HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

Bill Williams' Trading System


Bill Williams Trading System: How to use it effectively


Bill Williams is a world famous trader, developer of analytical indicators and creator of Profitunity strategy. In 1987, his first works on trading in the stock market were published. The author violently criticized the traditional methods of analyzing graphs. In his opinion, fundamental and technical analytics lack objectiveness. Williams was convinced that a complex of random factors had a key influence on the pricing of a financial instrument.

Later, Williams published a book "Trading Chaos", which was focused on the principles of fractal geometry. The author convincingly proved the existence of a variable pattern in the chaos of financial markets. The high popularity of this work can be explained by outstanding financial results of the author’s trade, rather than innovative methods of analyzing quotes. Indeed, during 2 years of trading in the stock market, Bill Williams managed to increase his capital from 10,000 to 200,000 USD. This result could not pass unnoticed by traders and many decided to introduce Williams' trading approach into their own practice. The author himself was encouraged to open his own trading school - Profitunity Trading Group, which today is headed by his daughter - Justine Williams. Tuition fee is 6000 USD. The training course for traders at Profitunity Trading Group is aimed exclusively at studying and disclosing the features of B. Williams's unique strategy.

Important! Indicators of B. Williams are included in the standard set of analytical tools of the MT4 platform and many traders have already managed to evaluate their "effectiveness" in practice. Enthusiasts have developed new strategies that have nothing to do with the "Profitunity" approach, so their effectiveness is not difficult to question. For example, no review of B. Williams' strategy mentions that there are 2 methods for using fractals, but for some reason attention is focused on the less effective one. Let's see what Bill Williams indicators really are, how the "Profitunity" strategy works and for what the "trading gurus" take from 1000 USD up?

Bill Williams Indicators and Traders' Mistakes


The original version of the Profitunity strategy uses 4 analytical tools developed by the author of the system:

Each indicator is integrated by default in MT4.


Attention! The first version of the strategy Profitunity was developed in the 80s of the last century. Since then, the principle of pricing of financial instruments has undergone significant changes. This was mainly influenced by a significant increase in the volatility of liquid assets. The main mistake of the authors of reviews and practicing traders is that the former superficially present the basic version of the vehicle, while the latter unsuccessfully try to use these recommendations in trading. Initially, the Profitunity strategy was developed for the stock market. Yes, Bill Williams himself said that his method would be effective regardless of the financial instrument chosen for trading, but a lot has changed.

To learn how to successfully use Williams indicators in your own trading, it is important to understand the main mistakes of traders.

Incorrect interpretation of trading signals


Unfortunately, there are so many radical errors in the descriptions of the principle of operation of the Bill Williams indicators that, to cover all, it will be necessary to consider each instrument separately:

Fractals. A peculiar pattern consisting of a minimum of 5 candles, the Hight or Low point of the average of which is higher / lower than the extreme.

The indicator is displayed on the graph in MT4 as arrows:

In fact, fractals display local minima and maxima for minor periods. The only practical application of the indicators, according to the descriptions on the network, is placing a pending Stop order at the fractal level. However, in accordance with the rules of technical analysis, it is possible to open an order in the direction of the trend when the price rebounds from the local level. This principle of trade is discussed in detail in the book “Trading Chaos” by B. Williams. This is the way to use this indicator.

Alligator


The instrument is based on 3 moving averages with periods of 13.8 and 5. When using the indicator in Forex trading, it is recommended to change the MA method in the settings to “Exponential”. This will make the formation of lines more sensitive to tick price changes. In developing this tool, the author was guided by the ideas of Sidus and Puria regarding the use of sliding in the analysis of financial markets. Not understanding this, novice traders blindly follow the recommendations presented in the network, according to which the order should be opened in the direction of the slips only if all lines are directed towards the current trend. The result is the following:

Horizontal lines marked points in turn in the market. You do not need to have significant experience in trading to understand the obvious thing: the signals are displayed after the movement has been worked out. Of the 3 signals presented in the screenshot, only one turned out to be profitable. That is why most traders use the alligator only as a trend indicator that serves as a filter of false signals. In fact, it is enough to make small changes in the interpretation of the signals of this instrument to make it an effective and key element in trading:

The true signal for opening an order is the intersection of a different line moving with a period of 5 with a period of 8. The points for opening trades are marked on the screenshot. As you can see, this significantly increases the efficiency of the indicator.

Awesome Oscillator.


The possibilities of an awesome oscillator are greatly exaggerated by both the developer and the traders. This tool actually has nothing to do with the Profitunity strategy and was developed as an independent indicator. Awesome Oscillator is effective in currency futures trading, if it is used to detect divergences:

The control signal for opening a position is the histogram crossing the zero line in the direction of a potential trend. It is worth saying that the Awesome Oscillator reveals divergences much more efficiently than the popular MACD.

Of all the considered indicators, the latter enjoys special popularity, since, based on statistical studies, enthusiastic traders were able to derive several types of trading signals for this instrument.

Crossing the zero line. In practice, this signal is not effective, because it is very late.

Formation of 3 histogram bars in a row of the same color, regardless of their location in relation to the zero level. To be convinced of the harmful consequences of the use of such tactics in practice, it is enough to pay attention to the oscillator signals during consolidation periods, which account for about 70% of the total trading time:

When trading with these recommendations, the loss of the deposit is a matter of time.

Pattern "Saucer"


This method of applying the "magic" oscillator is also not related to the method of Bill Williams and was developed by unknown traders. The pattern consists of 6 bars of the histogram, which together form a shape similar to a saucer. Of these, 3 bars are red, and the rest are green. The opening of the order supposedly should be in the direction of the last three columns:

The screenshot shows a segment of the chart on which 3 trading signals are formed. Of these, 2 turned out to be unprofitable. Such statistics do not justify the use of strategy in practice. These signals are really effective with a pronounced trend, which happens quite rarely.

As you can see, none of the popular methods of using the Awesome Oscillator lead to the expected result. This tool is advisable to use only when trading futures solely to identify divergences.

Wrong timeframe selection


Another common mistake of traders who tried to use Bill Williams indicators in trading is wrong timeframe selection. The key elements in the Profitunity strategy are fractals and the Alligator. These indicators can be called trend indicators, so their use for the analysis of graphs with periods M1-M30 is impractical. The fact is that on these timeframes market noise prevails, which prevents the correct operation of analytical tools. The optimal period for trading Williams indicators is H4.

How to use Williams trading strategy effectively


For trading, you will need to install the Fractals and Alligator indicators with standard input parameters on the chart. The finished template will look something like this:

To open a Buy order, you will need to wait for the following confirmations:

Green sliding crosses red from bottom to top.

The last fractal is pointing down.

To open an order Sell signals are mirrored. Stop Loss is set at the level of the last fractal. Placing a take profit is not necessary, but the value of this order can be fixed and make up to 70% of the average daily volatility of the asset selected for trading.

To understand the principle of trade and evaluate the effectiveness of the strategy, it is recommended to pay attention to a few examples:

On the presented graph, 5 signals for opening positions were formed. You should consider each of them in more detail:

The transaction is opened in accordance with the rules of trade. The vertical line is the entry point. Exit from the transaction is carried out after the formation of the opposite fractal. The result is a fixed profit of 240 points.

The upward local trend is still relevant, and the re-formation of a fractal in the relevant direction gives grounds for placing a trade order.

The situation is completely analogous to that considered in point 2.

Against the background of high liquidity, the Alligator displays a false signal to open a Buy order, but the last fractal is bearish, so refrain from trading.

As can be seen, the integrated use of the indicators Alligator and Fractals is more than effective. Fractals not only play the role of a good filter, but also display the most correct points for taking profits. Now it is recommended to pay attention to the signals of these indicators during periods of consolidation.

With lateral movement of the chart, a mass of false signals is displayed, the vast majority of which effectively filter fractals. As a result, only 3 convincing signals were formed, 2 of which closed with insignificant, and 3 with good financial results.

Attention! When trading with the Profitunity system, the risk for each order should not exceed 2-3% of the deposit. The optimal period is H4. The potential return is up to 20% per month, depending on the volatility of the currency pair. If it seems that this is not enough, then you should pay attention to the profitability of bank deposits or mutual funds.

Novice traders are advised not to trade more than 2 financial instruments.

Conclusion


Based on the information provided, we can conclude: Bill Williams indicators and Profitunity strategy are effective. By applying them in practice it is possible to achieve a stable profit. The main problem of most traders was the incorrect interpretation of trading signals.

Author: Kate Solano, Forex-Ratings.com

RELATED

Exploring the Efficacy of Forex Hedging Strategies

The world of forex trading is marked by its dynamic nature, offering substantial opportunities along with inherent risks. In an effort to mitigate these risks and protect their investments

The7 Strategy - Grail for Beginner Traders

Among the various trading systems available for free, only a few of them are effective in practice. For the successful application of such strategies, it is enough...

Indices Trading Strategies

Offering lower risk than individual stocks, alongside a more diverse portfolio with smoother price movements, stock market indices around the world are powerful indicators...

How to make money on using a scalping strategy?

Many traders who trade on the forex exchange like to use a scalping strategy. Such a strategy involves a series of short-term daily transactions...

3 Strategies to Boost your Trading Mindset in 2023

Getting ready for the new trading year? Check out this article to discover some of the most effective trading strategies to boost your goals!

Cryptocurrency Trading Strategies: Learn to Profit From Bitcoin and Ethereum

Trading the highly volatile assets can lead to substantial profits, especially when combined with superior trading tools such as 100x leverage, further amplifying their wealth-generating power...

Crafting a Winning Day Trading Strategy: A Comprehensive Guide

Day trading is a popular approach to online earning, involving the buying and selling of various financial assets, such as stocks, commodities, and cryptocurrencies...

Turtle Trading Strategy Explained

Currently, the forex market offers numerous different tools to improve trading. Experts in financial markets develop both simple trading strategies, which will be convenient...

How to develop your signature Forex trading strategy

Trading in the Forex market is a complex daily work that requires great strength, knowledge and experience. Before a trader...

Mastering the Art of Nighttime Rest: Essential Sleep Strategies for Traders

In the fast-paced world of trading, the hustle and bustle extend well beyond the closing bell. The rituals and habits you adopt at the end of the day can be pivotal determinants of your trading prowess come morning...

Ten steps to building a winning trading plan

Trading can be a profitable and exciting endeavour, but it requires careful planning, implementation, and monitoring. Building a winning trading plan is crucial to achieving success in the markets...

Five Tips For Enhancing Your Trading Performance

Trading is a highly competitive field that requires skill, discipline, and knowledge. Whether you are a beginner or an experienced trader, there is always room for improvement...

Martingale Trading Approach: Employing It With Controlled Risk

Within the intricate and volatile domain of financial markets, strategies promising rewards are invariably intertwined with substantial risks. One such strategy is the Martingale approach...

Top 10 forex trading strategies for beginners

If you’re a forex beginner, learning how to better manage trading in the forex market is key to achieving success. This is because the forex market is an incredibly volatile financial market...

How To Cut Losses Trading Cryptocurrencies

Even good trading and investment strategies can lead to portfolio losses if the basic rules of money management are neglected. In addition to the basic rules typical for investing and trading any assets...

Steps to a successful forex trading strategy

Are you an aspiring trader on the cusp of diving into the world of trading forex but unsure how to go about it? Or are you a seasoned forex trader perhaps who’s become a little too complacent...

Forex signals and strategy systems in currency trading

Exchange of a nation's currency for that of another is Foreign Exchange (FOREX). The foreign exchange market is a largest non-stop financial market in the world...

Mastering Cryptocurrency Trading: Strategies for Bitcoin, Ethereum, and More

Cryptocurrency trading has become a captivating realm for investors and traders alike, offering the potential for substantial profits, particularly when combined with tools like 100x leverage...

Best Hedging Strategies - 4 pillars of Profit

Hedging strategies help traders mitigate risks and protect trading accounts from losses. Discover the best hedging strategies to profit from forex. 6 May 2010 was a normal day...

Three Popular Gold Trading Strategies When Trading Gold CFDs

Trading gold has long been a favored avenue for investors looking to navigate the world of commodities. The precious metal's status as a store of value has endured for centuries...

FP Markets information and reviews
FP Markets
81%
RoboForex information and reviews
RoboForex
77%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.