Trading Chaos By Bill Williams | Part 2
Updated
Hello, everyone!
Let's continue to study Trading Chaos by Bill Williams(BW). He divided 5 levels of proficiency from the beginner to the trader-expert. Candlesticks is the beginning of the beginner level but this knowledge is necessary for the successful trading.
Figure 1
You can see here the bar structure, the open, low, close and high of the bar. This is very easy:)
Figure 2
BW suggests to divide each bar by 3 equal parts to identify the information this bar can provide to us. Let's numerate each bar with two numbers. The first one - the number of the part of the bar where the open price located, the second one - where the bar has close price.
Figure 3
The bar (1 1) means that bears tried to continue downward movement, but bulls took control in the end of the timeframe. This bar means the 85% probability that the price will go up next from 1 to 5 bars on the same timeframe. Bar (3 3) means the absolutely opposite.
Figure 4
Bar (2 2) is indefinite bar. We cannot make decisions based on this type of bars.
Figure 5
Bars (3 1), (2 1) and (3 2) called upbars or climbers. (3 1) provides the most piece of information that the market is in the uptrend. (2 1) bar is less informative than (3 1) but we can also say that the bulls defeated the bears on this bar. (3 2) is the least informative bar.
Figure 6
Bars (1 3), (2 3), (1 2) are the downbars the logic is the same as for upbars.
Figure 7
The trend direction can be roughly estimated as the two bars relationship. If the middle of the bar is above than the high of the previous bar market is in uptrend, if below - in downtrend, if inside - there is no clear trend.
Next part will be more interesting, difficult and useful. Please give us a like and subscribe the blog to not miss it!
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions at the real market.
Let's continue to study Trading Chaos by Bill Williams(BW). He divided 5 levels of proficiency from the beginner to the trader-expert. Candlesticks is the beginning of the beginner level but this knowledge is necessary for the successful trading.
Figure 1
You can see here the bar structure, the open, low, close and high of the bar. This is very easy:)
Figure 2
BW suggests to divide each bar by 3 equal parts to identify the information this bar can provide to us. Let's numerate each bar with two numbers. The first one - the number of the part of the bar where the open price located, the second one - where the bar has close price.
Figure 3
The bar (1 1) means that bears tried to continue downward movement, but bulls took control in the end of the timeframe. This bar means the 85% probability that the price will go up next from 1 to 5 bars on the same timeframe. Bar (3 3) means the absolutely opposite.
Figure 4
Bar (2 2) is indefinite bar. We cannot make decisions based on this type of bars.
Figure 5
Bars (3 1), (2 1) and (3 2) called upbars or climbers. (3 1) provides the most piece of information that the market is in the uptrend. (2 1) bar is less informative than (3 1) but we can also say that the bulls defeated the bears on this bar. (3 2) is the least informative bar.
Figure 6
Bars (1 3), (2 3), (1 2) are the downbars the logic is the same as for upbars.
Figure 7
The trend direction can be roughly estimated as the two bars relationship. If the middle of the bar is above than the high of the previous bar market is in uptrend, if below - in downtrend, if inside - there is no clear trend.
Next part will be more interesting, difficult and useful. Please give us a like and subscribe the blog to not miss it!
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions at the real market.
Comment
We make copy trading fair with high-water mark protection, empower manual traders with our smart terminal, and easily convert TradingView alerts into CEX orders with easy-to-use bots
Learn more at
skyrexio.com
Learn more at
skyrexio.com
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.