Tuesday, October 29th, 2013 by Tim Lanoue
Trading online is no easy task and as binary options traders we strive for perfection and to increase our winning percentage. Accomplishing this task though is no easy feat, it takes dedication and consistency. It takes knowing the right indicators and the right strategies to help achieve success in the online trading world. Which is why today we are going to cover the basics of the William Alligator indicator.
This indicator is known as an alligator indicator because it visually represents the jaw of the alligator. The indicator is composed of three lines as seen in the picture below. The blue line is known as the “jaw” of the alligator, it is usually the line on the top. The red line is known as the “teeth” of the alligator because it is between the jaw and the lips of the alligator. Lastly, you have the blue line that represents the “lips” of the alligator. The William Alligator indicator is metaphoric because it represents the mouth of an alligator.
If you are unsure where you could find this indicator you can go to FreeStockCharts.com where the indicator will be preset and ready to use. Diving a little further the function of the alligator indicator is to help a trader confirm the direction of an assets trend. In addition, the lines of the indicator act as a means of measuring the assets momentum which is beneficial when trend trading. The indicator is made up of three moving averages which make up the jaw, teeth and lip of the alligator. The jaw of the alligator has a moving average period of 13 and is mostly commonly seen to curve and expand in the presence of a strong uptrend. The teeth of the alligator has a moving average of 8 which acts as the average between the jaw and lip of the alligator. Lastly, the lips of the alligator acts as the low average of the indicator with a moving average of 5. Oftentimes this line will twist and cross the other two lines in the case of the strong uptrend, however, if there is a strong downtrend in progress then the line is more likely to expand downward.
The William Alligator indicator is a unique indicator that is excellent to use in combination with other indicators like the Aroon Oscillator. The indicator is composed of three moving average lines that make up the jaw, teeth and lips of the alligator. Stay tuned for my next article on how to use the William Alligator indicator for trading online!