There are trillions of dollars exchanging hands everyday in the foreign exchange market. Although it is not likely for any single forex trader to get his hands on these trillions, forex traders all over the world can snap up profitable trades in their own little way. Majority of forex traders actually do not make money and eventually fall out of the trading game. This is because they did not take the time to learn about the market that they are getting into. The forex market is a risky market that should not be entered into without much thought and preparation. Some people would find it to be complicated but there are actually tools today like the Gator Oscillator that can be used in order to make it easier to make sense of market movements.
The Gator Oscillator is one of the more popular forex trading tools used in tandem with other technical analysis models. This charting model developed by Bill Williams makes a visual representation of the differences between the divergence and convergence of highs and lows of price values throughout a specific period. This charting model makes use of moving averages over varying periods of time. When these are plotted in the Gator Oscillator, they form a colored histogram that shows when it is likely to be the best time to snap up profitable trades – in the Gator Oscillator lingo, this time is when the alligator awakens after a long period of sleep. In more technical terms, this indicates the time when some price movements are observed after a period when no trend is being formed. The longer the time during which no price movements are observed, the stronger and more vigorous its trend will be.
Watching the bars change colors on the Gator Oscillator will tell forex traders what the alligator is doing. The forex traders would then be guided as to what action to take on their trades. A sleeping alligator is shown in the Gator Oscillator as a red top and bottom line. Traders should know not to act on their open trades during this time. As one of the bars change from red to green, it is time to validate a possible upcoming trend. Other charting and technical analysis tools should be used in order to validate what trading scenario the oscillator could be presenting.
All these happen could happen within minutes and the forex trader should be ready with his trading strategy in order to snap up the trade at the right time, buying and selling currency pairs during the times when they are likely to be most profitable. It does not take time to learn how to read the Gator Oscillator and to use it with other charting tools. With enough practice, forex traders can have a better feel of the market with this charting and technical analysis tool – forex traders can try this charting tool out with a demo account to test their reading of this Gator bars. Through time, forex traders will not find it difficult to integrate their use of this tool in their trading practices to effectively make profitable trades.