounds so attractive, after that, you will find the author using new technical analysis words to describe the breakthrough of the resistance/support... Read morePublished on March 25 2003 by Mr. H. W. Tang
Williams uses big words (fractals, chaos, quantum mechanics) to impress the reader, but says nothing meaningful.I found this book a waste of time and moneyPublished on March 10 2003 by Giandomenico Rende
As an avid student of Chaos Theory and Fractals, I found this book to be similar to his other one. Williams eludes to using fractals in his analysis but makes no reference to... Read morePublished on Sept. 25 2001 by Enic Hauffen
I was greatly disappointed with this book. One would think it is about chaos theory and its applications for the financial markets, but all it has on the subject is one page of... Read morePublished on Dec 13 2000 by Amazon Customer
There is nothing earth shattering here, but I got a lot out of the book. It will depend on the reader. Read morePublished on Sept. 7 2000
This book is a total waste of time. The author makes no attempt to explain chaos theory other than to say is is a new way to look at information. Read morePublished on Dec 11 1999
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