Alligator indicator trading strategy

Alligator Indicator - How To Use It As A Trading Strategy |NetPicks

 

alligator indicator trading strategy

Dec 13,  · This failed Alligator trade was a precursor to a trading range in which Alligator signals were unreliable. Review – Trading the Alligator System. The main drive of Bill William’s books is that traditional trading indicators do not work because they ignore the chaotic nature of markets. Alligator Formula. The Alligator indicator is common on Metatrader4 trading software, and the calculation formula sequence involves these straightforward steps: 1) The Alligator’s Jaw, the “Blue” line, is a period Smoothed Moving Average, moved into the future by 8 bars;. May 05,  · I used the basic signals of the Alligator indicator trading system, which got me into an emerging bearish trend with the Aussie. But first, let’s give some brief details about the basic Alligator indicator strategy. What is the Forex Alligator. The Alligator indicator forms on Forex moving averages. It consists of three smoothed MAs that are.


Exploring the Williams Alligator Indicator


Posted in: Trading Article alligator indicator trading strategy, Trading Indicators The Alligator indicator was invented by Bill Williams and uses 3 lines which are actually moving averages with a spin.

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 strategya trend trading strategy, or wait for a breakout strategy to be used.

Three smoothed moving averages are used however they are displaced moving averages. This simply means that the reading is adjusted X bars into the future which better forecasts the future trend direction. There is no trend in the market When the 3 lines are intertwined, we do not have a trend. 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, alligator indicator trading strategy.

You want to see the green line cross both of the slower moving averages. This is a sign that the Alligator is waking up. We will also see the lips and the jaw start to turn in the direction of the green line, alligator indicator trading strategy. Trend formed and direction Considering an up trend, the green line lipscrosses the red and sometimes the blue line depending on the market state.

The red line teeth starts to head upwards crossing the blue jaw line and we now determine an uptrend is in place. Alligator Indicator Explained Here is a great analogy which will help you decide when a trading opportunity could be presenting itself: When the 3 lines of the Alligator indicator are intertwined, alligator indicator trading strategy, the Alligator is sleeping.

When an Alligator is sleeping, nothing interesting is going on. The longer the Alligator sleeps, the hungrier it may be when it awakes. 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.

This is the time that you want to be on alert for a trading opportunity. As the green line continues in one direction, the red line which represents the teeth of the Alligator, begins to separate and move in the same direction — the teeth are opening.

The trader is looking to feast on the price action that is happening. 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.

There are several trading strategies you can use and keep in mind that all indicator based strategies do lag the market. This may affect the trading strategies you use. Trading Alligator indicator trading strategy 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. Alligator indicator trading strategy can see in this graphic the 3 lines mixed together. When this occurs, section of the previous high and low and using your entry tactics, trade inside the range.

At the same time, the spacing of the Alligator lines is supporting your short trade Trading Pullbacks In Price Once the lines have shown a direction, you can alligator indicator trading strategy to using a price pattern that is a staple alligator indicator trading strategy all traders — pullbacks. You want to see all lines pointed in the same direction, in order, which shows a trend is underway. Unlike the first strategy, trading pullbacks in a maturing trend does pose risks as the trend may run before alligator indicator trading strategy a trading opportunity Alligator Pullbacks 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, alligator indicator trading strategy. 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. Alligator Line Cross The simplest trading strategy 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, alligator indicator trading strategy.

Candlestick Cross and Close Note the the green line has crossed over the red to the downside. Remember, alligator indicator trading strategy lines are displaced into the future and would have plotted in front of the candlestick we are shorting.

Green line has alligator indicator trading strategy 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 alligator indicator trading strategy multiple of the average true range or use previous swing high and lows.

In Closing The most important part of the Bill Williams Alligator is when the 3 lines are mixed together, alligator indicator trading strategy.

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, alligator indicator trading strategy, 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.

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Alligator Trading Strategy | ExpertOption

 

alligator indicator trading strategy

 

In the next article on the Alligator indicator, we will put all of this information together to illustrate a simple trading system using this Alligator indicator. More forex indicators Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. Jul 07,  · Exploring the Williams Alligator Indicator. FACEBOOK TWITTER Add the Alligator indicator to your charts from the indicator list in your charting or trading Adjusting Strategies . May 20,  · The Alligator indicator is a great Forex trading tool that has been fascinating traders for a long time. While not a moving average, riding trends is its main byhalesine.ml article shows how to use the Alligator indicator in Forex in a profitable trading way.