Bill Williams’ primary source of income is from his trading profits. He also earns money from book royalties, speaking fees, and his ownership of the Turtle Trading System. By the end of this article, you will have a better understanding of Bill Williams’ net worth and his contributions to the world of trading. Not necessarily, it’s okay to be a risk taker, but you must have self control and be able to follow your own tradingand risk management rules. They like the double down theory and that doesnot work in our methodology!

The Fractals

He loved spending time with his family and enjoyed taking them on trips around the world. He was also a generous philanthropist and donated money to many charities. He grew up in a working-class family and developed an interest in trading at a young age.

• If you like trend trading systems, you should try this method, as it performs great results in any market.
• Williams developed several technical indicators (Accelerator/Decelerator Oscillator, Alligator, Awesome Oscillator, Fractals, Gator Oscillator, and Market Facilitation Index).
• As with any new strategy, make sure you are profitable on a demo account and only then risk real cash.
• His indicators are still widely used by traders globally, and his insights into market psychology are embedded in many modern trading strategies.

However, there are still strategies that are based on the AO tool, such as the Awesome Oscillator Saucer buy signal or Awesome Oscillator Twin Peaks. Bill Williams is credited with the invention of fractals, which have become indispensable assistants for Forex traders. He first used the concept of fractals in his 1995 book, “Trading Chaos,” and it has since become a widely-used tool for stock market analysis and trading.

How to use Fibonacci Retracement to Enter a Trade in the Forex Market

The first SMA is set at five, the second at eight and last at 13. In the chart below, if you are long the EUR/USD pair, you could have placed the stop-loss at the lower side of the down fractal and the take-profit level above the two up fractals. After leaving the military, Williams moved to the United States and began working as a stockbroker. He quickly became successful in the financial markets and eventually started his own trading firm. He quickly developed a successful trading system, which he based on the concept of market fractals.

What Are the Most Common Pitfalls When Using the Alligator Indicator?

On the other hand, opinions have an influence only on some traders, basically weak holders, who I wrote about in the series of lessons about the VSA model. For example, opinions are ideas like “An ordinary trader is helpless against the market-makers”, “Only a privileged group of people knows where the price will go next”, “Trading is a battle”. The strategy uses 8-hour timeframe periods, and the ONNX model is set for 1-day values. So, remember when changing the script to apply 1D Periods to what’s needed. So, in sleep phase, lines tend to be close to each other and move sideways.

Keyboard shortcuts

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.6% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

He is best known for his development of the Williams %R indicator, which is used to identify overbought and oversold conditions in the market. Although Williams is no longer actively trading, he continues to share his insights with traders around the world. It should be red (momentum moving down) because all bullish divergent bars are created while the market is in a down move.

Once the second peak is formed, traders should look for the histogram to move below the zero line to confirm a bearish trend reversal. This is called a bullish twin peak which signals traders to enter into short trades. A bearish twin peak is formed when two consecutive peaks form, but the second peak is smaller than the first, and the red line is closer to the zero line.

The methods can be used in IRA”s Mutual funds, and many of the less risky vehicles. The equity curve shows that this is not a viable trading strategy. We tried the same strategy on other asset classes (S&P 500, Treasury bonds), but with the same conclusion. The bar marked with the red arrow is both the middle finger of the down fractal and the left bar of the up fractal, whose middle finger is the next bar marked Bill williams trader with the green up arrow. Let study the ways to enter the market and protect your position on the example of the same BTCUSD daily chart. Facts, on the contrary, are not numerous and are often less important for traders than opinions.

Bullish or bearish zero line crossover

The oscillator consists of two histograms located at the bottom of the chart. The histogram above the zero line expresses the connection between the jaw and teeth, while the histogram below zero stands for the relationship between teeth and lips. Trading indicators are helpful little helpers of any trader out there. Depending on your requirements, different indicators are capable of measuring and predicting trends, volatility, momentum and volume.

• Yes, this is a vital part of success, you must follow a risk strategy.
• This article was written by a user of the site and reflects their personal views.
• Bill Williams had a psychology and engineering degree that helped him build a better understanding behind the behaviors of the market.

It is a breakout of the market after the market has reversed direction as first indicated by the bullish/bearish bar. If this Fractal signal is our third entry, we should have built up some open equity in our first two entries, as it confirms that our identification of a change in trend is valid. The red zone in the chart marks the Alligator sleeping for a long time while there is a sideways trend. So, the big idea is to stay out of the market when the Alligator is sleeping and to be in the market when the Alligator is awake and hungry.

When used with the moving averages, you can look for divergence between the forex prices and William’s %R. When the price is making higher highs, but the Williams %R is making lower highs, it is a sign of a bearish reversal. On the other hand, when the price is making lower lows, but the Williams %R is making higher lows, it is a sign of a bullish reversal. Moving averages confirm the trend direction and help traders trade the reversals. When the Moving Average is sloping upward, it confirms a bullish divergence, and when it is sloping downward, it confirms a bearish divergence. The Acceleration/Deceleration (AC) Oscillator is another technical analysis tool developed by Bill Williams, and it is often used in conjunction with the Awesome Oscillator (AO).

That way, if the bar is higher than the preceding one, it will appear green and if it was lower, it’ll be red. Williams himself referred to the Alligator indicator as the compass that helps a trader remain moving in the same direction. This indicator works mostly by helping to see the actual trends and avoid trading within a range, which according to Bill Williams, significantly minimize your losses. Williams’ methods are based on psychology, as he was educated in Engineering Physics and Psychology. He emphasizes the behavioral aspect of financial trading and says that the market will never be fully known.

In this case, the down fractal is usually a bullish sign while the up fractal is a bearish sign. This happens because the down fractal is usually followed by a bullish sign while an up fractal is usually bearish. Bill Williams has invested his wealth in a variety of businesses, including the Turtle Trading System, a trading education company.