Bill Williams Indicators | Chaos Theory


To understand the overall structure of the market B. Williams advised to analyze the market through the following five dimensions:

  • Fractal (phase space)
  • The driving force (energy phase)
  • Acceleration / deceleration (power phase)
  • Zone ( combination of strength / power phase)
  • Balance Line

For understanding and analyzing these dimensions there have been established a number of indicators.

  • AC Indicator - Accelerator Oscillator

    The Accelerator Oscillator is an indicator which fluctuates around a median 0.00 (zero) level which corresponds to a relative balance of the market driving force with the acceleration. Positive values signal a growing bullish trend, while negative values may be qualified as a bearish trend development. The AC indicator changes its direction before any actual trend reversals take place in the market therefore it serves as an early warning sign of probable trend direction changes.

  • Bill Williams Alligator Indicator

    The Alligator is resting when the three averages are twisted together progressing in a narrow range. The more distant the averages become, the sooner the price move will happen.

  • Awesome Oscillator - AO Indicator

    Awesome Oscillator Strategy includes 3 ways of trading.

    1. Open a sell position when the Awesome oscillator is below the zero line forming a peak, and open a buy position when the oscillator is above the zero line forming a gap.
    2. Open a sell position when the Awesome oscillator forms two peaks above the zero line, where the second high is lower than the previous one. And, conversely, traders watch to open a buy position when the oscillator forms to lows below the zero line with the last one not as low as the previous one.
    3. Account crossing the zero line. When the Awesome oscillator crosses it from up to down, it is time to open a sell position and when it crosses from down to up, it is time to open a buy position.

    Awesome Oscillator Trading Strategy

    There are three main signals of Awesome Oscillator which may be seen:

  • Fractals Indicator - Bill Williams' Fractals

    Bill Williams' Fractals are formed around a group of five consecutive bars the first two of which are successively reaching higher (or diving deeper) and the last two descending lower (or growing higher) with the middle one being the highest (or the lowest) result in the group accordingly.

  • Gator Oscillator Explained

    Being an oscillator in the form of two histograms built on either side of the naught line, the Gator Oscillator plots the absolute difference between the Alligator’s Jaw and Teeth (blue and red lines) in the positive area and the absolute difference between the Alligator’s Teeth and Lips (red and green lines) in the negative area. The histogram’s bars are colored green if exceeding the previous bar’s volume or red if falling short.

  • Market Facilitation Index Indicator - Bill Williams MFI

    The absolute values of the Market Facilitation index are represented by the histogram's bars while the comparison of the index and volume dynamics are given in colors which are vital in terms of reading the indicator signs.