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Alligator indicator pdf

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Alligator Indicator Settings The Alligator indicator is created with three moving averages. These are simple moving averages set to five, eight, and 13 periods. These three moving averages 11/07/ · Alligator Indicator Trading Strategy Pdf Forex admin · July 11, CC0/Tumisu/Pixabay The forex (foreign exchange) market seems very opaque to the beginner The indicator includes , 8- and 5-period smoothed moving averages each with its own displacement (8, 5 and 3 bars respectively) which are colored blue, red and green thus ... read more

They vary based on their reputation in the market, the size of the brokerage firm, as well as the trading conditions they give you. For example, you will want to compare the margin requirements and leverage conditions that different brokers give. Some forex brokers will give you leverage of as much as while others will only allow leverage of This is attractive since leverage can make your successful trades more profitable.

You should be careful with leverage, however, because a small move against your position can wipe out your margin entirely and lose you trading capital. What you should not do is deploy a random mix of strategies, or, even worse, trade with no strategy at all. It is important to know that different strategies will work unevenly for different traders.

Largely, it comes down to choosing a strategy that you can work well with based on your personality type and trading discipline. In general, the more disciplined you are with implementing a profitable strategy, the more money you will make in the forex markets.

In forex trading, backtesting means running your strategy on historical forex data covering a considerable period of real-world trading events. Popular time spans for backtesting include 10 years, 30 years, and 50 years. Williams believed that individuals and institutions tend to collect most of their profits during strongly trending periods.

The Alligator indicator uses three smoothed moving averages, set at five, eight, and 13 periods, which are all Fibonacci numbers. The initial smoothed average is calculated with a simple moving average SMA , adding additional smoothed averages that slow down indicator turns.

Simple moving average SMA :. How the indicator is calculated is important for understanding the inner workings of the indicator. Luckily, the calculation is not required in practice. The Alligator indicator can be added to your charts from the indicator list in your charting or trading platform. The three moving averages comprise the Jaw, Teeth, and Lips of the Alligator, opening, and closing in reaction to evolving trends and trading ranges:. Williams invoked barnyard imagery to describe the indicator, noting "even a blind chicken will find its corn if it is always fed at the same time … it took us years but we have produced an indicator that lets us always keep our powder dry until we reach the blind chicken's market.

The indicator applies convergence-divergence relationships to build trading signals , with the Jaw making the slowest turns and the Lips making the fastest turns. The Lips crossing down through the other lines signals a short sale opportunity while crossing upward signals a buying opportunity.

Williams refers to the downward cross as the alligator "sleeping" and the upward cross as the alligator "awakening. The three lines stretched apart and moving higher or lower denote trending periods in which long or short positions should be maintained and managed. This is referred to as the alligator "eating with mouth wide open. This indicates the alligator is "sated.

The indicator will flash false positives when the three lines are crisscrossing each other repeatedly, due to choppy market conditions. According to Williams, the alligator is "sleeping" at this time. Remains on the sidelines until it wakes up again. This exposes a significant drawback of the indicator because many awakening signals within large ranges will fail, triggering whipsaws.

Meta, formerly Facebook, META has an alligator "awakening" signal near the bottom left of the chart, then embarks on a strong uptrend that shows an alligator "eating with open mouth" phase. On the rise, the price drops to the Jawline, but the indicators do not cross each other. The trend remains up. An alligator "sated" sell signal arrives when the Lips cross below the Teeth and Jawlines and lines intertwine as the price moves sideways.

The alligator "sleeps" for some time before a new awakening signal goes off, and the uptrend commences with another "eating with an open mouth" phase. The price continues to rise but in a weak fashion. Then there is a sell-off and the mouth opens to the downside, signaling a downtrend. The lines cross again, signaling that the alligator is "sated. The Alligator indicator can be used in any market or time frame.

Sometimes, traders tend to use an oscillator as well alongside the Alligator indicator in order to filter the signals even better. Some of the commonly used oscillators include the Stochastics oscillator or the CCI index.

The three converging smoothed moving average basically forms when the markets exhibit low volatility. One of the benefits of trading with the Alligator indicator is that it allows traders to capture trends very comfortably. It also allows you to stay with the trend.

One can draw some similarity between the way the Alligator indicator and the Bollinger bands work. For example, with the Bollinger bands, you know that when the bands contract, they will soon expand, and prices snap out from the narrow trend.

With the Alligator, a similar concept is realized when the Alligator sleeps. As a result, the longer the Alligator sleeps, the higher the chances that a breakout will occur leading to a new trend being established. The Alligator indicator is used to understand the trending and ranging markets as well. These can be summarized as follows:. The chart below shows the different phases in the market. The rectangle box shows the area when the markets are ranging.

You can see how closely the three different lines are entwined. This simply marks the area when the Alligator indicator is sleeping.

This happens as prices tend to move in a range seldom making any breakouts. However, the appearance of this ranging markets suggests that price is preparing for some kind of a trend that will be established. Right after the Alligator sleeps, you can see that it wakes up. This is seen by the three smoothed moving averages diverging. Notice that the Alligator feeds for the whole time the trend is strong.

After prices reach the top end of the uptrend, you can see that they promptly reversed direction. Here, for a brief period, the Alligator sleeps but wakes up soon enough to feed on the new downtrend that has been forming.

Using the above illustration, we can deduce that the Alligator indicator allows traders to prepare for the upcoming market movements. As and when price action rises to test one of the three moving average lines, you can expect to see the trend being maintained. The Alligator indicator allows traders to trade both the ranging and the trending markets. However, it is more recommended to trade the trends rather than the ranges because profits can be easily built up in a trending market.

The ranging markets depicted by the sleeping Alligator suggests periods where traders can stay away from the markets and avoid taking undue risk. One can of course, use other additional indicators in order to further filter the trends. You can also combine the Alligator indicator with price action-based techniques such as trend lines and horizontal support and resistance levels. The next chart illustrates how to use the Alligator indicator with price action-based techniques.

In the above chart, you can see that we have both the horizontal support and resistance levels and trend lines plotted on the chart. You can see for example when the trend line is plotted, price continues to move higher. This is depicted by the widening smoothed moving averages. As long as the Alligator is awake, the trend is held steady. But once price nears the end of the trend, you can see that the Alligator starts to sleep. Another example from the above chart is the support and resistance levels.

For example, after the support level was established, you can see the strong trend that pushed prices to the next resistance level. This move, from the support to the resistance area has been strong and with the Alligator wide awake, you can get extra confidence that the markets are maintaining a strong trend.

This is available also on the MT4 trading platform which is widely used.

The famous trader Bill Williams was one of the first traders to explore market psychology and trend following. He also created some of the most popular indicators still used to this day. NOTE: You can get your free alligator indicator trading strategy PDF below. He also thought the markets spend far more time trading sideways and in range patterns. The alligator was designed to show when the price is in a trend or a sideways range pattern.

It does this by using three moving averages that cross over each other. The Alligator indicator is created with three moving averages. These are simple moving averages set to five, eight, and 13 periods. Once the alligator indicator is added to your chart, you will start to see these moving averages and how they either come together or begin to widen depending on if the price is trending or in a range.

When you have the alligator indicator on your chart, you will start to see how the jaw, lips, and teeth work together. You can use this information to find new trades and manage your existing trades.

The most common way the alligator indicator is used is to identify whether the price is in a range or a trend. You can also use it to see just how strong a trend is, either higher lower. As the example chart shows below, the jaw, lips, and teeth are constantly moving in line with the price action. The easiest way to use the alligator indicator is to look at the jaw, teeth, and lips.

When the moving averages are close together or intertwined, it is thought that the alligator is asleep. This usually is when the price is in a range period. This usually is when you would avoid taking new positions with this indicator. When the moving averages start to move in one direction, either higher or lower, and the moving averages begin to widen, the alligator is awake and feeding. This is also when new trends are playing out. When the moving averages start to move back closer together, it is thought the alligator is full and has stopped eating.

This is often when you could look to close any existing trades until the alligator wakes up again. As discussed, the easiest way to trade the alligator indicator is to closely watch what the alligator is doing and whether it is feeding or sleeping. When the lines move closer together or start intertwining, it is often an excellent time to close out any open trades.

This is also when you would be watching rather than opening new positions. In the chart example below, the alligator sleeps when the three moving averages come close together and start moving sideways. Straight after this sideways movement, the alligator wakes up, and the indicator starts moving higher. This would be when you begin to look for long trades.

When the alligator lines start to cross back lower, you could take any profits you made from the move higher. These include using other technical analysis and chart patterns. For example, if you see the alligator start to trend higher, you could find long trades. You could do this by using other chart patterns and technical information. You could use these chart patterns to confirm long trades for higher probability entries.

You could also use other indicators with the alligator. These include the MACD, RSI, or any of your other favorite indicators. While the alligator indicator is a super simple indicator to use, it is essential you test it first in your trading. Like any new indicator, the best thing you can do is test it in free demo charts using virtual money. NOTE: You can get the best free charts and broker for these strategies here.

Once you are comfortable and happy with how it works, you could then incorporate it into your live trading. Enter your name and email below to get your free PDF. One of these indicators is the Alligator indicator.

In this post, we go through the alligator indicator and how you can use it in your trading. Table of Contents. Stock Markets Guides. Get Your Free PDF Alligator Indicator Trading. Get Free PDF Now.

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11/07/ · Alligator Indicator Trading Strategy Pdf Forex admin · July 11, CC0/Tumisu/Pixabay The forex (foreign exchange) market seems very opaque to the beginner The indicator includes , 8- and 5-period smoothed moving averages each with its own displacement (8, 5 and 3 bars respectively) which are colored blue, red and green thus Alligator Indicator Settings The Alligator indicator is created with three moving averages. These are simple moving averages set to five, eight, and 13 periods. These three moving averages ... read more

While the alligator indicator is a super simple indicator to use, it is essential you test it first in your trading. Home Systems Strategies Analysis Signals Autotrading Testimonials Special Offer New!!! May 20, at am Reply. Some forex brokers will give you leverage of as much as while others will only allow leverage of Company News Markets News Cryptocurrency News Personal Finance News Economic News Government News.

It can get a bit complex, but this multi-time frame approach can help you understand the intricate details of the trends that are formed. It is important to know that different strategies will work unevenly for different traders. Technical Analysis, alligator indicator pdf. He is also an analyst and has done some extensive research in the markets. The chart below shows the different phases in the market. Alligator indicator pdf how your comment data is processed. Technical Analysis Basic Education ADX: The Trend Strength Indicator.

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