Wednesday, August 29, 2018

Strategies for Using the Alligator Indicator

Alligators are indicators that determine trends based on time periods. The main goal is where the price will move and how strong the movement will be.

To use the indicator we can imagine a large crocodile because the alligator is a crocodile.

What is the use of this indicator in trading?

  • Determine trends.
  • Determine the entry point.

The main function of the Alligator is to determine what trends are dominating the market whether it is rising (buying) or down (selling), which means that indicators can be used for trending periods in the market.

1. Select the "Alligator" indicator from the list of indicators.

2. Without changing the settings, click "Apply".

3. The indicators will be on your graph and ready to be used.

How does it work?

How to use it is simple - the indicator represents a combination of the three Moving Average that shows various periods of time and movement. Keep in mind that the Moving Average is smooth and not simple or other types: it minimizes the influence of market noise and minor market fluctuations on the graph.

Bill William calls this Moving Average a Balance Line, because it shows the price that will occur on the market when there is no other inhibiting factor.

Every Moving Average used in Aligator has its own name:

  • Alligator's Jaw - A purple line
  • Alligator's Teeth (Tooth) - A yellow line
  • Alligator's Lips - Lines are blue

Alligator strategy

1. Apply the Alligator indicator on the graph. You will see 3 Alligator jaw lines.

2. Movement when the indicator line is attached indicates that the Alligator is sleeping. The longer he sleeps, the more hungry he becomes. This is a waiting period and if you catch something like this, trading activities are not recommended.
3. When the Alligator wakes up he starts to "yawn", then opens his "jaw". This is the right time to enter the market. .
  • Opening the jaw up is a signal of further upward movement and buying call options.
  • Opening the jaw down is a signal of further downward movement and buying a put option.
Advanced use

Important notice: Like other technical methods or analysis, the Alligator indicator may show a delayed signal. Incorrect signals may also appear; therefore the Alligator requires maximum optimization, in accordance with certain market conditions and certain assets.

After selecting the Alligator indicator, you will see the settings page.

  • By increasing the number of periods, the Alligator is optimized for a more volatile market. The indicator will show less, but the signal is more accurate.
  • By reducing the number of periods, Alligator is optimized for a trending market. The indicator will give more signals, but the accuracy will depend on the strength of the trend.

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