The alligator indicator (How to trade using the alligator indicator for forex)

The alligator indicator is another strategy widely used by forex traders to trade the financial market.

The alligator indicator is used to confirm current price trends and directions the market would move to.

The alligator might look similar to the moving average but it is kind of different in term of use.

The alligator indicator was created by Bill williams. Traders make use of the alligator indicator to enter counter-trend moves.

The alligator indicator makes use of what we call the Jaw, the teeth and the lips. This are the three balance lines.

It is a moving averages that use fractal geometry and nonlinear dynamics.

The jaw, teeth and lips has different work.

•The jaw (The blue line):

This is the balance line for the time frame that was used to build the chart (13 period smoothed moving Average , moved into the future by 8 bars).

•The teeth (The red line):

This is the balance line for the value time frame of one level lower (8-period smoothed moving average, moved into the future by 5 bars).

•The lip (The green line):

This is the balance line for the value time frame, one level lower (5- period smoothed moving average, moved into the future by 3 bars).

The teeth, lips and jaws are the important part of this indicator. They show the interaction of different time periods.

Now let's focus on how the Alligator indicator works:

The alligator does 4 things: It sleep, wakes up, eat and suffers a food coma.

•The alligator sleeping:

When the Jaw, the teeth and the lips are closed, it means the alligator is asleep or going to sleep already.The alligator sleeping would show how hungry it is.

As it sleeps, it gets hungrier and the longer it sleeps the hungrier it becomes.

•The alligator is awake:

Once the alligator is awake from it's sleep,it opens its mouth and yawn really ready to eat.

•The alligator eats:

After the alligator is awake, it is ready to eat. The alligator starts to hunt for the flesh of a bull or flesh of a bear and eat.

•The alligator suffers a food coma:

This is the main time you take your profits. After eaten enough, the alligator starts to lose intrest in the food/price. The balance lines joins together.

How to use:

Alligator default setting:

Jaw period : 5

Teeth period : 5

Lips period : 5

Jaws shift : 7

Teeth shift : 5

Lips shift : 3

Method : smothed

Jaw : blue

Teeth : Red

Lips : Green

BUY

Once the green line crosses above the red line that is a buy. You take your profits once the three line meet again.

SELL

This is the opposite. Once the green line crosses below the red line that is a sell. You take your profits once the three lines meets again.

TIP

The alligator indicator works on all timeframe but it is best utilized/used on the higher time frame.

Komolafe Peter Adedayo

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