Having a funny name, the indicator shows the power of bulls or bears to the aristotelian alligator forex trading system zip a trend. It adapts most to a trending strategy, but it’s famous for calling reversals too.
For this reason, the indicator is popular among Forex traders, trend followers or contrarians. This is one of Bill Williams famous indicators. Together with Fractal, Gator or the Awesome oscillator, the Alligator Forex strategy is unique in every way. It is part of a special group of indicators. All traders face a dilemma: to use trend indicators or oscillators for their analysis? There’s no right or wrong answer to this, as both have pros and cons. Either as part of an individual trading system or not, the Alligator indicator shows the right side of the market.
Traders use it to find a bullish or bearish market, support or resistance levels, confluence areas, etc. Introducing the Alligator Indicator The indicator has a funny name: it comes from the head of an alligator. Part of it, there are three averages. Each average has a name related to an alligator’s mouth parts: jaws, teeth, and lips.
A trading system based on moving averages plots multiple averages on a chart. Any Forex Alligator strategy contains three averages, with the above names. Any average has a period that relates to. For the Alligator, these are the 13, 8 and 5 periods for jaws, teeth, and lips, respectively.
All three averages combine the power of the Alligator indicator. Either closing or opening price, a median one or not, multiple settings exist. What makes this indicator unique is the ability to shift the averages. In fact, with the default settings, the averages shift, leaving a bit of room from current price until the Alligator Forex indicator. However, any trading platform offers it, so the principle is the same. Bill Williams path, choose the Alligator indicator.
The result is a pop-up window like the one above giving you customized possibilities. To use it like Bill Williams intended, just leave it with the default settings. Anything is editable, though: colors, levels, etc. The three averages plotted on the chart reflect the time frame you use. If the Williams Alligator indicator is set on the daily chart, the jaws consider 13 days, teeth 8 and lips 5, respectively. The jaws line comes in blue, teeth in red and lips in lime, but this is just a setting. For that, the following information is crucial.
Alligator Indicator Standard Interpretation When using it, think of a system that follows price. No matter where the price goes, the Alligator goes. These averages closely follow price and keep traders on the trend. Because of that, missing a trend is virtually impossible. The three elements should NOT cross. When doing that, the perfect order forms.