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Chaos Gator

Bill Williams named this indicator in his book "New Trading Dimensions". The book touches upon chaos theory, and lets readers debate if the so-called supercomputers were used in developing different trading methods. The majority of readers is sure that the author's systems is an ideal filter and a good start for a short term trading system.

This indicator consists of 3 changing averages based on the Median Price (High+Low/2) for 21, 13 and 8 days, with 8, 5 and 3 days displacement correspondingly. The most used method of explaining a moving average is the comparison of the dependence of the security's price on moving averages of the security's price, and vice versa, or relationship between a few moving averages.