Bill Williams’s inventions have made an outstanding contribution to modern trading. Williams is the creator of famous indicators, such as Alligator, Fractals, and Awesome Oscillator, wh...
Bill Williams’s inventions have made an outstanding contribution to modern trading. Williams is the creator of famous indicators, such as Alligator, Fractals, and Awesome Oscillator, which he introduced in his book ‘Trading Chaos.’ Many traders nowadays use Williams’s inventions and trading systems to trade in financial markets.
This article deals with a popular Alligator indicator. It will help you analyze any market, identify the trend, and spot the entry points at the beginning of the trending market, giving an advantage over most traders.
The Forex Alligator or the Williams Alligator is a technical trend indicator that defines the market state and generates entry points at the beginning of the price momentum.
As you know, the market can be either trending or consolidating. The price moved in momentum for about 30% of the entire time; it trades in correction or accumulation for 70% of the time. The Alligator can accurately identify the market situation.
Another benefit of the Williams indicator is that it generates the entry points when the momentum is just emerging. Every trader wants to enter a trade at good prices and exit at the peak of a trending price movement. Using the Alligator, you will be able to pick up strong market moves and take profits at the end of the trend.
However, the Alligator alone is not enough to find out good entry points. Bill Williams himself applied Alligator together with other technical indicators he developed. He developed the Profitunity trading system based on the combination of the technical indicators created by Williams.
The trading system applies Fractals and Awesome Oscillator oscillators as additional filters to define entry points.
As for other indicators, not included in the Profitunity system, trades use standard oscillators, RSI and Stochastic, as signal filters.
The Williams Alligator analyzes stock indexes, equities, commodity and precious metal markets, Forex, and cryptocurrency markets. It is a technical indicator based on the moving averages with different periods.
Moving averages are the price derivatives, so if there is a price chart, and you can attach moving averages to the chart, such a market can be analyzed using the Alligator.
The best timeframes to trade with the Alligator are the daily, four-hour, and one-hour timeframes. It makes no sense to use the Alligator in shorter timeframes, as there will be many false signals due to the price noise. For day trading. The H1 will be quite suitable.
Traders employ the Williams Alligator to open both medium-term and long-term positions in the daily or weekly timeframes and the positions during the day or week in the shorter timeframes. Continue reading on Litefinance.