What Time Frame to Use with the Williams Alligator: All You Need to Know
Williams Alligator can be defined as one of the most useful indicators in trend analysis. The Williams Alligator consists of three moving averages, known as the Jaw, the Teeth, and the Lips of the Alligator, conceived by Bill Williams. With the help of these moving averages, traders will know whether the market is on a trend or it is in a flat market.
As one can already expect, one of the most frequently asked questions is: “In what time frame should I use the Williams Alligator?” We will answer this question in more detail, examining the varying time frames and their effect on our timetables.
Analyzing the Williams Alligator Indicator
But before discussing the appropriate time frames, let’s first understand what the Williams Alligator indicator is and how it can be used.
Jaw (Blue Line):This is defined as the 8-Z period displacement of the 13-period Smoothed Moving Average.
Teeth (Red Line): The Other is an 8-period smoothed moving average that shifts 5 bars into the future.
Lips (Green Line): This is a 5-period dutch moving average shifted forwards by 3 bars.
These three aspects interpenetrate one another in order to give the overall picture of the market or if it is trading within a range. When the Teeth, Jaw, and Lips are curled inwards, it means the Alligator is hibernating, that is, there is range-bound movement without any trend formation. Any time these sharks’ lines spread apart and start running in the same direction, it means the Alligator is no longer sleeping, rather eyes are wide open and all attention is set on the action as a trend is in place.
Selecting the Right Time Frame
The time frame that you choose for your trades involving the Williams Alligator token is equally very important when it comes to the results of such trades. The Williams Alligator is depicted below within the certain time frames considered.
1. Short-term time Frams (1 minute to 15 minutes charts)
Short-term time frames are the most popular time frames used by most scalpers and day traders. The intention of these sorts of traders is to look for opportunities where they can rapidly jump in and out of the market, and in some cases after a couple of minutes close some of the opened positions.
Advantages:
Quick Opportunities: A trading day is likely to be very productive in terms of available Short-term time frames.
Stricter Stop Losses: Owing to the short time duration, the traders are able to apply strict stop losses in order to reduce the risk.
Deficiencies:
Market Noise: The lower the time frame the bigger the noise which therefore means getting more number of trends that are actually false.
High Stress: Most probably the most taxing would have to be trading on short-term time frames as this would mean looking at the chart all the time.
Williams Alligator on Short-Term Time Frames:
For short time periods, the Williams Alligator would help in spotting short trends for successful traders. These signals however may not be as effective as most of the noise is slightly increased. Such traders have to be quick and in a rush with the alligator as there isn’t any time to waste, but still a lot of other indicators have to be included to support its signals and nothing else will be needed.
2. Medium Term Time Frames (1 to 4 Hours Time Frames)
Swing traders who hold their trades for hours to days usually take advantage of medium time frames which they are used to and make good use of it. Medium-term time frames fill this space of busy day trading routine and longer position trading time frames.
Advantages:
Reduced Noise: And medium time frames are a good solace to this problem because they capture time frames with less noise than shorter time frames when there are apparent trend directions such as buyers and sellers.
Balanced Trading Opportunities: These time frames give allowance for enough time to be able to have adequate trading opportunities without the need to all the time, be glued to the charts.
Disadvantages:
Longer Hold Times: These traders will not be able to avoid taking any overnight positions due to factors because they will need to sit on some bulls or bears in case the next day’s price action is going to be a lot worse or a lot better than where these trades actually are performed intraday for at least the majority of the portion.
Williams Alligator on the Medium-Term Time Frames: It enjoys a good performance on the medium-term timeframes where the noise is less thus better trend signals are obtained. This helps the traders follow the signals of the Alligator so well since they do not have to sit all the time waiting for the changes in the market. This group consists of clients who want to take the larger moves in the price while avoiding the very active session of day trading.
3. Long-term time investment in the Time Frames (Daily To Weekly Charts)
Long–term time frames are those used in holding positions earned by position traders and investors. These traders are in possession of a broader context rather than worrying about the price movements in a couple of hours or a few days.
Advantages:
Tendencies: One of the time frames, almost with no noise, places the most correct picture of the trends within the market.
Reduction of Trading Frequency: Greater targets of achievement are laid down since the active individuals only occur after long intervals and non activity periods become common.
Disadvantages:
Patience Required: It is not an easy task to hold the position for a long-term period, which implies that the trader needs a lot of patience most especially in the middle to avoid reactive classrooms.
Bigger Stop Losses: This implies better safety of the traders in such situations since there is usually a larger stop in long term trading, which is normally a trade-off amis.
Williams Alligator on the Long Term Time Periods:
Long-term time frames quickly help in identifying the major trends with the help of the Williams Alligator. The second advantage is the use of the signals is effective as the traders are able to use the Alligator to hang on to the trends for a long time. This period is particularly good for those who do not want to spend much time.
Combination of Time Frames for over achievement
Multi-Time Frame Analysis appeals to the traders due to the positive response thus obtained. This method which is called the multi-time frame analysis is studying of more than one time frame in order to attempt a clearer picture.
Top-Down Analysis: You have to look at the higher time frame first in order to understand the general trend of the market and then look up on a lower time frame to see best places where you would come in and go out of the market.
Confirmation: The third process consists of trend confirmation whereby it is emphasized that the Alligator should be employed on the high time frame to confirm the trend range before time frame is shortened so that the trader can get in the market with Alligator to stagger when the trend is still hot.
For example, when the alligator is represented on daily basis as in uptrend, you turn to one-hour chart, to accurately place yourself to the direction of the alligator.
Conclusion
The decision of time frame to apply Williams Alligator appears to have more to do with the trading style employed and the objectives set. If one relies more on day trading or scalping strategies, it would be best to rely on lowest time frames such as 1 minute – 15 minutes custodians but be careful not to be overwhelmed with noise. Swing traders would arm themselves with medium term time frames such as 1hr to 4hr charts that combine well favorable signal reliability with an even greater number of trades possible. But, in the case of position traders and probably long-term investors charts which are daily and/or weekly based will be most useful as this will help them to concentrate on the development of trends with the aid of Williams Alligator.
However, regardless of the time frame selected, it would be wise to first use the Williams Alligator in a demo for some time. This enables one to get used to how well it operates in various time frames and even come up with a working trading plan.
No matter what, it is widely accepted that such tools will enhance the level of an individual’s trading experience, more so to the Williams Alligator, given a comprehensible appreciation of when to apply different timeframes of the timeline.
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