Bill Williams Fractal Entries Filtered by the Alligator
Summary
The strategy combines five-bar fractals with the Alligator’s Teeth to identify breakout entries. A buy fractal is a local high with two lower highs on either side; a sell fractal is a local low with two higher lows on either side. When a buy fractal forms above the Teeth, it places a buy stop one pip above the fractal bar’s high; when a sell fractal forms below the Teeth, it places a sell stop one pip below the bar’s low. A newer fractal in the same direction cancels the earlier pending order, and a fractal ceases to matter once triggered.
Exits use several proposed stop methods: a close across the Teeth, the Alligator’s Lips in faster markets, a stop after five consecutive bars in a colored zone, or an opposite signal. The document attributes an estimate of capturing at least 80% of a trend’s movement to Bill Williams, but supplies no supporting test. It omits detailed execution rules and evidence of profitability.
Key ideas
- The system defines buy and sell fractals as five-bar local extremes.
- It filters fractals by their position relative to the Alligator’s Teeth.
- Pending stop orders sit one pip beyond the fractal bar’s extreme.
- A new same-direction fractal cancels the previous pending order.
- Exits may use Alligator lines, a five-bar zone condition, or an opposite signal.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.