The Williams Alligator indicator is a trend trading indicator that uses three moving average lines to predict potential trade entry and exit points during market trends. The crossover is one of the most common trading strategies with this indicator. But you can also trade trend confirmations and candlestick breakouts with it.
KEY POINTS
The Alligator indicator is a technical analysis tool that helps traders identify trends and consolidations.
It uses three moving average lines to give potential buy and sell signals.
The indicator’s signals are more reliable when the alligator is awake than when it is asleep.
Full breakdown of the Williams Alligator Indicator: [ Ссылка ]
Developed in 1995 by the professional trader Bill Williams, the Alligator indicator has since become one of the favorite indicators among forex traders. The indicator uses three smoothed moving average lines to determine market trends to provide long and short trading signals.
Theoretically, Bill Williams believed that the market only moved in trends 15% to 30% of the time. The rest of the time, it moves inside a range. He also believed that it is in these scarce trends that the trader has the highest chance of making money.
So, this indicator is his attempt to show traders when the market is trending with many trading opportunities and when it is locked in a range. It is, therefore, the perfect indicator to trade ranges as well as utilize the range trading strategy. As a matter of fact, many of Bill Williams’ indicators also follow this idea.
