Chaos Theory by Bill Williams: Overview

Written by Editor of Alpari.co.uk
Last updated: Monday, 23 April 2007

Bill Williams developed unique trading concepts by combining trading psychology with the Chaos Theory and its particular effect on the markets. He suggested that rewards from trading and investing are determined by human psychology and that anyone can become a profitable trader/investor if they uncover hidden determinism in seemingly random market events.

Bill Williams says that fundamental or technical analysis can not guarantee steady profitable results because they do not see the real market. Moreover, Bill Williams says that traders lose because they rely on different types of analysis, which are useless in nonlinear dynamic models, i.e. the real markets.

Trading is a psychological game, the way of self-realization and self-knowledge, so the best way to become successful is to find your trading self, to get to know it better and to follow it no matter what. Thus, there are two significant aspects: self-knowledge and understanding of the market structure.

It is Bill Williams' view that making money can be easy if you understand the market structure. In order to do this you should be aware of the market's inherent parts called dimensions, each of which adds to the total picture.

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