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Piracy in the presence of internet and computers proves to be a biggest jolt to the concerned industry. To reduce the piracy and duplicity of the images, digital watermarking technique is having an edge over the other available techniques. In this paper, a blind digital watermarking algorithm is presented which is robust enough to resist the watermark against the attacks. The algorithm exploits the random sequence generated by Arnold and Chaos transformations. Discrete wavelet transformation of third level decomposition is used to convert the image into its frequency domain. The binary watermark is embedded into its HL3 domain. The evaluation of the algorithm is calculated in terms of peak signal to noise ratio and non correlation. The results prove that the algorithm is robust enough to handle the attacks like JPEG, filtering, and different types of noise attacks.