Forex Chaos Trader Lite Robot attempts to use aspects of chaos theory to place trades in the marketplace. This Expert Advisor, in particular, draws upon theories made by Bill Williams. Every version of MetaTrader 4 contains the Bill Williams indicators. I wondered why was he deemed so important as to have his own set of indicators added to MetaTrader with name attribution. Conducting research I found that Bill Williams wrote a book using chaos theory to trade the markets. The Bill Williams indicators are useful when trading using chaos theory.
The EA locates bearish and bullish divergence and initiates a trade at the possible beginning of a trend change, this is the first wise man. Next, it will attempt to add positions if the trade is going in the correct direction based upon the Awesome oscillator, when the Awesome indicator repeats three up bars for buys-stops or three down bars for sell-stops, this is the second wise man.
The third wise man is based on fractals. When a fractal is formed, a buy stop goes above it if it is a buy fractal and vice versa. Supposedly, during a trend there are moments where the trend stops for a moment and then recovers, this is designed to have you add to your positions at those recovery moments. Suggest adding fractal indicator along with Alligator indicator.
If at any time it gets a notice that it is trading in the wrong direction, it will close all the trades in the wrong direction and open one up in the direction it believes to be correct. The Expert Advisor has six parameters.
- magnitude = 10 – pips of distance you want to be from the mouth of the Alligator.
- UseFirstWiseMan – if you want to take first wise man trades.
- UseSecondWiseMan – if you want to take the second wise man trades.
- UseThirdWiseMan – if you want to take the third wise man trades.
- lotSize – size of the lots you want to trade with.
- magic – unique identifier for this EA.
Copy and paste the file into the MQL4 Experts folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Experts (paste here)