Function Name: alligator

Tags: None

Category: Trend

The Alligator indicator can be described as a compass to keep you trading in the right direction. It is a combination of three Smoothed Moving Averages at the mid price, referred to as the Alligator's Jaw (blue), the Alligator's Teeth (red) and the Alligator's Lips (green).

When all three lines are intertwined, the Alligator is "asleep", which indicates a range-bound market. When the Alligator "opens its mouth" (i.e., the three lines move away from each other), this indicates the start of an upwards or downwards trend. When it "goes to sleep" again (converging lines), it is time to fix the profits.

If the Alligator is "awake", a price above the Alligator's mouth signals an uptrend, a price below signals a downtrend.


Author:   Bill Williams