Flat Alligator Forex Trading Strategy

The Flat Alligator forex trading strategy is as simple as it can be and can be used by beginners and pro traders alike. Use it for scalping, day trading and swing trading on all currency pairs.

Chart Setup

MetaTrader4 Indicators: Alligator (default setting), Flat Indicator.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: All

Currency Pairs: Any

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Buy Trade Example (Click the image for full size)

flat-alligator-forex-trading-strategy

Fig. 1.0

Strategy

Long Entry Rules

Place a buy order if the following chart/indicator patterns are in display:

  1. If the Alligator’s 5SMA (green) crosses on the 8SMA (red) line, and at the same time the cross of both moving averages crosses on the 13SMA (blue) upwards, it denotes a bull market.
  2. The Flat Indicator issues a very simple alert, in which a corresponding SkyBlue bar forms within its indicator window supports the bullish sentiment i.e. a bulls market is developing.

Stop Loss for Long Entry: Enter stop loss ≥10-35 pips below entry price (always re-examine personal money management strategy and see if it conforms to our prescribed limits).

Exit Strategy/Take Profit for Long Entry

The following chart conditions will trigger an exit or take profit on position(s):

  1. When the green 5SMA line of the Alligator indicator crosses the red 8SMA line downward, it means the trend is about to reverse and an exit or take profit is advised.
  2. Black bars within the Flat indicator window denotes reduced volatility i.e. the market is range bound, meaning price is about to take on a new direction. It is important to exit or take profits on open position(s)

Sell Entry Rules

Initiate a sell order when the following chart patterns are in display:

  1. If the Alligator’s 5SMA (green) crosses on the 8SMA (red) line, and at the same time the cross of both moving averages crosses on the 13SMA (blue) downwards, it depicts a bearish sentiment.
  2. If the Flat Indicator forms red bars within its indicator window, it is a signal that price pressures favors the downside i.e. a sell entry.

Stop Loss for Sell Entry: Enter stop loss ≥10-35 pips above entry price. Ensure you put into consideration your personal money management strategy.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit on position(s) if the following chart/indicator patterns are in display:

  1. If the green 5SMA line of the Alligator indicator crosses the red 8SMA line upwards, it is a signal that the current trend is fading out and a reversal is imminent.
  2. If black bars forms within the Flat Indicator window, it signals a quiet market session i.e. low volume, making way for break in any direction. At this point, an exit or take profit is fit.

flat-alligator-forex-trading-system

Fig. 1.1

Free Download

Download the Flat Alligator Forex Trading Strategy

About The Trading Indicators

Developed by Bill Williams, the Alligator MT4 Indicator is a trend following indicator, as such it is termed a Bill Williams indicator within the MT4 indicator entries.

The indicator deploys three components i.e. 5SMA (green), 8SMA (red) and 13SMA (blue) line in identifying trend changes.

The Flat Indicator on the other hand deploys the FastMA and SlowMA, along with a trigger signal. The DarkBlue/SkyBlue colors are used to define a bullish trend, while the Red color depicts a bear market. The black color represents sessions of low trading volume.

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