How to Trade Morning Star and Evening Star Patterns
This article will focus on two of the most reliable reversal candlestick patterns traders use: the Morning Star and the Evening Star.
Williams’ Strategy
2023-05-26 • Updated
Bill Williams is the creator of the most popular market indicators: Awesome Oscillator, Fractals, Alligator, and Gator.
Most of these indicators are used in the trend market.
Let us present you a new trend strategy based on Williams’ indicators.
Strategy setups
Instruments: any
Indicators: Williams Alligator and Williams Fractals with the default settings
Timeframe: >30M
Rules for a long entry
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Wait for the Lips line breaks the Jaws line up
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The price breaks the nearest upper fractal resistance.
It is recommended to use the Stop Loss at the level of the nearest local minimum before receiving the signal.
Let’s look at the USDJPY chart. As you may see, the price started rising in February 2023 on the Daily time frame.
Two things happened simultaneously: the Lips line of the Alligator indicator broke the Jaws line up; the price broke the fractal resistance level up and continued rising.
Opening a long position with a Stop Loss lower than the previous local minimum became possible at 134.360. For conservative traders, it would be possible to set Stop Loss slightly lower than the last fractal line, which became a support level.
Rules for a short entry
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Wait for the Lips line breaks the Jaws line down.
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The price breaks the nearest down fractal support.
It is recommended to use a Stop Loss at the level of the nearest local maximum before receiving the signal.
The same chart of USDJPY made it possible to open short positions at the pair when the price broke the last fractal support line, and then, the Alligator lines confirmed the signal – the Lips line broke the Jaws line at 132.620.
Note that we got the signal from the Alligator indicator later than Williams’ fractals. That’s okay for this strategy too.
The rule of setting a Stop Loss is precisely the same as in the previous time – higher than the local maximum or slightly higher than the resistance fractal line for those who are not too risky.
Rules for a Take Profit
The choice of take-profit is possible based on the ratio 3:1, i.e., a trade should bring 3 points of profit for one lost profit point.
Important Remarks
It’s essential to pay attention that the strategy works only in trends. When there is a flat in the market, the strategy may give a lot of false signals.
Trade with FBS using Alligator and Fractals and get a stable income!
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The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
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Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
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How to start trading?
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