Bill Williams

  • If we have used the Metatrader trading platform, then we must have seen a series of technical indicators under the Bill Williams label on the Insert Indicators menu.

    There are six technical indicators that are labeled because they are both created and developed by a trading expert and psychologist named Bill Williams. Who is Bill Williams and how does his story develop so many technical indicators? In this article, we will get the answer


    Who is Bill Williams?

    Bill Williams was born in 1932 in the United States. In college, he studied various fields of study, thus pocketing a bachelor's degree in Engineering Physics and a doctoral degree in Psychology.

    From the Psychology study, he then chose to explore more aspects of behavior in trading on financial markets, rather than fundamental aspects.

    In addition, Bill Williams includes traders who suggest that traders act in harmony with the market, based on the assumption that movements in the market are often not objective, but rather represent market perceptions of the value of an asset.

    In accordance with this understanding, he became a Trend-Trader, although he also often sought the best entry point for counter-trends when a trend had gone too far.

    The name Bill Williams became popular in the 1990s because of the success of the strategies he told in the Chaos Trading book series and educational programs through the Profitunity Trading Group which was then managed by his daughter, Justine Williams.

    Throughout his career, he has delivered seminars and education in more than 60 countries and is often discussed together with figures such as Larry Williams and Jake Bernstein.

    In his best-selling books, he not only conveys his thoughts about trading, but also introduces technical indicators that have been made, so that they can be used by traders of stocks, commodities, and forex, until now.


    The Concept of Chaos Theory Bill William

    Bill William is a technical / chartist expert who develops the concept of Chaos Theory and the special effects that occur in the market \ which are then known as non-linear dynamic theories.

    Dynamic non-linear is describing the behavior of certain market price movements that might indicate dynamics that are very sensitive to the initial conditions. each analyst can only think of the cause of price movements. because none of the technical or fundamental analysts are able to explain with certainty, based on the decision whether the holders of the majority of market volume determine the direction of the transaction

    The theory of bill will then be applied to the trading system which is then known as the "PROFITUNITY SYSTEM". The Profitunity system created by Mr.Williams is recognized by trader traders as a trading system that is parallel to the Western Trading System or Japenese Candlestick which has been known for hundreds of years.

    Where to say the market (including the forex market) has a messy structure, like the movement of a butterfly wing that moves randomly, in fact, the butterfly wing only moves up or down, but when the wing moves it is actually not synchronous or messy; between one wing and the other it moves out of sync, as well as in the forex market.

    According to Bill Williams, we can benefit from the market if we understand the market structure where we must pay attention to what is called "dimensions". where there are 5 dimensions in the market that need attention. In addition, Bill William also has a compass unit applied in the market, the compass is an ALLIGATOR.


    Technical Indicator by Bill Williams

    There are six of the most popular technical indicators among all of Bill Williams' works, namely Accelerator Oscillator, Alligator, Awesome Oscillator, Fractals, Gator Oscillator, and Market Facilitation Index.

    1. Alligator

    This Overlay type Alligator indicator may be the most famous discovery of Bill Williams.

    The Alligator consists of three Moving Averages with different parameters whose applications are forwarded several bars forward to help traders capture the benefits of the ongoing trend

    2. Gator Oscillator

    Gator Oscillator is an Oscillator type technical indicator derived from the Alligator. The form is in the form of a two-color histogram that can be elongated and shortened, depending on whether the dominant trend in the market is bullish (green) or bearish (red); and whether new trends are beginning to change, have been formed, or will change again 

    3. Awesome Oscillator (AO)

    Made by Bill Williams, also often called the AO indicator, uses two Simple Moving Average lines as basic inputs. Its function is to guide traders to identify the direction of the trend and anticipate the possibility of a price reversal

    4. Accelerator Oscillator

    Accelerator Oscillator is a further development of Awesome Oscillator. Precisely, oscillations are calculated from the Awesome Oscillator level minus the MA-5 from the Awesome Oscillator itself. Its function is intended as a kind of early warning signal to inform traders of market momentum changes.

    5. Fractals

    Fractals are based on Bill Williams' opinion that prices formed on financial markets are a collection of individual behaviors with the same patterns, so traders need tools to understand these behaviors. Therefore, Fractal formation marks the lowest level or the highest level that is important to the market and strives to be as easy as possible

    6. Market Facilitation Index (MFI)

    MFI measures price changes per tick and compiles collected data in the form of histograms below the price graph. The color of the histogram changes depending on whether the MFI is up or down, and is combined with whether the tick volume rises or falls. If both of them rise together, it means indicating the continuation of the trend; and vice versa. Bill Williams suggested that MFI is used together with Fractal.

    Are all indicators used by Bill Williams? Yes, of course. However, he did not use the six indicators simultaneously. Indicators are not the most important point in the strategy that is implemented.

    We can also use each indicator separately, according to the combination suggested by it, or not even use the indicators it made at all.

    The most important thing, according to Bill Williams in an interview, is to have a certain approach to trading and understanding the market, then using it consistently.

    So, just having a particular trading system is not enough, because it must be accompanied by the application of self-discipline and spaciousness to accept the fact that loss can occur at any time, so it is not easy to change the system only after several losses.