Bill Williams Alligator MT4 Expert Advisor

The bright side of this software is the fact that it is the best for studying the market structure, analyzing, and preparing for trading. For the primary order, the volume can be 1-2% of the capital. After a breakout happens and the first order triggers, the trader should monitor next fractals to buy forming. The size of the following orders can be increased several times. Simultaneously, the protective order is to be optimized, moving it along the renewed fractal stops. At this level, the trader can manage several positions simultaneously, changing trade volumes.

  • No matter how good the indicator is, you always need to get confirmation of a signal.
  • Red fractals indicate bullish trends and act as a buy signal; orange fractals indicate bearish trends and act as a sell signal.
  • Most importantly, when developing the fractal indicator, Williams identified four key elements of an asset’s structure.
  • The mighty wave № 3 is replaced by the correctional wave № 4, which is explained by locking in profit.
  • If this program triggers, our main task becomes protection and the feeling of protection.

A trader on the third level knows invest the maximum with a minimal risk and invest the minimum when the risk in high. The trader is competent but yet unable to express their personality on the market. Protecting their positions devotedly, the trader can withstand a row of small losses and remain on the market. According to the Trading Chaos strategy, an airbag, or a protective Stop Loss should be placed one point above/below than the highest/lowest value of the candlestick, previous to the current one. The type of moving average used for the signal line is a simple moving average.

That is why I recommend you reading not only the first book but also the subsequent ones. However, you must remember that if you just read the book and never apply it to trading, you will just read a book. Follow all the steps of the trader’s development, gain the tranquility of an expert and enjoy your trading. The aim is to study the connection between the characteristic features of experienced traders and the market nature. The aim is to learn how to read the market without a mistake, to know and understand the things that will allow to maximize the profit from investments. In an upfractal, the trader must pay attention to the highest value of the candlestick only, in a downfractal – to the lowest value.

Step #2: Check if the Awesome Oscillator Indicator Displays Two Swing Lows and the Second Low is Higher than the First.

In the five bars, if there are two highs or two lows, this indicates a reversal could come between them. However, the indicator can send signals between forex broker rating five bars depending on the trend. For example, we can have a buy signal below one daily bar and then a sell signal above a daily bar the next day.

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The Williams Fractal sent a buy signal at $38,000 and the green line moved above the red and blue which confirms a bullish trend. A trader could open a long trade and ride it out until the alligator lines reverses. The trend reversed on trade forex without leverage the right when the blue line traded above the red and green lines which indicated bearish momentum. Bill Williams, the trader who developed the alligator indicator, believed that markets only follow a trend 15% to 30% of the time.

Plan your trading

Although the Alligator indicator is one of the most reliable ones, it may also provide fake signals. If the green line crosses the red line opposite to the existing trend and then gets back, it’s a fake cross. One of the indicator’s drawbacks is the time lag, which is a common pitfall of all the indicators.

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A green bar implies that a trend is becoming stronger than the previous period, whereas a red bar indicates that the trend is becoming weaker than the previous price action. The Alligator indicator is composed of three smoothed moving averages projected into the future by several periods. The indicator is specifically purposed to ensure that traders only place their trades in optimal aaafx review trending markets. It is aptly named ‘alligator’ because it mimics the feeding habit of the animal and can help traders pick out the best times to ‘feed’ on the pips available in a trending market. However, the indicator also sent two false signals above–both could have misled traders with a sell signal. The alligator indicator showed we’re still in a bullish trend without a reversal.

Example of the Williams Alligator Indicator

Williams developed several technical indicators (Accelerator/Decelerator Oscillator, Alligator, Awesome Oscillator, Fractals, Gator Oscillator, and Market Facilitation Index). You can find these indicators in Metatrader (click “Insert”, choose “Indicators” and then “Bill Williams”). In this phase, both bars on either side of the zero line turn green. This is a signal that a trend has formed in the market, and traders can now place trades in the direction of the new trend.

bill williams trader

In the fear program stops and reversals are almost impossible. While “fear” struggles with the market, “taking pleasure” moves along with the market smoothly and synchronously. If this program triggers, our main task becomes protection and the feeling of protection.

Program of confidence in trading

A new fractal will not appear unless the Bitcoin price reverses to the upside and starts a new bullish trend. Williams Fractal is an indicator designed to signal reversals. The WF indicator is based on “fractals” or small triangles that appear above or beneath the candlesticks. Red fractals identify a bullish uptrend, and orange fractals identify a bearish downtrend.

If they does not participate in trading, their opinion has no influence on the market. Finding a formation of two adjacent fractals heading in the opposite direction, we can see a fractal start and a fractal signal. If the latter is broken out, we move in the direction o the breakout. A fractal stop is on the one but last fractal in the opposite direction. It can be a fractal start, fractal signal, and fractal stop.

It is basically an assessment of how market prices react to new volume in the market. By assessing price change and tick volume, the BW MFI can give a comprehensive assessment of market behaviour and prevailing sentiment. It essentially filters out potentially false price movement to ensure that traders only take trades in ideal market conditions. This is a 5-period smoothed moving average, plotted using median prices, and is projected 3 bars into the future. This is an 8-period smoothed moving average, plotted using median prices, and is projected 5 bars into the future. This is a 13-period smoothed moving average , plotted using median prices, and is projected 8 bars into the future.

An arrow above a price bar is a buy fractal, whereas an arrow below a bar is a sell fractal. A buy fractal serves as resistance, but a break above it triggers a buy signal. Similarly, a sell fractal serves as support, but a break below it triggers a sell signal. The Fractal indicator is a trend following tool that is functionally similar to the Parabolic SAR. It measures the market momentum with the aim to detect potential trend…

Market dynamics are based on the principle of opposing energies and these effects are described in the chaos theory. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. Wait for the candlestick to close below the support level. The Awesome oscillator histogram should normally align with the price action. In this regard whenever the price forms a swing low this should be visible in the AO histogram as well. Compare that with the MACD indicator which generated far more signals and inevitably far more false signals.

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