Today Forex market has a great number of analytical methods and trading strategies, which provide certain share of success to traders. One of the most popular in this reference, as well as one of the most ambiguous one, is Bill Williams’s strategy “Trading Chaos”.
Its popularity lies in the fact that by looking at the market from the position of its structural formations it has helped many traders to earn tens and even hundreds of thousands dollars. The ambiguity of the system is such that only 15-20% of traders effect successful trade by using it, whereas most of them suffer losses, rather than profits. However, in this case one should keep in mind individual perception of “Trading Chaos” and, consequently, the skill of applying its principles into practice.
A thorough analysis of how “Chaos Theory” works, as well as a demonstration of how the system makes the market your friend, is provided by the best ECN broker of 2013 according to MasterForex-V Expo project, namely, RoboForex company. In particular, it is performed via a series of unique webinars, which explain everything about Forex, from “A” to “Z” and enable applying the gained knowledge in practice.
“In our daily analytical webinars we perform the analysis of current market situation with the help of “Trading Chaos” strategy. In the course of webinars we pay attention to most popular currency pairs and metals, as well as signals of entering the market, placement of delayed orders, and setting stop-losses,” says Dmitry Gurkovski, a leading analyst of RoboForex.
“Market Leader” journalist has met the RoboForex specialist in order to find out about features of “Trading Chaos” as a method of market analysis, as well as personal trading preferences of the famous financial analyst.
Chaos is Highly Organized Order
Market Leader: Hello, Dmitry. You are one of the leading analysts of RoboForex company and the presenter of analytical webinars with overview of market situation. Therefore, it would be sound to ask your opinion about the topical for many traders issue of effectiveness of using B. Williams’s system “Trading Chaos”. This strategy seems to be most ambiguous; nevertheless, RoboForex company pays much attention to it. Is it reasonable?
Dmitry Gurkovski:Hello. It is more than reasonable. Just like any other trading or analytical strategy, “Trading Chaos” system has the right to exist at least because these days many of its followers get stable and high profit at financial markets. A different matter is with those, who it has not suited to; they spread myths about its incompetence, but it is known that every man has his taste.
Market Leader: What is the point of “Chaos Theory”?
Dmitry Gurkovski: The strategy is based on the theory of random walks, where there will certainly appear regularity. We are used to perceiving chaos as something orderless; however, in fact, chaos is a higher level of order, which follows the laws of non-system and randomness counter to cause-and-effect relations in other, “logical”, non-chaotic systems. Moreover, stability is a temporary occurrence, and chaos is a permanent one.
According to B. Williams’s theory, financial markets are chaotic. Therefore, he claims that technical and fundamental analysis do not allow for stable profit. What is more, “Chaos Theory” disproves one of the main principles of classic technical analysis: market trend in future reminds market trend in the past.
Market Leader: If I am getting you right, “Chaos Theory” is effective only when you grasp the entire depth of its structure…
Dmitry Gurkovski:Yes, exactly so. At my webinars on market analysis with the help of “Trading Chaos” or at awareness-rising webinars, where main trading strategies are regarded, I highlight that professionalism in trading will appear only once you have studied the structure of the market. In his system Bill Williams suggests study by the following five points:
1. Fractal (space of the phase);
2. Driving force (energy of the phase);
3. Acceleration/slowdown (power of the phase);
4. Zone (combination of power/energy of the phase);
5. Balance Line.
Not delving into “Chaos Theory” specifics, I will admit that Bill Williams has created a separate indicator for every of the abovementioned points; this indicator helps to define the necessary phases.
Market Leader: If it is not a secret, do many clients of RoboForex company use “Trading Chaos” strategy, and how successfully?
Dmitry Gurkovski: I do not put down special statistics on this, but, as far as I know, all traders that work with this strategy get not only stable, but also rather high profits.
Market Leader: Dmitry, please tell us few words about yourself: what is your professional experience in trading, how have you come to Forex market? What have you found attractive about it?
Dmitry Gurkovski: I have become interested in Forex market about ten years ago as a recommendation of a friend who was also dealing with trading. But financial markets have been my interest long before my first deal. For the first several years I have only studied the market and various methods of analysis and forecast, concerning past and future trends alike. I would like to draw particular attention to the fact that after demo trading I have not immediately switched to real trade. This, in my opinion, has been a big flow, for nothing but real market atmosphere may teach you how to trade. Many people know that one may “make” a capital from 100 dollars on a demo account, but bring your deposit to nil by several deals when switching to real trade. All reasons of such result lie in perception of the market.
Freedom was the first thigh that attracted me in the market. I thought, “In this sphere I may work where I want and when I want… Here everything depends on myself.” Is it not the thing every person strives for – doing what he likes and earning money from this?
Another attractive moment has been provided by the fact n not only earn money at the market, which is a good motivation itself, but also realize my analytical and creative potential.
Market Leader: How often do you trade?
Dmitry Gurkovski: I usually trade depending on market situation. If the picture is clear for me, I trade, but I cannot say that I trade from eight o’clock till eight o’clock. There are days when I do not trade at all; it all depends on market situation. I try to avoid the “itch” to make a deal, but I used to do so in the past.
Market Leader: What computer equipment do you use?
Dmitry Gurkovski: I usually use a laptop and a smartphone, I used to use a sheet too earlier. I suppose that everything is to be fairly simple; therefore, I do not use a panel of 25 monitors with news from Dow-Jones, Reuters, Bloomberg, numerous charts of currency pairs, indexes, etc.
Market Leader: In other words, can we say that for a trader being overloaded with information is as undesirable as its lack?
Dmitry Gurkovski: Absolutely right. If, for example, a beginning trader faces tens of online sources of analytical information, which contradict one another, he will be at a loss and, in best case, will not open a deal. But if a position has already been opened…consequences may be fatal. However, professionals may also take wrong decisions, when following emotions that have arisen because of information being received from 10-20 sources at a time make them act thoughtlessly. Similar situation may occur if a trader works with the only source of information, having no opportunity to check its accuracy, and this having to rely solely on it. Therefore, I believe that in a trader’s analytical constituent everything should be balanced, harmonious, and bear maximal comfort for a user.
Market Leader: Dmitry, do you have favourite types of analysis and instruments that you rely on?
Dmitry Gurkovski: I do not set a certain type of analysis as a favourite one, but I use ideas of fundamental analysis along with wave, graphic, computer, and “Trading Chaos” analysis; in other words, I use a certain complex approach.
Market Leader: In your opinion, what mistakes are most common in trading?
Dmitry Gurkovski: I believe the most widespread mistakes are the following:
А) wrong distribution of risks and money, which means a faulty system of risk- and money-management;
B) “player’s approach” – guessing direction of trends and waiting for losses to finish;
C) psychological barriers – fear before deals (uncertainty), failure to accept loss as one of trading elements.
Market Leader: What advice would you give to beginning traders?
Dmitry Gurkovski: My advice is the following: be firm at the market, but do not lose rationality; be patient – wait for the appropriate trading moment; manage capital and risks wisely!
