The Alligator technical indicator was introduced by Bill Williams.
This indicator follows the trend with the help of 3 smoothed moving averages.
By default, the following values are used: the 13-period smoothed moving average (known as the Jaw), the 8-period smoothed moving average (known as the Teeth) and the 5-period smoothed moving average (known as the lips).
The Alligator MT4 indicator reduces the number of false trend trades through the use of smoothing moving averages.
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Download the “Alligator.mq4” MT4 indicator
Indicator Chart (USD/JPY M15)
The USD/JPY 15-minute chart below shows the Alligator forex indicator in action.
Basic Trading Signals
The Alligator indicator is a typical crossover system indicator.
Buy trade conditions:
- the 5-period smoothed moving average above the 8-period smoothed moving average and above the 13-period smoothed moving average
- the 8-period smoothed moving average above the 13-period smoothed moving average
Sell trade conditions:
- The 5-period smoothed moving average is below the 8-period smoothed moving average and the 13-period smoothed moving average
- The 8-period smoothed moving average is below the 13-period smoothed moving average
Alligator Indicator and Entry Take Profit Forex Winner Forex Trading Strategy
This MT4 strategy combines trend identification with precise entry signals using the Alligator MT4 Forex Indicator and the Entry Take Profit Forex Winner MT4 Indicator.
The Alligator indicator uses three smoothed moving averages to identify market trends.
A buy trend occurs when the 5-period smoothed moving average is above both the 8-period and 13-period smoothed moving averages, while a sell trend occurs when it is below both.
The Entry Take Profit indicator confirms entry points with blue arrows for buys and red arrows for sells.
Combining these indicators on M15 and H1 charts helps capture medium-term trends with clear entry and exit rules across multiple currency pairs.
Buy Entry Rules
- Confirm the Alligator trend: the 5-period smoothed moving average is above the 8- and 13-period moving averages.
- Wait for a blue arrow from the Entry Take Profit indicator.
- Enter a buy trade at the close of the signal candle.
- Place a stop loss just below the most recent support level.
- Take profit at the next resistance level or follow the Entry Take Profit exit signal.
Sell Entry Rules
- Confirm the Alligator trend: the 5-period smoothed moving average is below the 8- and 13-period moving averages.
- Wait for a red arrow from the Entry Take Profit indicator.
- Enter a sell trade at the close of the signal candle.
- Place a stop loss just above the most recent resistance level.
- Take profit at the next support level or follow the Entry Take Profit exit signal.
Advantages
- Combines trend-following with confirmed entry signals for high-probability trades.
- The alligator indicator clearly identifies trending periods and avoids sideways markets.
- Entry Take Profit provides precise buy and sell points to reduce hesitation.
- Works well on M15 and H1 charts for medium-term intraday trading.
- Supports both scalping and swing intraday strategies depending on the timeframe.
- Helps traders avoid countertrend trades by requiring trend confirmation.
- Simple to implement and follow consistently.
- Enhances discipline by combining trend direction and entry confirmation.
Drawbacks
- Alligator signals may lag at the beginning of new trends.
- False arrows from the Entry Take Profit indicator can occur in choppy markets.
- Requires monitoring for optimal entry and exit, especially on M15 charts.
- Major news events can trigger rapid reversals, bypassing signals.
- Trend direction may change quickly, requiring a quick reaction to exit trades.
Example Case Study 1
On EURUSD H1, the Alligator indicator showed a bullish trend with the 5-period MA above the 8- and 13-period MAs.
A blue arrow appeared on the Entry Take Profit indicator.
A buy trade was entered at candle close with a stop loss below recent support.
Price started moving up and the trade was closed at the next resistance level, capturing a 52 pip gain.
Combining trend confirmation with the entry signal provided a strong, high-probability trade.
Example Case Study 2
On AUDJPY M15, the Alligator indicated a bearish trend with the 5-period MA below the 8- and 13-period MAs.
A red arrow appeared on the Entry Take Profit indicator, signaling a sell.
The trade was opened at candle close with a stop loss above the recent resistance.
Price moved downward, and the trade was closed near the next support level, securing a 28 pip profit.
Trend alignment and entry confirmation ensured a disciplined and effective intraday trade.
Strategy Tips
- Focus on currency pairs with strong trending behavior for the best results.
- Check higher timeframes for overall trend alignment before entering trades on M15 or H1 charts.
- Adjust stop loss and take profit levels based on recent swing highs and lows to manage risk effectively.
- Be patient and wait for both trend confirmation and the entry arrow to appear before trading.
- Consider partial profit-taking at intermediate levels in strong trends.
- Scale position size according to market volatility to preserve capital during intraday swings.
- Skip trades if signals do not fully align with the prevailing trend to reduce low-probability setups.
- Combine with support and resistance analysis to refine exit points.
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Download the “Alligator.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern indicator
Customization options: Variable (Jaws Period, Jaws Shift, Teeth Period, Teeth Shift, Lips Period, Lips Shift) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend
