EDUCATION: Williams Alligator Indicator
Hello, dear subscribers!
Today's topic is Williams Alligator (WA) Indicator, which is very important and efficient trading tool at any timeframe.
Definition
WA consists of three lines:
Jaw = Moving average with length 13 and offset 8
Teeth = Moving average with length 8 and offset 5
Lips = Moving average with length 5 and offset 3
But you can choose your own settings.
This indicator usually use for trend confirmation and works perfect with other indicators, which will be examined in next topics.
How to trade with Williams Alligator?
Alligator has 2 states: slleping and feeding time. The yellow areas demonstrate the sleeping time, when the lines are intertwined. During this period is not recommended to trade. When the lips start rapidly move down it means the downtrend start. After this the jaw starts open and the feeding time confirmed. When the red candle closed lower than all three MA lines, this is the perfect moment to entry short position. The exit condition is the crossover the lips and teeth lined, but you can do it earlier - when the price broke up the lips or teeth lines.
For the long position the opposite is true, the lips line have to rapidly move up and be above other MA lines.
Summary
1)Define the alligator sleeping time
2)Find the moment when lips line starts to move down and below other lines for short and move up and above for long
3)Wait the candle close below/above all three lines for short/long and entry position
4)Exit the position when the lips line crossed the teeth line
This indicator is also has not perfect performance in sole use, but with other indicators it can bring a great profit. We will talk about it next time.
Today's topic is Williams Alligator (WA) Indicator, which is very important and efficient trading tool at any timeframe.
Definition
WA consists of three lines:
Jaw = Moving average with length 13 and offset 8
Teeth = Moving average with length 8 and offset 5
Lips = Moving average with length 5 and offset 3
But you can choose your own settings.
This indicator usually use for trend confirmation and works perfect with other indicators, which will be examined in next topics.
How to trade with Williams Alligator?
Alligator has 2 states: slleping and feeding time. The yellow areas demonstrate the sleeping time, when the lines are intertwined. During this period is not recommended to trade. When the lips start rapidly move down it means the downtrend start. After this the jaw starts open and the feeding time confirmed. When the red candle closed lower than all three MA lines, this is the perfect moment to entry short position. The exit condition is the crossover the lips and teeth lined, but you can do it earlier - when the price broke up the lips or teeth lines.
For the long position the opposite is true, the lips line have to rapidly move up and be above other MA lines.
Summary
1)Define the alligator sleeping time
2)Find the moment when lips line starts to move down and below other lines for short and move up and above for long
3)Wait the candle close below/above all three lines for short/long and entry position
4)Exit the position when the lips line crossed the teeth line
This indicator is also has not perfect performance in sole use, but with other indicators it can bring a great profit. We will talk about it next time.
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