The Alligator Indicator, developed by legendary trader Bill Williams, is a technical analysis tool that helps traders identify the presence of a trend and its direction. The indicator is composed of three moving averages (MA), which are lagging indicators that can be used to gauge momentum and determine potential areas of support and resistance.  To help you understand the indicator. I am going to use the Olymp trade.

How to find and set Alligator Indicator on Olymp Trade?

Puede comenzar con el indicador en ambos Olymp Trade real and demo accounts. Lo primero que debe hacer es iniciar sesión en su cuenta. y haga clic en el cuadro indicador => A continuación, haga clic en la pestaña popular => Buscar y seleccionar cocodrilo williams de la lista.

What is Williams Alligator Indicator?

The Alligator Indicator is a technical analysis tool developed by legendary trader Bill Williams that helps traders identify the presence and direction of a trend in the market. It consists of three components: the Balance Line (BL), Jaw (JW), and Teeth (TS). The BL is formed by calculating a Smoothed Moving Average (SMA) over a 13-period timeframe and shifting it 8 periods into the future. The JW is obtained by calculating an SMA over an 8-period timeframe and shifting it 5 periods into the future. Finally, the TS is calculated using a 5-period SMA shifted 3 periods into the future.

These three lines are designed to help traders identify different types of market trends, such as uptrends, downtrends, and consolidation phases. When all three lines are moving away from each other in a fan-like pattern, this usually indicates an uptrend or bullish sentiment in the market. Conversely, when all three lines are converging towards each other, it typically signals a downtrend or bearish sentiment in the market. During times when none of these patterns is present and all three lines remain flat for an extended period of time, this can signal a period of consolidation where traders should be cautious about taking any positions in either direction until further confirmation signals arise.

Alligator Indicator Calculation

The Alligator Indicator is calculated by combining three moving averages (MA) into one indicator. The first line, called the Balance Line, is created by taking a 13-period Smoothed Moving Average (SMA) and shifting it 8 periods into the future. The second line, called the Jaw (JW), is calculated by taking an 8-period SMA and shifting it 5 periods into the future. Finally, the third line, called the Teeth (TS), is obtained by taking a 5-period SMA and shifting it 3 periods into the future.

How to read Williams Alligator Indicator on Olymp trade chart

El indicador está formado por tres líneas simples de promedio móvil Mandíbula, dientes, labios. Aquí, The Jaw es una línea azul hecha de 13 SMA y 8 bar. Los dientes son una línea roja hecha de 8 SMA y 5 barras. Lo último son los labios, que es un color verde hecho de 5 SMA y 3 barras. Aquí, los labios son la línea más rápida y la Mandíbula es la más lenta. Estas tres líneas forman cintas alrededor del precio que crean señales de compra y venta.

Identificando la tendencia bajista

When the three intersect each other and you find the blue followed by the red line and then the green line. This is the ideal scenario for a downtrend. the trend will be considered even stronger if there is a big gap between these lines.

Identificando la tendencia alcista

Cuando las tres líneas se cruzan entre sí y encuentras la línea verde en la parte superior siguiendo a la línea roja y la línea azul es el escenario ideal para una tendencia bajista. Puede pujar aún más fuerte si hay una gran brecha entre estas tres líneas.

Ultimas palabras

Overall, Alligator Indicator can be an effective tool for traders to use when assessing overall market conditions and determining potential areas for entry or exit points within their trades. It also can be used as part of a larger trading strategy along with other indicators such as MACD or RSI to validate any possible trading signals that may appear on their charts. In addition to helping traders identify different types of trends in the market, Alligator Indicators can also be used for other purposes such as determining potential entry or exit points for trades as well as confirming existing positions through additional analysis with other indicators like MACD or RSI. By combining multiple technical indicators together using different calculations and parameters, traders can gain deeper insight into potential trading opportunities and make more informed decisions when entering or exiting their positions accordingly.

Acaba de aprender el indicador Alligator y ahora ha entendido lo fácil que es operar con este indicador y lo poderoso que es este indicador. Puede utilizar un confirmador de tendencia para obtener mejores resultados. Le sugiero encarecidamente que combine este indicador con otros indicadores para confirmar la tendencia en la cuenta demo de Olymp Trade y verifique cómo funciona la combinación. Si tiene algún problema para encontrar el indicador de confirmación correcto, comente o contácteme. Te ayudaré. Hasta entonces lo mejor y te deseo una carrera exitosa 🙂