# Bill Williams Profitunity Also known as: Profitunity, Trading Chaos, Bill Williams trading system, chaos trading, Three Wise Men, Wise Man signals. A Momentum & Oscillators concept (Classic single-name oscillators) in the LuxAlgo Library, with 7 indicator implementations. ## What is Bill Williams' Profitunity system? Profitunity is Bill Williams' trading-chaos method, a rule set that ties the Alligator, fractals, the Awesome and Accelerator oscillators and the Market Facilitation Index together around three named entries, the Wise Man signals. Williams, who also gave the name to his trader-education business, set it out in Trading Chaos (1995), New Trading Dimensions (1998) and Trading Chaos, Second Edition (2004, with Justine Gregory-Williams). Its premise is that markets range most of the time, so a trader should wait for the market to show its hand. Each tool has one job. The [Alligator](https://www.luxalgo.com/library/concept/alligator/), three displaced smoothed averages of median price, decides whether a trend is running. [Williams fractals](https://www.luxalgo.com/library/concept/williams-fractal/) mark five-bar swings used as breakout triggers. The [Awesome Oscillator](https://www.luxalgo.com/library/concept/awesome-oscillator/) measures momentum and the [Accelerator Oscillator](https://www.luxalgo.com/library/concept/accelerator-oscillator/) its change; Williams' zones color a bar green when both rise and red when both fall. The [Market Facilitation Index](https://www.luxalgo.com/library/concept/bill-williams-market-facilitation-index/) grades range per unit of volume, and the [Gator Oscillator](https://www.luxalgo.com/library/concept/gator-oscillator/) charts the Alligator's spreads. New Trading Dimensions frames the core as five dimensions: fractal, momentum, acceleration, zone and the Alligator's balance line. The vocabulary borrows from chaos theory, but the tools are moving averages, swing rules and bar comparisons; the fractal is a five-bar swing marker, not a measured fractal. The fixed settings are conventions rather than optimized parameters, and no independent study has shown the system profitable. Its strength is that it is fully specified, entries, stops and add-ons included, so it can be tested as a whole. ## How to identify the three Wise Man entries The second edition of Trading Chaos packaged the entries as three Wise Men, each with a defined stop, with positions built in stages. The bullish case; mirror every condition for sells: 1. Check the Alligator first: a divergent bar only counts when price has stretched well away from the lines, which Williams called angulation. 2. First Wise Man: a bar that makes a lower low than the bars before it but closes in its upper half, below the Alligator's mouth, while the Awesome Oscillator is still falling. Buy on a stop above its high; a break of its low cancels the setup. 3. Second Wise Man: three consecutive rising Awesome Oscillator bars after entry; add on a break above the high of the price bar that printed the third. 4. Third Wise Man: an up fractal that forms above the Alligator's teeth; buy on a stop just above the fractal high. 5. Filter with zones (no new buying on red zone bars) and trail stops under recent lows or the Alligator's lines as the move extends. ## How traders use it - As a full checklist: traders following the method act only when the parts agree, such as a fractal breakout in the direction the Alligator's mouth is opening, on green zone bars. - As a parts bin: many traders keep one or two components, the Alligator as a regime filter or fractals as breakout and stop levels, and drop the rest. - On platforms: MetaTrader ships the six tools as its built-in Bill Williams indicator group, and the LuxAlgo Library publishes each as a standalone indicator, from Williams Alligator to the Bill Williams Market Facilitation Index. ## Profitunity vs its components - **Alligator** (https://www.luxalgo.com/library/concept/alligator/): The system's trend filter and balance line. Profitunity is the framework around it: which entries count once the Alligator wakes, where stops go and when to add. - **Williams Fractal** (https://www.luxalgo.com/library/concept/williams-fractal/): A five-bar swing definition used across many methods. In Profitunity it becomes the Third Wise Man, valid only when it forms beyond the Alligator's teeth. - **Awesome Oscillator** (https://www.luxalgo.com/library/concept/awesome-oscillator/): Supplies the momentum dimension and the Second Wise Man, alongside its own saucer and twin-peaks signals. Profitunity adds the price-bar and trend conditions that decide when an AO signal is acted on. - **Elder Impulse System** (https://www.luxalgo.com/library/concept/elder-impulse-system/): Elder colors bars by agreement between an EMA slope and the MACD histogram; Williams' zones use the Awesome and Accelerator oscillators. Impulse is a standalone filter, zones one layer of a larger system. ## FAQ ### What are the Three Wise Men in Bill Williams' system? Three entry signals from Trading Chaos, Second Edition: a divergent bar away from the Alligator (the first), three consecutive Awesome Oscillator bars in the trade's direction, used to add (the second), and a fractal breakout beyond the Alligator's teeth (the third). ### What is a bullish divergent bar? A bar that makes a lower low than the bars before it but closes in the upper half of its range: sellers pushed to a new low and lost control by the close. In Williams' rules it must form well below the Alligator, with the Awesome Oscillator still falling. ### What are Bill Williams' five dimensions? From New Trading Dimensions: the fractal, momentum (the Awesome Oscillator), acceleration (the Accelerator Oscillator), the zone (bar colors from those two agreeing) and the balance line drawn by the Alligator. ### Does Bill Williams' chaos trading work? There is no independent evidence that it does, and claims about its results come from its own literature. Like most trend-following methods it gives back gains in ranges; test the full rule set on your market before relying on it. ## Implementations in the Library - Williams Alligator (LuxAlgo, the standard build of the classic formula): https://www.luxalgo.com/library/indicator/williams-alligator/ - Williams Fractal (LuxAlgo, the standard build of the classic formula): https://www.luxalgo.com/library/indicator/williams-fractal/ - Awesome Oscillator (LuxAlgo, the standard build of the classic formula): https://www.luxalgo.com/library/indicator/awesome-oscillator/ - Accelerator Oscillator (LuxAlgo, the standard build of the classic formula): https://www.luxalgo.com/library/indicator/accelerator-oscillator/ - Gator Oscillator (LuxAlgo): https://www.luxalgo.com/library/indicator/gator-oscillator/ - Bill Williams Market Facilitation Index (LuxAlgo): https://www.luxalgo.com/library/indicator/bill-williams-market-facilitation-index/ - Bill Williams Profitunity (LuxAlgo): https://www.luxalgo.com/library/indicator/bill-williams-profitunity/ ## Related concepts - Balance of Power: https://www.luxalgo.com/library/concept/balance-of-power/ - CCI: https://www.luxalgo.com/library/concept/cci/ - Williams %R: https://www.luxalgo.com/library/concept/williams-percent-r/ - Ultimate Oscillator: https://www.luxalgo.com/library/concept/ultimate-oscillator/ - True Strength Index: https://www.luxalgo.com/library/concept/true-strength-index/ - Relative Vigor Index: https://www.luxalgo.com/library/concept/relative-vigor-index/ - Awesome Oscillator: https://www.luxalgo.com/library/concept/awesome-oscillator/ - Accelerator Oscillator: https://www.luxalgo.com/library/concept/accelerator-oscillator/ - Gator Oscillator: https://www.luxalgo.com/library/concept/gator-oscillator/ - Elder Ray: https://www.luxalgo.com/library/concept/elder-ray/ --- Source: https://www.luxalgo.com/library/concept/bill-williams-profitunity/ (LuxAlgo Library, the encyclopedia of trading & technical analysis). Free to use with attribution: https://www.luxalgo.com/library/license/