About the Alligator Indicator
The Alligator Indicator for MT4 was developed by Bill Williams. It is a trend-following tool using three smoothed moving averages.
These lines are called the Jaw (13-period), Teeth (8-period), and Lips (5-period).
The indicator shows when the market is trending or ranging and traders can use it to enter trades in the direction of strong trends.
By observing the relative positions of the three lines, traders can determine the trend direction and potential trade entries.
Free Download
Download the “Alligator.mq4” MT4 indicator
Key Features
- Three smoothed moving averages to detect trends.
- Reduces false trend signals with smoothing.
- Simple crossover system for easy interpretation.
- Helps identify trend direction and trade entries.
Indicator Chart
The chart shows the Alligator Indicator plotted below and on top of the price. The Jaw, Teeth, and Lips moving averages are visible.
Buy signals occur when Lips and Teeth are above the Jaw in an uptrend. Sell signals occur when Lips and Teeth are below the Jaw in a downtrend.
The chart helps confirm trend strength and potential entry points.
Guide to Trade with Alligator
Buy Rules
- Wait for the Lips (5-period) to cross above the Teeth (8-period) and Jaw (13-period).
- The Teeth must be above the Jaw at the same time.
- Ensure the moving averages are sloping upward.
- Enter the buy trade when the crossover is confirmed.
Sell Rules
- Wait for the Lips (5-period) to cross below the Teeth (8-period) and Jaw (13-period).
- The Teeth must be below the Jaw at the same time.
- Ensure the moving averages are sloping downward.
- Enter the sell trade when the crossover is confirmed.
Stop Loss
- For buy trades, place the stop 2-3 pips below the most recent swing low.
- For sell trades, place the stop 2-3 pips above the most recent swing high.
- Optionally, trail stops along the moving averages as the trend develops.
Take Profit
- Close buy trades when the Lips cross back below the Teeth or Jaw.
- Close sell trades when the Lips cross back above the Teeth or Jaw.
- Optionally, use a multiple of the ATR for dynamic targets.
Alligator Indicator and Entry Take Profit Forex Winner Forex Trading Strategy
This MT4 strategy combines trend identification with precise entry signals using the Alligator Indicator and the Entry Take Profit Forex Winner 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.
- Enhances discipline by combining trend direction and entry confirmation.
Drawbacks
- Alligator signals may lag at the beginning of new trends.
- Requires monitoring for optimal entry and exit, especially on M15 charts.
- 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.
Download Now
Download the “Alligator.mq4” Metatrader 4 indicator
FAQ
How can I tell if the market is trending or ranging?
When the Jaw, Teeth, and Lips are aligned and moving apart, the market is trending. When the lines are intertwined, the market is range-bound.
Can I adjust the moving average periods?
Yes. You can change the periods of the Jaw, Teeth, and Lips from the indicator’s input tab to fit your trading style.
How do I use Alligator with other indicators?
Combine it with other trend indicators, volatility tools, or oscillators to confirm entries and plan stop loss or take profit levels.
Summary
The Alligator Indicator for MT4 helps traders identify trends and reduce false signals.
Using three smoothed moving averages, it shows when the market is trending and when it is ranging.
Traders can enter trades based on the crossover and alignment of the Jaw, Teeth, and Lips.
Stop loss and take profit can be adjusted using swing points or ATR.
Combining Alligator with other tools can improve trade accuracy and risk management.
