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Bill Williams' indicators are often used in various trading systems. But they are most effective within the framework of the Profitunity strategy - the author's technique created by the author of these indicators. This system can be applied to any trading assets with high liquidity.
The Profitunity strategy was implemented using two Williams indicators - Fractals and Alligator. These tools are included in the standard MetaTrader 4 library. If these indicators are missing in your trading terminal, you can always download them on our website in the Indicators section.
The author himself did not focus on a specific timeframe, but, as practice shows, the time-tested strategy works best on the H1 timeframe.
Strategy settings
There are no complicated settings in this system. All you need to do is apply both Williams indicators to a trading asset chart on the H1 timeframe with default settings. All Bill Williams instruments in the Metatrader terminal have a separate list tab in the Navigator panel.
Conditions for opening positions
First of all, it is necessary to draw up a list of trading instruments for which speculative transactions will be concluded. For solving this problem, the system uses the Alligator indicator, the dynamics of the lines of which should indicate the absence of a pronounced trend. That is, at the first stage, it is necessary to find assets that are currently in a state of consolidation.
This state is displayed by the Alligator as intertwined lines close to each other and is called "Sleeping Alligator." (You can find a detailed description of the Alligator indicator and its signals in the Indicators section of our website).
In the second stage, in the current zone of the "sleeping alligator," one should highlight the extremes using the Fractals indicator, which shows local price highs and lows in the form of arrows.
Buy and sell trades according to the Profitunity strategy are allowed to be concluded only after the breakout of the last fractal, the closing price of which is above/below the Alligator's lips.
From time to time, a series of similar fractals will appear within the sleeping Alligator. In this case, when looking for buy signals, you should take into account the highest of them, and for selling, it is recommended to focus on the arrow located below all neighboring figures.
Stoploss and TakeProfit
Stoploss is placed 5 points below the lowest fractal from the flat zone (for a buy trade) or 5 points above the highest fractal (for a sell trade) from a flat zone. Take profit is recommended to set two to three times more stop loss.
Conclusion
The Profitunity trading system considered here is simplified since it is focused not on maximizing profits, but on minimizing risks. In a sophisticated version, this system uses the build-up of positions using additional Williams indicators.
