Bill williams trader: Bill Williams Indicators Technical Indicators Indicators and Signals
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I will tell about them in the following educational ideas…. This is a modified version of Fractals that I made and how to use it. Go long over the green levels and short under the red levels. An option that I didn’t discuss in the video is the potential of a wider trailing stop for longer runs.
Join thousands of traders who choose a mobile-first broker for trading the markets. The indicator looks like a histogram consisting of red and green bars. Green color means that the bar is higher than the previous histogram bar, and red color means that the histogram is lower than the previous bar. Differently put, a series of green bars is a buy signal, and red bars are a sell signal.
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”). I have already mentioned that one could put the second or even the third entry, thus increasing your profits. Williams considers this approach to be safest, referring to it as reverse pyramiding. The strategy suggests that you enter a trade with the least volume upon the first signal, as it is can be a short-term trend. I have already described the example when a divergent bar resulted only in a shallow pullback.
Bill M. Williams
One way to trade the Fractal is whenever the market exceeds the outside extreme high on up Fractals and low on down Fractals, go with the outside direction/Fractal point. I am now going to deal with the basics of the Three Wise Men trading strategy by Bill Williams. Notice during most of this up move, the prices stay above the Alligator’s lips . The prices cross the line for the first time when the bull trend is exhausting.
So, roughly, if the time frame on the current chart is a daily one and refers to the Blue Line, the Red Line would approximate an hourly chart. And the Green Line will show where the market would be in the 10-minute chart. At this level, the trader can quickly and exactly use the tools of the market to increase trading efficiency. In addition, at this level, the trader begins to monitor what most people call “causes” rather than just effects. This is a cycle model, like an infinity sign or number eight. First, such a trader tries to reduce the importance of the problem.
Some traders use it to put the second entry, they add on to their position after the Second Wise Man signal is created. In the past, bull markets ended when all the bulls had bought and there were no new buyers. Today, however, aggressive short sellers also attend the tops of trends and that fact changes the market behavior at the end of significant trends. The bull market reverses when the bulls give way to the bears. The bears giving way to the bulls in a downward market marks all reversals in a downward trend. At level five, we flow deeply into the realm of chaos.
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Deepen your knowledge of technical analysis indicators and hone your skills as a trader. Then some new incoming information begins to affect the traders. There a momentum of new buying, and the is again moving up. This is an ideal moment to add on to our buy position. If the momentum and the buyer’s strength are strong enough to exceed the immediately preceding up Fractal, we would place a buy order y just over the Fractal’s high. If with a steady up-move, the green line is on the top, next, there is the red line and the blue line is at the bottom.
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Get $25,000 of virtual funds and prove your skills in real market conditions. When it comes to the speed we execute your trades, no expense is spared. Fractals are core formations of the so-called Elliot waves, which I will deal with in my future articles. Now, I want to focus on two important principles.
As you know, it signals that the market sentiment is more bullish in the second half of the bar. Accordingly, a bearish reversal bar is the bar with the highest high, and it closes in the lower half, being well outside the Alligator’s mouth. It signals that when the bar was opening, bulls dominated the market, but they gave the way to bears by its close. Let me explain the entrance and exit strategies on examples. In the dailyBTCUSDprice chart, you see the Alligator’s lines are moving randomly and then, they start moving in the same direction and separating at the same time. A pattern showing the lines going apart is referred to as the Hungry Alligator by Williams.
Otherwise, entering any trades will yield only losses. Note that, during the entire downtrend, bars close below the Alligator lips . When the bear trend is exhausting, the price chart breaks through the lips upside. The Red Line is the moving average for one significant time frame lower.
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As you can see, there are several red boxes that highlight bearish fractals that formed during the move to the upside. The simplest way to protect your assets is by setting a trailing stop at a distance equal to the one between the high of the divergent bar and its low. You can also exit the trade at the lowest low of the three or five preceding bars in a bullish trend, or the highest high in a bearish trend. Let us first study some theory and then move on to practical examples. Williams writes that most traders and investors think that the market is too complex, and so, they miss obvious things.
In a bear market, the lines are in the opposite order. The red zone of the chart displays the Sleeping Alligator when a downtrend starts, it opens the mouth downside. The markets usually stop, reverse or become balanced before most participants realize what is really going on. That is why traders miss potentially profitable situations and even experience losses, entering trades at wrong points. This approach provides an integrated approach to monitoring the market’s momentum on three different time frames in one chart.
Note that when the lines start separating, the first line to react to the positive new incoming information is the green line, next the red line reacts, and the blue one is the last to turn. The Alligator helps you select an optimal time to open a position. The Green Line will be the first indicator that significant amounts of contracts are coming into the markets and are biased in one direction. The Blue Line is a confirming signal proving that we have made the right decisions.
Williams calls chaos a higher form of order which is governed not by cause and effect but by randomness. The market follows a path of least resistance which is defined by a hidden structure, like the flow of a river depends on the underlying structure of a riverbed. A trader has to discover the market’s structure and trade according to it. Adding the Bill Williams Fractal Indicator in Metatrader is very easy because it is already built into the platform. There is no need to go out and download something else. You can simply select the indicator to add it to your chart.
If you think about it, again it makes quite a bit of sense that a recent high of five candlesticks being broken to the upside shows renewed strength. Now that the indicator is on the chart, it will tell you when a fractal has been formed. Contrary to what you may think at first, the idea isn’t to turn around and go with a fractal, rather, it is to go against it. If you think about it for a moment, it does make perfect sense. If a previous reversal area gets broken through, then, obviously, the market has shown some strength in one direction or the other.
