The Alligator

The purpose of this indicator is to identify trend and to make it easy to spot when new trends begin. To most traders, having a reliable tool to identify trend as early as possible is extremely valuable. Markets only trend for short periods so if you can reliably prepare to be in the market when it is trending you can make the most of your trading opportunities.

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Alligator

Technical analysis tool developed to identify trend and trend direction. The Alligator is currently available in both Personal Hotline and HotlineX

Background
The Alligator is the brainchild of longtime trader and chaos theory proponent, Bill Williams, who also developed the backstory. The Alligator spends most of his life sleeping. While he sleeps he gets hungry. The longer he sleeps, the hungrier he gets and the more he eats when he awakes.

Components
The Alligator is made up of three moving averages. The Jaws are represented by a 13 day moving average, displaced 8 days into the future. The lips are made up of a 8 day moving average, displaced 5 days into the future and the teeth are a 5 day moving average, 3 days in the future. When they are intertwined, the Alligator is said to be sleeping. When he awakes, the jaws, the teeth and the lips spread apart as his mouth opens.

Set up and Analysis
All of the parameters are pre-defined and the Alligator uses the colors of the first 3 moving averages so there is nothing to set up to use the Alligator.

When the Alligator is applied to a chart, the legend on the top of the chart will display the value of the teeth, jaws and lips followed by an interpretation of the results. This same information is reported in the Master Analysis report and the summaries report new uptrends and downtrends reported by the indicator.

Ranking by the Alligator sorts your list by symbols that are sleeping, in an uptrend and in a downtrend.

Generally it is recommended to trade with the trend and to use the prices of the conversion and the base line as support and resistance levels for entry and exit points.

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