The Hidden Trading Duo: Williams Alligator + Broadening Formation

Are You Ignoring This Hidden Market Indicator Combo?

Picture this: You’re on a safari, trying to predict the movement of a deadly alligator. Just when you think it’s asleep, it snaps its jaws and surprises everyone. That’s exactly how the Williams Alligator works in Forex. Add a Broadening Formation, and suddenly, you’ve got the ultimate sniper scope for market chaos. But most traders overlook this powerful combo—until now.

Williams Alligator: The Market’s Sleeping Predator

Developed by Bill Williams, the Williams Alligator is a trend-following indicator that uses three smoothed moving averages:

• Jaw (Blue Line) – The slowest-moving line, representing the long-term trend.
• Teeth (Red Line) – The medium-speed line, acting as a confirmation signal.
• Lips (Green Line) – The fastest line, signaling entry and exit points.

When the alligator sleeps (lines tangled), the market is ranging. When it wakes up (lines separate), the trend is active. But here’s where most traders miss the real magic: the Alligator is deadly when paired with Broadening Formations.

Broadening Formation: Where Most Traders Get Wrecked

If you’ve ever traded inside a Broadening Formation, you know it feels like watching a toddler with a sugar rush—wild, unpredictable, and full of head fakes. This pattern, characterized by higher highs and lower lows, traps both bulls and bears before spitting them out with zero mercy.

Why does this happen?

1. Market Indecision: Buyers and sellers battle it out with extreme price swings.
2. Institutional Games: Smart money shakes out retail traders before the real move.
3. Retail Trader FOMO: Traders chase price action in both directions, fueling volatility.

The problem? Most traders try to predict breakouts instead of waiting for confirmation.

How to Combine Williams Alligator with Broadening Formation for Maximum Precision

Now, here’s the secret sauce: Use the Williams Alligator to time breakouts within the Broadening Formation.

Step 1: Identify the Broadening Formation

• Look for a series of higher highs and lower lows on the chart.
• Confirm with volume spikes at each extreme—this signals institutional activity.

Step 2: Observe the Williams Alligator’s Wake-Up Call

• If the alligator is “asleep” (lines tangled) inside the formation, it’s a fake move.
• If the alligator “wakes up” (lines separate) after touching a Broadening Formation boundary, you’ve got a high-probability breakout setup.

Step 3: Enter With Precision

• Long Trade: Wait for the price to break above the upper boundary, with the Alligator’s lips (green) crossing above teeth (red).
• Short Trade: Wait for price to break below the lower boundary, with the Alligator’s lips (green) crossing below the teeth (red).

Step 4: Set Stop Loss Like a Pro

• Place stops just inside the Broadening Formation boundary, since price loves to retest before the real move.
• For extra security, wait for a retest before pulling the trigger.

Step 5: Ride the Trend Like a Smart Money Insider

• Trail your stop below the Alligator’s teeth (red line) in an uptrend.
• Trail above the teeth (red line) in a downtrend.

Why This Works (And Why Most Traders Get It Wrong)

Most traders try to predict breakouts without confirmation. But by waiting for the Alligator to confirm momentum, you avoid false breakouts and only enter when big money is ready to move.

Quick Recap:

✔ Broadening Formations create fake breakouts that wreck traders.

✔ The Williams Alligator times real breakouts with high accuracy.

✔ Combining the two filters out noise and gives sniper-like precision.

✔ Use proper stop losses to avoid whipsaw movements.

Final Words: Want More Advanced Tactics?

Most traders never learn this technique. But now that you have, it’s time to take your trading to the next level.

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• Automate smarter trades: Smart Trading Tool

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Image Credits: Cover image at the top is AI-generated