Alligator - Nexus Expansion
Alligator - Nexus Expansion
new release
What Is the Williams Alligator Indicator?
Legendary trader Bill Williams, an early pioneer of market psychology, developed the trend-following Alligator indicator, which follows the premise that financial markets and individual securities trend just 15% to 30% of the time while grinding through sideways ranges the other 70% to 85% of the time. Williams believed that individuals and institutions tend to collect most of their profits during strongly trending periods.1
KEY TAKEAWAYS
- The Williams Alligator indicator is a technical analysis tool that uses smoothed moving averages.
- The indicator uses a smoothed average calculated with a simple moving average (SMA) to start.
- It uses three moving averages, set at five, eight, and 13 periods. The three moving averages comprise the Jaw, Teeth, and Lips of the Alligator.
- The indicator applies convergence-divergence relationships to build trading signals, with the Jaw making the slowest turns and the Lips making the fastest turns.
How the Williams Alligator Indicator Works
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.
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