Updated: Dec 15, 2021
Williams alligators are the most effective way to identify Bill Williams's three lines of rising or falling prices. Williams fractal theory requires that all fractals must be measuFractal theory states that all fractals must be measured against a common indicator to assess their validity, the most popular of which is the alligator, which consists of three consistently adjusting averages.
A fractal trading strategy recommends avoiding purchasing a stock or other asset if the fractal is below the alligator's teeth. If the fractal exceeds the alligator's teeth, then the asset should not be sold, but rather held. The main rule of thumb is to never buy or sell until the fractal indicator moves beyond the teeth of the alligator.
Do not worry if this sounds a bit complicated for there are many software packages designed to assist in the understanding of fractals indicators. cTrader is such a software, although MetaTrader4 or MT4 is the most popular fractal indicator.
Bill Williams' fractal theory has been an instrumental boom for the world of trading and will likely be useful for years to come. MT4 is an ideal program for those eager to learn more about fractal theory and possibly apply it to their own country's exchange. Even with a profitable strategy such as fractal theory, there is always an inherent risk, and all investors should be aware of this before entering the market.