This article introduces you to a trading strategy that doesn’t require volumes, technical indicators, and price patterns. All you need to do is to be attentive to the price action. Welcome to the Imbalance tutorial.
2023-05-26 • Updated
Bill Williams is the creator of the most popular market indicators: Awesome Oscillator, Fractals, Alligator, and Gator.
Most of these indicators are used in the trend market.
Let us present you a new trend strategy based on Williams’ indicators.
Indicators: Williams Alligator and Williams Fractals with the default settings
Rules for a long entry
Wait for the Lips line breaks the Jaws line up
The price breaks the nearest upper fractal resistance.
It is recommended to use the Stop Loss at the level of the nearest local minimum before receiving the signal.
Let’s look at the USDJPY chart. As you may see, the price started rising in February 2023 on the Daily time frame.
Two things happened simultaneously: the Lips line of the Alligator indicator broke the Jaws line up; the price broke the fractal resistance level up and continued rising.
Opening a long position with a Stop Loss lower than the previous local minimum became possible at 134.360. For conservative traders, it would be possible to set Stop Loss slightly lower than the last fractal line, which became a support level.
Rules for a short entry
Wait for the Lips line breaks the Jaws line down.
The price breaks the nearest down fractal support.
It is recommended to use a Stop Loss at the level of the nearest local maximum before receiving the signal.
The same chart of USDJPY made it possible to open short positions at the pair when the price broke the last fractal support line, and then, the Alligator lines confirmed the signal – the Lips line broke the Jaws line at 132.620.
Note that we got the signal from the Alligator indicator later than Williams’ fractals. That’s okay for this strategy too.
The rule of setting a Stop Loss is precisely the same as in the previous time – higher than the local maximum or slightly higher than the resistance fractal line for those who are not too risky.
Rules for a Take Profit
The choice of take-profit is possible based on the ratio 3:1, i.e., a trade should bring 3 points of profit for one lost profit point.
It’s essential to pay attention that the strategy works only in trends. When there is a flat in the market, the strategy may give a lot of false signals.
Trade with FBS using Alligator and Fractals and get a stable income!
How to open an FBS account?
Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to withdraw the money you earned with FBS?
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.