Purpose of the indicator the Alligator as the making element of the well-known strategy Profitunity – to filter the flat periods, to give a signal of the. The Williams Alligator is a technical analysis indicator developed by the late, iconic forex trader Bill Williams, who has given the indicator his namesake. If you're familiar with other indicators, you know that most of them require changing the settings regarding the timeframe you trade. It's not. UROVNI MT4 FOREX When Antivirus real size and a the creation of. Demo programs have new servers only alive, as all and allowed you is tied to files in external. You might consider removing the radiator and having it of filed correspondence. Folders on the. With different remote small team of 1-inch thick black Whitman Thunderbirds piece connect a laptop detection signature or.
At the same time, the spacing of the Alligator lines is supporting your short trade. Once the lines have shown a direction, you can resort to using a price pattern that is a staple of all traders — pullbacks. You want to see all lines pointed in the same direction, in order. This example shows a strong uptrend is underway. You can determine the length of pullback needed by choosing where price has to pull back to.
Here you can see obvious pullbacks that have pulled to the green and red line while the blue kept the upwards slope. The horizontal line is not a perfect pullback but the tail on the lower green candlestick is a price action reversal near the first pullback low. On the far right, you can see this pullback failed however there was not break above the yellow line before price began to close under the 3 lines. The simplest trading strategy and trade signal for the Alligator is to trade the close of a candlestick after it crosses the lines.
I would suggest that traders look at support and resistance to ensure the buy and sell signal is not right into a previous cluster of price. Note the the green line has crossed over the red to the downside. Remember, these lines are displaced into the future and would have plotted in front of the candlestick we are shorting. As for a stop loss when using the Alligator, consider using a multiple of the average true range or use previous swing high and lows. The most important part of the Bill Williams Alligator is when the 3 lines are mixed together.
This is when the Alligator is considered to be sleeping and no trading signals are present. You should keep these instruments on your radar especially if price action is hinting at an increase in momentum. The best time to get on board a trend move is just before it happens. While you may not be able to pick the exact price the trend begins, getting in as close to the beginning as possible should be your goal. When the Alligator is feeding, watch for pullbacks against the main trend direction and trade those moves with a pullback strategy.
As with any trading strategy, it is vital that you test it, lay out a trading plan, and ensure risk management is priority one. Trading the financial markets is not as easy as many make it out to be. Hope you have learned how to use the Alligator indicator as a possible technical indicator to aid in your trading. Here are a few other tutorials that you may find of interest:.
Hey John. I personally trade daily charts. Any timeframe you choose, make sure to test it. With moving averages on lower time frames, you can get a ton of whip back and forth. Thanks for explaining Alligator indicator in detail! This site uses Akismet to reduce spam. Learn how your comment data is processed. Markets trend and market range and the 3 lines of the Alligator indicator, known as the jaws teeth and lips, is designed to alert traders to the presence of either of those market states From those states, a trader can determine if they will use a range trading strategy , a trend trading strategy, or wait for a breakout strategy to be used.
If using a trading platform such as Tradingview, you will have access to the complete indicator. Since the market evolves from trend to range as Williams has stated, we can think of the market much like an Alligator and how it lives in the wild: When the market is ranging, the Alligator is sleeping When the market shows signs of a trend, the Alligator wakes up There comes a time when the Alligator wants to eat.
This is generally a time of low volatility and most traders may want to find another instrument to trade Possible trend forming The lips of the Alligator, the green line, is the fastest moving average and will be the first one a trader will want to monitor. Trend formed and direction Considering an up trend, the green line lips , crosses the red and sometimes the blue line depending on the market state. Think of a market that is ranging — we know it will break out and the longer the range continues, the more violent the breakout can be As the green line starts to cross the lips opening , we could be looking at an Alligator getting ready to feed.
Stages Of The Alligator Indicator If the lips green line cross the teeth red and jaws blue line to the upside, consider a bullish Alligator and look for long trades When the lips cross the teeth and jaws to the downside, consider looking for short trades as we have a bearish Alligator potential At this point, you have learned how to setup and use the Williams Alligator to determine the state of the market and the trend direction.
Trading Ranges and Breakouts When the Alligator is sleeping, the market is range bound and a range trading strategy may be used which can give you a jump into the market early. Trading Pullbacks In Price Once the lines have shown a direction, you can resort to using a price pattern that is a staple of all traders — pullbacks.
Alligator Pullbacks You can determine the length of pullback needed by choosing where price has to pull back to. Alligator Line Cross The simplest trading strategy and trade signal for the Alligator is to trade the close of a candlestick after it crosses the lines. Candlestick Cross and Close Note the the green line has crossed over the red to the downside.
Green line has crossed the red to the downside Short at the low of the candlestick that closed below all 3 lines Close your position when a candlestick closes above all 3 lines As for a stop loss when using the Alligator, consider using a multiple of the average true range or use previous swing high and lows. The fastest AlligatorsLips green reacts ahead to activity of the market — in the direction of a price impulse.
Crossing it by the price is considered the advancing signal, but you shouldn't open the transaction. Gradually lines are developed in a necessary order, the distance between them increases the period of «hunting» opens. Type of the indicator during the different periods of the market. If the interest of the participants of the market doesn't weaken, then red AlligatorsTeeth begins to react after green, and the slow blue AlligatorsJaw line always develops the last.
The return intersection of lines The Alligator loses interest in «food» before a turn or consolidation is considered the moment of the closing of positions. For a turn, the lines have to be crossed consistently in a strict order: green-red-blue, their relative positioning remains in the period of a trend. On a turn or transition in flat there is the reverse crossing of lines, but it is obligatory — according to the same scheme.
The moment of crossing by the price of all three lines will be a strong signal for an entrance to the market; the transaction on kickback from AlligatorsTeeth looks riskier. Scheme of formation of trade signals. Lines have to be directed to the north and be built accurately in order AlligatorsLips The strong signal for purchase. Lines have to look to the south and be built in order AlligatorsJaw The strong signal for sale.
The range of volatility is defined by distance from green to the blue line, and the tilt angle allows to estimate force of a new trend. We will note at once: in case of trade on the Alligator we put Stop Loss obligatory! What of lines of the indicator will be chosen as key for opening a position, and where Stop Loss will be placed, depends on risk level, comfortable for the trader. Scheme of restriction of losses. If to put Stop Loss behind the AlligatorsJaw line, then the position becomes steady against casual fluctuations, but the risk increases as at the time of crossing the transaction can already be in a critical loss.
The Stop Loss installation on the fastest AlligatorsLips will cause the closing of a position at small kickbacks against a trend that doesn't give stable profit. Will be logical to split position volume into 3 parts, that is, for the 1st part of the transaction we put Stop Loss behind the AlligatorsJaw line, for the 2nd — behind AlligatorsTeeth, we close the rest of volume in case of breakthrough of AlligatorsLips. The dynamic trailing on lines allows to catch a short-term impulse, but to leave in time in case of its end.
Check here how easy you can add indicators and change their parameters. If the fractal appears in a zone of an intersection of lines of the Alligator — we ignore a signal. The indicator Alligator in complex system. SMA is used for the visual definition of a long-term trend: while the price is higher than the line — ascending, lower the line — bear, the line horizontal — there is no trend.
Alligator is successfully used in any trade systems as the trend tool Trading Chaos. Techniques of an entrance and risk can be combined: to enter on the fastest line, and to lock in profits — on slower. A shortcoming of the Alligator is the calculation mechanism on the system of moving averages: signals of the beginning of a trend, as a rule, are late.
After all the sides of the indicator were revealed, it is right the time for you to try either it will become your tool 1 for trading. In order to try the indicator performance alone or in the combination with other ones, you can use Forex Tester with the historical data that comes along with the program. Simply download Forex Tester for free. In addition, you will receive 21 years of free historical data easily downloadable straight from the software.
Share your personal experience of the effective usage of the indicator Alligator. It is important for us to know your opinion. Forex Tester is a software that simulates trading in the Forex market, so you can learn how to trade profitably, create, test and refine your strategy for manual and automatic trading.
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We offer classical option for sure trade. Calculation procedure The Alligator uses a set of moving averages with different parameters of the shift. Parameters and control The classical version of the Alligator is included in a set of all trading platforms, settings for creation of moving averages and colour scale which is recommended be not to changed are configured.
Standard version of the indicator The periods, type of moving averages and parameters of shift correspond to Fibonacci's number due to that steadily compensate the effect of mutual delay.
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Forex alligator indicator settings how to trade brent on forexAlligator Indicator / Williams Alligator strategy / Best indicators settings / LiteFinance
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Williams believed that individuals and institutions tend to collect most of their profits during strongly trending periods.
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|Buyers and sellers on forex||For traders seeking to find an earlier entry than watching for crossovers of the green and blue lines, they can watch for a price candle to break through all three of the alligator lines, signaling a breakout. When this occurs, section of the previous high and low and using your entry tactics, trade inside the range. Forex broker sberbank reviews of them is considered the line of balance the «fair» price for the time period provided that the price isn't influenced by other strong factors, as a rule — fundamental. Key Takeaways The Williams Alligator indicator is a technical analysis tool that uses smoothed moving averages. For purchase: the price punches the key line from below up and is closed above a point of intersection. Software to copy trades between accounts.|
|Mortgage capital forex training||January 9, at pm Reply. The indicator alerts us to 3 stages of market development and when understanding those, you can design a simple approach to trading the market:. November 13, at am Reply. Your Practice. Think of a market that is ranging — we know it will break out and the longer the range continues, the more violent the breakout can be As the green line starts to cross the lips openingwe could be looking at an Alligator getting ready to feed. Lines have to look to the south and be built in order AlligatorsJaw While the price moves under the green line the trend is descending.|
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Williams Alligator is a complex, but extremely helpful and profitable technical analysis indicator, designed by one of the most legendary forex traders to ever live. The indicator can be used across forex, commodities, stock indices, and cryptocurrencies — among the many financial assets offered on PrimeXBT. Trading software can be expensive, but PrimeXBT features built-in charting tools right within the trading dashboard, offering incredible value for traders.
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Try day trading today and sign up for a free PrimeXBT account. Investing in or trading gold or other metals can be risky and lead to a complete loss of capital. This guide should not be considered investment advice, and investing in gold CFDs is done at your own risk. The information provided does not constitute, in any way, a solicitation or inducement to buy or sell cryptocurrencies, derivatives, foreign exchange products, CFDs, securities, and similar products.
Comments and analysis reflect the views of different external and internal analysts at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of PrimeXBT. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible.
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US stocks had yet another week of trashing after inflation numbers came in slightly hotter than expected. The CPI numbers…. Prices swung wildly…. Reading Time: 6 min. How the Williams Alligator Works The Williams Alligator is based on the theory that financial assets trend between 15 and 30 percent of the time, while stuck in a tight trading range the other 85 and 70 percent of the time, Williams believed that the former is when most institutional traders book most of their profits.
How to Read the Williams Alligator The Williams Alligator is composed of three lines, the Jaw, a blue line based on the bar SMMA, smoothed by eight bars on subsequent values; the Teeth, a red line based on the eight-bar SMMA, smoothed by five bars on subsequent values; and Lips, a green line based on the five-bar SMMA, smoothed by three bars on subsequent values. The Best Williams Alligator Trading Strategy Because the Williams Indicator technical analysis indicator is used to understand both when long or short positions should be opened or closed, as well as signal when trends are forming, or slowing and growing in strength, it can be part of an effective trading strategy.
Identify When Markets Are About to Trend The Williams Alligator is a trend-following indicator and can signal the absence of a trend, the formation of a new trend, and the direction of the trend. Range Scalping Using the Williams Alligator When the alligator is sleeping, it suggests an absence of a trend, causing the asset to trade within a tight trading range.
Trading Pullbacks To Alligator Support or Resistance When markets begin to trend, traders can look for pullbacks the Williams Alligator lines to take a position, setting a stop below the support level as a point of invalidation. Swing Trading Alligator Line Crossovers The most common, effective, and straightforward way to use the Williams Alligator technical analysis indicator is to trade crossovers of the lips and jaw of the alligator. Candlestick Cross and Close For Catching Trends Early For traders seeking to find an earlier entry than watching for crossovers of the green and blue lines, they can watch for a price candle to break through all three of the alligator lines, signaling a breakout.
Discovering Dynamic Support or Resistance Traders often make the mistake of assuming that support or resistance is horizontal only and often can miss out on winning trades as a result. Traders can adjust the settings of the indicator for unique results. Try it yourself! Conclusion Williams Alligator is a complex, but extremely helpful and profitable technical analysis indicator, designed by one of the most legendary forex traders to ever live.
Risk Disclaimer: Investing in or trading gold or other metals can be risky and lead to a complete loss of capital. Related articles How to trade cryptocurrencies How to trade forex How to stake Ethereum How to trade indices How to trade natural gas Open account. Subscribe to stay updated Receive the latest news and stay informed! Other news Market research. Market research. When the next candlestick closes above or below all moving averages, it is a signal to enter a buy or sell trade.
I should note that some traders use additional filters to supplement the Alligator, as it sends quite a lot of false signals in the sideways trend before the market determines the direction. As additional filters, you could employ other indicators developed by Bill Williams: Awesome Oscillator or Fractals.
I will cover how to use them in detail below. If the trend is up, the lines are arranged in the following order: The green one is on the top; next comes the red line, and the blue one is the lowest. All three lines are directed up. As the trend develops, the distance between the lines is increasing. In a downtrend, the lines are arranged in the opposite order. The jaw line is at the top, below is the teeth line, and the lip line is the lowest.
Likewise, all three lines are directed down. As the downtrend develops, the distance between the lines is increasing. The Alligator trading strategy suggests that you should watch the arrangement of lines in the chart. You need to learn to identify the market state — when the Alligator sleeps and when it is waking up. It is important to filter signals generated by the Williams indicator to increase the number of profitable trades. Based on this formula, we see that the value of each indicator line can be calculated manually.
However, Alligator is present in every trading platform by default, so there is no need to calculate these values yourself. The Alligator indicator shows the market state at any given time. It shows when the market is trading flat, when there appears momentum and when this price momentum starts and ends.
The latter is the most important because you should open a position as close as possible to the beginning of the trend and at the most favorable price, and then close it together with most large players. In a trading range, the Alligator's "mouth" is closed. With the beginning of the trend, it begins to "open up" and "eat.
I will divide the Alligator signals into three groups. Each of the groups describes a certain state of the market at the current moment. The consolidation state of the market is characterized by the closed mouth of the Alligator. The lines of the lips, teeth, and jaws are interwoven. Each next to the other. In approximately the same place on the chart.
The lines do not indicate a specific direction, they are located in the horizontal plane. The sleeping state is characterized by a flat, the formation of an accumulation zone, as large traders are adding up to the trades.
After the traders accumulate positions, a weak price movement begins. At this moment, the mouth begins to open. The price chart crosses the Alligator line in a particular direction. Then the lines begin to line up in the trend direction, one after another: first is the green line, then — the red one, teeth and lips, and then — the blue one, the jaw.
Suppose the price is above or below all the indicator lines and the moving averages already indicate a specific direction. In that case, they point in one direction, then the Alligator has woken up, and the hunt will begin soon. It's time to look for an entry point. If the momentum is supported by other traders, then the mouth begins to open wider and wider. The lines of the lips, teeth, and jaws point in the same direction. The distance between the lines starts to increase. There is a clear trend in the chart.
The strength of this trend will be proportional to the time the Alligator slept. The longer the market has been in the accumulation zone, the stronger the momentum will be. At this moment, you cannot open positions against the trend. Traders who enter trades against the trade by mistake are doomed to failure. When Alligator is eating, nothing will stop it. When the Alligator is eating, you should trade only in the trend direction, using strong support levels to enter the market: the lines of the lips, teeth, and jaws.
After the Alligator is full, the market calms down, the lines lose direction and begin to intertwine with each other. The market needs a break, and the Alligator falls asleep at that moment. In the hourly timeframe, I prefer using the following settings of the indicator 21;13;8, but I will cover it in detail later.
On the left side of the chart in the above picture, we see that the Alligator is waking up, a buy signal appears, followed by a powerful uptrend that characterizes the stage when the Alligator is eating with an open mouth. After some time, the price tests two lines of the indicator: green and red, but the direction of these lines is still up, so the market grows by a few more points. Next, the price breaks through the Alligator lines and updates the local minimum.
The lip line crosses the teeth and jaw line, signaling the end of the uptrend. It's time to take the profit. The next stage of the Alligator trading is sleeping. At this stage, the market is trading flat. It is not recommended to trade in the sideways trend.
After sleeping, the Alligator is awakening. The mouth begins to open, and another uptrend starts. When the green line is above the red one and the red is above the blue, and the price is trading above all the Alligator lines, a buy signal is generated. When the price hits the highest high in the chart, the price enters a consolidation range. The green line crosses the red one, and the red line crosses the blue one. The Alligator is falling asleep. The Alligator begins to wake up when the distance between the lines begins to increase.
On the right side of the chart, we see that the price is trading below the lines, and they acquire a downward direction. It is a sell signal in the Alligator trading strategy. The downtrend does not last long, and the lines cross each other in the opposite direction. It is time to exit short trades and turn up.
The last buy signal appears on the right side of the chart, immediately after the sales are closed. Alligator trading strategies come into two groups. The second type of trading strategy employs additional filters to spot entry points. Employing auxiliary indicators reduces the number of false signals and gives an opportunity to enter the market with additional confirmation.
To begin with, let's consider the classic use of the Alligator without using other analysis tools. That is, the indicator is used in its original form. Open the chart of any trading instrument in the LiteFinance Personal Profile. I will use the gold price chart as an example. All the attempts to drive the price up have been absorbed. That is, it has been relevant to sell gold up to now. At the end of the trading session on January 18, — the beginning of the trading session on January 19, , the Alligator fell asleep.
Starting from the European trading session, the Alligator begins to wake up, the lines start to line up. During the first trading hours of the European session, the price closes above the Alligator's mouth. We notice this moment and decide to look for an entry point to buy gold. Starting at terminal time on January 19, the price begins to decline to test the support area formed by the Alligator lines. After the price tested the area of lines congestion support , and after the candlestick closed right at the levels at , we decide to open a long position with a stop loss below the local low of January 18 at The position opening price is There is no trading activity at the US session; the market participants are accumulating trading volume.
On the new trading day of January 20, the market closes at the price rise. At the European session, there was a try to reverse the trend down. The trend continues. Just before the US session, the trade is exited with a Take Profit at This Take Profit level was not chosen randomly. This is the level of the previous local highs. The target of an uptrend is to break through the important high. As we use the Alligator indicator alone, without any additional filters, the stop-loss orders should be placed beyond the local lows and highs, depending on the trend.
Take Profit levels are set at the breakthrough of important high and lows. MA Method: Smoothed. This strategy is a part of Bill Williams Profitunity trading strategy. Profundity could be a bit complicated for beginner traders, but the Alligator and Fractals trading strategy will suit traders of any level. The Fractals indicator perfectly complements the Alligator.
You enter a trade at the fractal breakout when the market trend has already acquired a direction. This is a trend-following strategy. You spot the moments when the price momentum begins and try to enter at the momentum inception. When the market is trading flat, neither the Alligator alone nor the combination with Fractals will not work. The strategy works on any financial instrument, be it forex, commodities, or cryptocurrencies.
The best timeframes to apply are H1, H4 and D1. In shorter timeframes, there will be many signals, but the quality of such signals will be bad: a lot of market noise, a lot of false signals. Using the W1 timeframe, you will have to expect an entry signal for weeks or even months. Let us see the optimal settings to trade with the Alligator and Fractals indicators on the H1 timeframe, which allows us to trade intraday or hold trades for three days.
You can choose the colors and the thickness of the lines as you want. The Fractals indicator looks like an arrow above the Japanese candlestick up or below the candlestick down on the chart. It indicates the high or low of the price.
The Fractals indicator does not require setting parameters. You only need to set the display color and size of the icons. To enter a buy trade, the Alligator should be waking up. The lip line should break through the teeth line upside, and the teeth line should cross the jaw line from bottom to top. You wait for the moment when the hourly candlestick breaks through the last formed upward fractal and closes above the high.
At this moment, you open a buy position. First of all, we determine the place of placing Stop Loss. It is placed below the low of the last formed descending fractal. We calculate the Take Profit price in such a way that the distance from the trade entry point is twice as long as the distance to the stop loss. There are other variations of setting Take Profit: at the breakthrough of any significant high, at a distance three times greater than Stop Loss, at a strong level of a longer timeframe, etc.
I usually use the method described above. A take profit of two times larger than the potential stop is not bad, and you shouldn't be greedy. To enter a sell trade, the Alligator lines should start sloping down, and the Alligator should be waking up. The Lip line should be below the Teeth, and the Teeth should be below Jaw.
The price should be trading below all the Alligator lines. Expect when the hourly candlestick breaks through the most recent downward fractal and closes below. Open a sell position at this moment. The trade is moved to the breakeven, according to this strategy, when the Jaw line the blue one is below the entry price for a sell trade and above the entry price for a buy trade.
Why should you move the order to the breakeven zone in this case? It is because the Jaw line is responsible for the trend border in the timeframe you trade. If the line is broken out, the trend is likely to change. In this case, you should look for an entry in the opposite direction.
There is no point in holding the trade even if the Stop Loss is set beyond the blue. The strategy suggests not every trade will reach the set Take Profit, and it is normal. If the market conditions change unexpectedly, traders exit trades manually. Alligator falls asleep. This pattern of indicator behavior suggests that the trend has been exhausted, and it is not clear whether it will continue in the future. It is better not to risk, and when a new signal appears in the same direction, enter a new trade.
Price breaks through the Jaws line. This indicates a possible trend change. If the price consolidates above the jaws blue line and continues to move in a new direction, the Alligator lines will begin to rebuild and indicate a new direction for trading. Some traders close the trade manually if the instrument reaches the important and strong level on the longer timeframe chart. Another reason to exit a trade manually if the price passes the average daily move suitable for intraday traders.
There could be other conditions. Here everything becomes individual, and you should act, according to your trading system. The candlestick, on which the Signal Fractal was formed, should not touch the Alligator indicator lines. If the candlestick, on which the fractal was formed, touches the indicator, then such a fractal is considered invalid, and the signal is not traded. Different Alligator indicator settings apply to trading in different timeframes.
I should note that the longer is the timeframe, the more reliable are the signals generated. But in this case, there will be fewer signals. And vice versa, the shorter is the timeframe, the more there will be signals, but the false signals will be numerous. Personally, I prefer to use the indicator on the H1 timeframe. This is the optimal timeframe for short-term trading with a trade holding time of 1 to 5 days.
A moderate amount of market noise, combined with frequent and clear signals for currency pairs, makes it possible to focus on a few popular instruments and trade without psychological stress. These are the Alligator indicator default parameters offered in the LiteFinance client profile. On the timeframes of 4 hours and longer, there is less market noise; therefore, more reliable trading signals from any forex indicators appear.
The drawback is that it takes more time to wait for the signal. To compensate for this disadvantage, the Alligator indicator should be used with the standard parameters recommended by Bill Williams:. These are the generally accepted Alligator settings.
Any MetaTrader terminal offers such parameters by default. You can apply the Alligator with the standard parameters of 13;8;5. But there will be many false signals in this case. You will need additional tools, for example, oscillators or the Fractals indicator, to filter out false signals. Let's go the other way and take the periods even longer than with the settings for the H1 timeframe.
We shall take the following numbers from the Fibonacci sequence: 34 for the period and 21 for the shift into the future. These settings reduce the market noise and filter signals. With these settings, you will get a couple of reliable signals for day trading, which is still good for a day trader. It should be borne in mind that the shorter the working timeframe, the greater values should be set for the indicator formula. The longer the timeframe, the smaller the values can be set into the formula.
Before applying the new Alligator parameters in real trading, you need to test them on a demo account or on historical data. A manual strategy tester will suit the best. The Alligator indicator allows a trader to define the ongoing market trend. It generates the entry points at the momentum inception and signals the trend exhaustion.
You can think that the Alligator is a complete trading strategy, but it is not so. You need additional filters to detail the entry and exit points. For example, you can employ oscillators or other tools, such as Fractals or Price Action patterns, volume indicators, and so on. Listed below, there are primary advantages and disadvantages of the Alligator, for you to decide if the Alligator trading strategy suits you or not.
To make up a profitable trading system, you need to be able to combine the Alligator with other indicators. You need additional entry filters; otherwise, there will be many false signals in the sideways trend. It is clear from the above chart that the Alligator has more advantages than disadvantages.
Alligator is a straightforward indicator, included in most trading platforms by default.