Alligator is a forex trading system. Actually Alligator system is composed of three moving averages but those moving averages are custom made and it is named Alligator system. It is purely a trend following system and it is not suitable to trade in a sideways or flat market. Time frames can be any but higher time frames are always recommended. Higher time frames doesn’t mean you should trade on daily and weekly charts, it just means that it is better to not trade in time frames like 1M, 5M, 15M, etc. while using Alligator forex trading system.
When someone talks about moving averages, he/she cannot avoid about crossover trading strategy. Most of the time moving averages crossovers is used as a trading signal while dealing with the forex trading systems that are related with moving averages. When there is single moving average crossover between price and moving average can be taken as a base to enter in to the market while when there is multiple moving averages crossovers among moving averages can be taken as a signal generator. In Alligator forex trading system we have three moving averages with different periods. The green color moving average moves fastest, red moving average moves in medium pace and the blue moving average moves slowest.
When Alligator forex trading system is installed correctly on your trading system your chart should look like this:
As you can see above there are three moving averages. Signals generated by Alligator system will be purely based on crossovers of moving averages and the major direction of the market.
Buying Conditions Using Alligator Moving Averages.
- Major trend of the market should be up. i.e. all the moving averages should be trending higher.
- Green color moving average should cross above all the other moving averages.
- Place your long position as soon as above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when green moving average pulls back to touch the red moving average.
Selling Conditions Using Alligator System.
- Major trend of the market should be down. i.e. all the moving averages should be trending lower.
- Green color moving average should cross below all the other moving averages.
- Place your short position as soon as above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when green moving average bounce back to touch the red moving average.
Download Free Forex Alligator Indicator