Trading Strategy and Technical Analysis
technical indicators

There is a common belief that technical indicators do not work well in trending markets. Technical indicators work as well in trending markets as they do in non-trending markets. In fact, the behaviour of an indicator tells a lot about the strength of the trend. For instance, during a strong uptrend, it is common for indicators to frequently venture into overbought territory and barely reach oversold zones. Unless these dynamics start to change, the fact that overbought levels are easily reached but oversold levels are barely reached tells how robust the current uptrend is.

What Is the Williams Alligator Indicator and How Do You Trade It? - Investopedia

What Is the Williams Alligator Indicator and How Do You Trade It?.

Posted: Mon, 13 Dec 2021 08:00:00 GMT [source]

We look at the person when they are speaking and listen to what they are saying. This also applies to entries into the market, which should be analyzed and updated constantly. Also examining the volume up to this point in time, we see that volume is falling. Its movements and patterns, whether the river is flowing rapidly or calmly and in which direction, depend on the underlying structure of the riverbed. The creative process is very different to reacting to present circumstances and herein lies the key to successful trading. For example, suppose you put a trade with a tight stop loss, then the market move to this level to invalidate your trade.

MACD Indicator

If the last has the smallest bar range within the sequence, it is an NR4 pattern. Bar range refers to the difference between the high and the low of a bar. As the market alternates between range contraction and range expansion, the NR4 alerts us to standby for explosive moves. As the lower volatility comes within the context of seven bars, the NR7 pattern is a stronger sign of decreasing volatility. As the market alternates between range contraction and range expansion, the NR7 alerts us to standby for explosive moves. Trend Analyser is a professional charting and analysis software that comes with state-of-the-art tools to determine trend, momentum, buy and sell points for stocks.

An increase in the ATR line suggests that volatility is increasing, while a decrease in the ATR line suggests that volatility is decreasing. After your efforts to popularise Bollinger Bands,this is another brilliant contribution by you . The value of the range between the jaws and the real price tells you about an interpretation of this new data by players. There are 3 signals for entry, each of which is called “Wise Man” by Bill Williams. The goal of an expert trader is to trade using his state of mind.

  • Inverse Fisher Transform On Williams %R Since Williams R indicator produces negative values, I preferred to add 50 instead of subtracting 50.
  • This has allowed less time in front of the computer without an adverse affect on returns.
  • Updated an existing Divergent Bar script to be able to show all divergent bars.
  • The RSI can also be used to spot for positive and negative reversals.
  • You can play with the setting, increasing/decreasing the time period and the shift for higher accuracy .
  • Professional analysts frequently employ technical analysis in conjunction with other sorts of studies.

It is essential that you read all the content posted here before investing capital into forex market. I want to buy above price of 15 min candle high when 15 min candle crossed and clossed above alligators Jaw. Hellooo....what is meant by 'smoothing ' used in moving average .. Please provide pdf for fundamental and technical analysis all chapter in mail. Hi Suresh, at present, we have most of the indicators that are available on charting platforms. However, we shall have a look at the CPR indicator and see if we can incorporate it onto our platform.

Bill Williams Alligator Strategy

MACD tells you about the momentum but the entry point needs to be more precise IMO. Notice in the above chart that after the start of the uptrend, price entered a consolidation mode and traded inside a down sloping channel for a few months. During this period, the CMF line consistently declined from its peak.

reversal bar

Therefore, the Parabolic SAR simply supplies potential trades. You’ll then need to look at the inventory from other technical angles to see if the buy sign is price taking. The parabolic SAR indicator is used by traders to find out a trend’s course, short-time period worth reversal points, and also can present buy and sell signals. In other words, the Alligator is sleeping and waiting for alterations in market conditions.

The third is the histogram, which is the difference between the MACD line and the signal line. An indicator can also be used whenever central value crossovers take place. For instance, if the central value of an indicator is 0, it means a reading above zero is bullish and that below zero is bearish. Crossovers above and below this value can be used to gauge the direction as well as the strength of the trend.

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Bullish reversal bar indicates a lower minimum relative to previous bars and closes above its midpoint. It says that at the beginning of the bar formation forces were on the side of the bears, but then the power went to the bulls. Obviously, in order to shift the blue line, more information is needed than to move the red or the green one. Any trading platform will suit for this trading system, as indicators of Bill Williams has long become standard in any terminal. The strategy can be used on any timeframe, but the author recommends the daily chart.

Swing traders taking the next step will find great value in daily and 60-minute charts, while market timers will benefit when they step back and combine daily and weekly charts. In both cases, alignment between key Fib levels in different time frames identifies hidden support and resistancethat can be utilized for entry, exit, and stop placement. Fibonacci levels are also frequently used to root out where new support and resistance levels might be when there’s a big shift in the value of a crypto asset, as mentioned earlier. Within a Fibonacci Forex trading strategy, traders can go one step further and add in more technical analysis to help confirm whether the market will actually turn or not.

In simple words, a bearish swing failure appears as an ‘M’ pattern with the second high being below the first. It indicates that bullish momentum is weakening and that a trend reversal could be in sight. In simple words, a bullish swing failure appears as a ‘W’ pattern with the second low being above the first low. It indicates that bearish momentum is weakening and that a trend reversal could be in sight. Swing failures are a reliable pattern, especially when they are accompanied by divergences. The green line indicates the lips - this level is the weakest and has the fastest reaction to price changes.

bullish divergence

As the uptrend matures, price will start struggling to touch the upper band. If such an action is followed by a break below the middle band and move towards the lower band, it is an early warning that the uptrend could be in the process of reversing. The opposite scenario holds true when the price is in a downtrend and how the dynamics change when the downtrend is about to reverse into an uptrend. The alligator strategy is a trend-following strategy based on the Alligator indicator. This indicator consists of three moving averages set at different periods, and the default settings for this indicator are 13, 8, and 5. As the working week was once 6-days, the interval settings of represent 2 weeks, 1 month and one and a half week.

The first observation, marked A, displays a bearish divergence. Notice how this divergence occurred with both RSI peaks in the overbought zone. The highest high in the price registered during this period was a classic bearish engulfing candle that engulfed not only one but the previous two candles. The second observation, marked B, displays a positive reversal. Notice that during this period, the lower low in the RSI was accompanied by a higher low in price, which is a bullish development. No such requirement exists for a positive or negative reversal.

However, notice that the CMF line did not sustain for long below the zero line. Instead the CMF line broke above the sloping trendline a few days before the price broke out of the channel. The earlier breakout in the CMF line on this occasion served as a potential signal that the price could break out of channel soon. Notice in the above chart how the price formed a bullish divergence with the CMF line.

When the alligator indicator strategy was in a downtrend, notice how the price moved between the lower and the middle band, while frequently touching the lower band. If a chartist identifies such a trend during its infancy, he can use it to his advantage and ride the trend until the dynamics of Bollinger bands start changing. Notice that as the intensity of the downtrend slowed down , price failed to touch the lower band and started moving above the middle band while even touching the upper band.

Not the most unusual but i really like Lumber / Gold price ratio index. Lower values signal risk-off sentiment when investors flock to safe haven assets. Right not now moving average can be added based on open, high, low, close, ohlc/4, oh/2, so can you update where I can use RSI, CCI, and another indicator rather than close data.

The great thing about this approach, is we instantly observe the majority are in agreement and that decides which way to place our trade. An Indicator based on the William Alligator, helping to find suitable entry and exit points. The same logic of multiple timeframes can be applied in various time frames including a very short- term to very long term.

This is not the only way to apply the Alligator to trading, as the indicator canpinpoint trend reversal points. For an upward trend, the lips will be situated above the two other lines, while the intersection of the teeth and the jaw lines should be observed. For a downward trend, the lips will be found below the two other lines. The intersection of the teeth and the jaw should also be present. Greetings Colleagues Following some recommendations and ideas I share this moving average, put all of them together The length calculation is automatic there is only one input. The length is inverse so it will wrap from the longest reference point, hence using phi Moving averages will wrap around the price.

Before proceeding, keep in mind that technical indicators are derivates of price . By this, what I mean is indicators are derived from price, and because they are derived from price they do not provide any new piece of information. As such, always use technical indicators as a supplement to price action rather than using them as a substitute to price action.


In this article, we will teach you how to trade in a weekly time frame in the UK. So, whether you are a beginner or an experienced trader, We hope you will find this article helpful. It gives quick signal of buy on dips in an uptrend or sells on rallies in a downtrend. TA Insync combines the best of trend as well as momentum indicators. Comparative Relative Strength compares a security's price change with that of a "base" security. When the Comparative Relative Strength indicator is moving up, it shows that the security is performing better than the base security.

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