Chaos Forex System is a Forex System for Binary Trading that aims to catch the first bar after a breakout. A breakout occurs when the price moves beyond a certain level of support or resistance, indicating a change in market direction. The strategy is based on Bill Williams’ Profitunity system, which uses indicators such as Alligator, Awesome Oscillator (AO), Fractals, and Market Facilitation Index (MFI) to measure price movement relative to volume.
The main rules of the Chaos Forex System are as follows:
- Wait for a breakout of a fractal line (a line connecting two consecutive highs or lows) that indicates a new trend direction.
- Use the Alligator indicator (a combination of three moving averages) to confirm the trend direction. The Alligator’s jaws (blue line) should be above its teeth (red line) and lips (green line) for an uptrend and below them for a downtrend.
- Use the AO indicator (a histogram that shows the difference between two moving averages of different periods) to measure the trend’s momentum. The AO should be above zero for an uptrend and below zero for a downtrend.
- Use the MFI indicator (a ratio of the bar’s range to its volume) to identify changes in market activity. The MFI should increase when there is more buying or selling pressure and decrease when there is less.
- Enter a buy or call option when all of the above conditions are met and a green bar exists on both AO and MFI indicators. Enter a sell or put option when all the above conditions are met, and there is a red bar on both AO and MFI indicators.
- Set the expiry time of the option to one candle or one minute.
- Exit the trade when there is an opposite signal from any indicator.
The chaos forex system for binary is an example of how Bill Williams’ Profitunity system can be adapted for different types of trading. It is based on his philosophy of trading with chaos theory, which states that markets are nonlinear and unpredictable systems that can be understood by using fractals, self-similarity, and feedback loops. By using this strategy, traders can capture profitable opportunities in volatile markets.
The strategy can be applied to any time frame from 5 minutes to 4 hours, but it is recommended to use 15 minutes, 30 minutes, or 1 hour for binary options trading. The currency pairs that can be traded with this strategy are majors, indices, and commodities.
This Forex System for Binary Options is entirely manual. The indicators produce the signals, but any decisions to enter the market and set protection or profitable exit stops will depend on the trader. Therefore, the trader must be familiar with the principles of risk and reward.
This Forex System for Binary Trading can give you trading signals you can take as they are or add your additional chart analysis to filter the signals further, which is recommended. While traders of all experience levels can use this system, practicing trading on an MT4 demo account can be beneficial until you become consistent and confident enough to go live.
Chaos Forex Strategy can be used on any Forex currency pair and other assets such as stocks, commodities, cryptos, precious metals, oil, gas, etc. You can also use it on any time frame that suits you best, from the 1-minutes through to the 4-Hour charts.
Trading Rules of this Forex System for Binary Trading
As always, to achieve good results, remember about proper money management. To be a profitable trader, you must master discipline, emotions, and psychology. It is crucial to know when and when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility, beyond major sessions, exotic currency pairs, wider spread, etc.
Expiry time Binary high/low: one candle or 1 min
Buy signal or Call
- Price close above the upper channel.
- Accelerator Awesome Ac mode green bar.
- Accelerator Awesome AO mode green bar.
- If the conditions are agreed upon, open a buy position at the close of the break candle.
Sell signal or Put
- Price close below the lower channel.
- Accelerator Awesome Ac mode red bar.
- Accelerator Awesome AO mode red bar.
- If the conditions are agreed upon, open a sell position at the close of the break candle.
Any positions with Chaos Forex System can be liquidated using a fixed profit target. Alternatively, the profit target should be set using previous support/resistance or high/low as a reference point. You may also exit the trade manually if the Non-Repainting Indicator system conditions reverse.
It is recommended to use a stop loss. Set SL below the entry price using previous support/resistance as a reference point Or on the previous high/low swing. Using fixed stop loss settings without any reference points is not advocated.
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